VHA Delivers $1.13 Billion In Value For Members In 2003

IRVING, Texas, April 29 /PRNewswire/ -- Health care organizations that are members of VHA Inc. received $1.13 billion in total cash and other value through their participation in the alliance in 2003. This is a 14.3 percent increase over the 2002 VHA value calculation, based on a revised methodology for measuring member value.

Total cash benefits earned by VHA members for 2003 activities reached nearly $315 million; total cash benefits is represented by cooperative cash, patron's equity redemptions and manufacturers' incentive payments. For 2003, VHA will distribute 100 percent of its operating income ($121 million) to member organizations through the cooperative. Members earn cooperative distributions based on their participation levels in the cooperative. Checks will be sent out to approximately 475 patron members within the next few weeks. The majority of the remaining cash benefits for 2003 consisted of incentives paid by manufacturers to members for their purchases through Novation, VHA's supply services company. In addition to the cooperative distribution checks, members will also receive a detailed report outlining their specific participation levels and the value they received through VHA during 2003. The adjusted total cash benefit for members for 2002 was more than $259.2 million.

VHA saved its members $813.5 million on purchases of medical supplies and services in 2003. Last year VHA members purchased more than $17.7 billion worth of supplies and services through Novation and VHA contracts, a 5.1 percent increase over 2002 member purchases through the alliance. VHA offers members more than 60 contracts for services and Novation offers members more than 600 contracts for medical supplies. Based on the revised value calculation formula, VHA saved its members $727.7 million in 2002.

In 2003 VHA revised the methodology used to calculate member value to reflect variations in average member savings by region and size of organizations, based on data received from members.

"Our mission is to help VHA health care organizations improve their economic strength by enabling them to improve their operational, clinical and supply chain performance," said Curt Nonomaque, VHA's president and chief executive officer. "We have a solid track record of doing exactly that, and our Value Report documents that activity.

"This is a critical time in the health care environment," said Nonomaque. "By working with VHA, they expand their existing resources, extend their abilities clinically and share the power of the alliance with health care organizations across the country."

Based on support from members of the VHA and University HealthSystem Consortium alliances, Novation continues to be the leading supply services organization in health care. VHA and UHC organizations used Novation contracts to purchase more than $20.7 billion in supplies in 2003. This includes $16.2 billion in purchases from VHA members, a 3.9 percent increase over 2002, but the 10 largest participating VHA members increased their purchases by an average of 9.6 percent.

In 2003 VHA members continued to support Marketplace@Novation, the industry's leading e-commerce solution. Last year VHA established a special e-commerce pool and began distributing additional annual cooperative payments to members based on their transactions through Marketplace@Novation. Virtually all VHA member hospitals are conducting business now through Marketplace@Novation and/or accessing data to help them reduce their supply costs. For their participation in Marketplace@Novation in 2003, members earned $18 million in cash and equity through the e-commerce pool.

About VHA

VHA is a nationwide network of 2,200 leading community-owned health care organizations and their affiliated physicians. Based in Irving, Texas, with 18 local offices across the U.S., VHA comprises nearly 26 percent of the nation's community hospitals, including many of the nation's largest and most respected institutions. VHA helps members identify, integrate and implement best practices that will improve clinical and operational performance. As a cooperative, VHA distributes income annually to members based on their participation. In January 2004, for the fifth year in a row, VHA was named one of the "100 Best Companies to Work For" by Fortune. For more on VHA, go to http://www.vha.com/ .

Contact: Lynn Gentry 972/830-0798 lgentry@vha.com

Photo: Newscom: http://www.newscom.com/cgi-bin/prnh/20011017/VHALOGOAP Archive: http://photoarchive.ap.org/PRN Photo Desk, photodesk@prnewswire.comVHA Inc.

CONTACT: Lynn Gentry of VHA Inc., +1-972-830-0798, or lgentry@vha.com

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