BERWYN, Pa., Nov. 30 /PRNewswire/ -- In an environment where hospitals seem to always be competing, VHA Inc. is bringing its member hospitals together to reduce health care costs. As the country's leading health care supply chain management organization, VHA helps its members improve clinical and supply chain performance and works with members in specific regions to leverage their combined purchasing power to gain additional savings.
These savings have a big impact on a hospital's bottom line, since pharmacy costs are one of the top three expense categories as far as supply utilization. For example, VHA members in eastern Pennsylvania and New Jersey agreed to pursue a common distribution strategy for pharmacy products, and they project to save $14 million in pharmacy costs over an eight-year period.
"VHA is helping hospitals, nationwide, reduce pharmacy costs without sacrificing quality," said Kathy Blandford, senior vice president and executive officer of the VHA East Coast region. "Hospitals in this region are collaborating on their greatest needs and securing more tailored contracts, which may lead to a new trend in hospital group purchasing and a greater emphasis on regional contracting for products."
VHA serves more than 2,200 health care organizations nationwide, including 1,400 hospitals. The East Coast office, located in Berwyn, Pa., is one of 18 regional offices that VHA uses as hubs to create networks of members to focus on clinical and operational improvement opportunities, such as supply standardization.
Regional efforts began in 1999, when VHA created new distribution agreements for its East Coast members that would help add additional savings on distribution services. VHA members access these savings by using supply contracts created by Novation, VHA's supply chain company. The first regional three-year pharmacy agreement saved more than $4 million. The current distribution agreement shows more than $2 million in savings per year, and the overall savings for the two pharmacy agreements should exceed more than $14 million.
VHA members in the East Coast region, which includes more than 20 hospitals in eastern Pennsylvania and New Jersey, purchased $170 million in pharmacy products last year. By leveraging this purchasing power, they also were able to obtain savings on pharmacy robotics, technology such as bar-code reading devices, asset management programs and an indigent care reimbursement pilot program.
In addition to working with VHA to reduce pharmacy costs, VHA East Coast members are working on two other high cost areas -- cardiology and capital equipment. Last year, VHA began collecting data from members in Pennsylvania and New Jersey regarding cardiology purchases in an effort to identify opportunities for standardization. VHA provided members with education and tools to help them understand the competitiveness of their current pricing and, in the future, will work to provide regionally standardized contracts for cardiology equipment.
Working with member hospitals, VHA identified patient beds as another potential target for standardization. By working with other VHA regions up and down the East Coast, the VHA members in Pennsylvania and New Jersey reached the highest-level discount available on patient beds. VHA plans to negotiate similar capital equipment agreements in the future for its members.
To learn more about how VHA is helping hospitals save money through regionally standardized contracts, visit http://www.vha.com/ .
About VHA -- VHA Inc. is a national cooperative of leading not-for-profit health care organizations that work together to improve the health of the communities they serve. VHA leverages the collective strength of the membership to improve clinical, operational and financial performance. Through the VHA cooperative, members benefit from resources that assess critical needs and identify best practices to create customized solutions that lower costs and improve clinical quality. As a cooperative, VHA distributes income annually to members based on their participation. Based in Irving, Texas, with 18 offices across the U.S., VHA was named one of the "100 Best Companies to Work For" by Fortune in January 2004, for the fifth year in a row.
Contact: Lynn Gentry Courtney Ware 972/830-0798 804/675-8168 lgentry@vha.comcware@crtpr.com
VHA Inc.CONTACT: Lynn Gentry of VHA Inc., +1-972-830-0798, or lgentry@vha.com ;or Courtney Ware, +1-804-675-8168, or cware@crtpr.com , for VHA Inc.
Web site: http://www.vha.com/