VHA SupplyNetworks Continue to Demonstrate the Value of Aggregation

IRVING, Texas, June 18, 2014 /PRNewswire/ -- VHA Inc., the national health care network, announced today that its member-driven supply networks delivered a combined savings of $272 million on network contract spend to members in 2013. VHA pioneered the member-driven supply network concept and currently facilitates 14 networks nationwide—the largest number in the industry.

Through VHA SupplyNetworks, groups of VHA members join together to reduce supply chain costs and increase operational efficiencies beyond what they could achieve individually. Approximately 75 percent of VHA's members participated in a supply network in 2013.

"Today's health care industry has an unprecedented need to achieve greater cost savings while also improving the quality of care delivered to patients. Hospitals have recognized that volume and commitment reduces supply costs and they are increasingly willing to collaborate with other health systems to realize those savings." said Tom Nikiel, VHA vice president of SupplyNetworks.

VHA first launched the supply network concept to members more than 10 years ago and formalized their structure about six years ago. The networks utilize Novation's national contracts as well as select, locally sourced suppliers and VHA continues to be the leader in providing an aggregation platform for health systems.

"When the supply network concept was initially launched, the focus was on commodity items. While the savings were significant, we knew the real opportunity for cost reduction was in specialty items such as medical devices, pharmacy and equipment. In order to achieve aggregation in those areas, doctors and other clinicians had to become engaged in the decision-making process," said Nikiel. "Over the last two years we have been able to get those people involved and the total savings that have been realized have been dramatic—increasing from $67 million in 2009 to $272 million in 2013."

Nikiel added, "The pressure to reduce the cost of care is only going to increase and we know there are still significant opportunities to improve efficiencies and reduce costs beyond traditional contracting for price. We are evaluating the entire supply chain and are very are excited about the new strategies we will soon be offering to our members."

About VHA
VHA Inc. is a national network of not-for-profit health care organizations working together to improve performance and efficiency in clinical, financial and operational management. Since 1977, when VHA established the first hospital membership organization, the company has applied its knowledge in analytics, contracting, consulting and network development to help members and customers achieve their strategic objectives. In 2013, VHA delivered $2.2 billion in savings and additional value to members. Serving approximately 5,000 health system members and affiliates, VHA represents more than a quarter of the nation's hospitals. VHA also serves more than 118,000 non-acute health care customers enterprise-wide. VHA is based in Irving, Texas, and has 12 regional offices across the U.S. VHA, together with UHC, owns Novation, a supply chain company, and aptitude™ , the health care industry's first online direct contracting market. VHA also owns Provista, a supply chain company serving the non-acute market as well as hospitality, education and corporate markets. For more information, visit www.vha.com and follow us on Twitter (@VHAInc).

SOURCE VHA Inc.