EMHS

EMHS Joins Healthcare Systems to Form Purchasing Coalition

4/18/2011

(Brewer, ME) - April 18, 2011 – Twenty-eight healthcare systems representing more than 100 hospitals in six New England states have come together to form a new company, the Northeast Purchasing Coalition LLC. This supply network represents close to 17,000 hospital beds, 5,000 physicians and more than $2 billion in combined annual non-salary expenses. Dan Coffey, EMHS executive vice president and chief financial officer is chairman of this new venture.

These organizations will work together to lower costs through aggregating purchasing volume on contracts, decreasing product utilization and incorporating clinical subcommittee recommendations into their decisions.

With declining reimbursements and rising costs, this collaborative approach to non-salary cost reduction will help ensure hospital resources are preserved for direct patient care. The coalition’s members, all members of VHA Inc., the national healthcare network, plan to leverage VHA’s supply chain management expertise and Novation’s contracting power to obtain better pricing on aggregated purchases. The boards of directors of VHA New England and VHA Northeast used their collective strength and enthusiastically endorsed this endeavor as their innovative way to reduce non-salary expenses—providing essential executive-level support.

“Hospitals are pressing hard to find new ways to save money and deliver efficient care without cutting staff, limiting services or sacrificing clinical quality,” said Gerry Roche, area senior vice vice president/executive officer for VHA Northeast and VHA New England. “By aggregating volume through VHA SupplyNetworks™, our members can zero in on standardization opportunities and establish a platform to discuss clinical utilization, both of which hold significant potential for savings and higher quality of care. VHA SupplyNetworks also creates opportunities for operational efficiencies that aren’t available through any other means in the healthcare industry today.”

Representing a strong commitment to collaboration among these hospitals, the NPC will be operated by a committee of supply executives recruited from the NPC’s members who will develop the strategies, guidelines and processes to ensure the group can reach their savings objectives. The members have agreed to abide by the following principles:
• A defined purchasing decision making process
• Volume-aggregated contracting strategies
• Member commitment
• Sustained contract compliance
• Members will retain the ability to make independent decisions about product purchases but have agreed to aggressively pursue product standardization whenever possible in order to achieve dramatic cost savings.
• On average, hospital members of VHA SupplyNetworks save between 8% and 12% annually through network contracts that enable members to:
• Gain better control over the entire supply chain
• Achieve savings above and beyond what they could accomplish on their own
• Share and learn best practices from other participants
• In their most mature form, VHA SupplyNetworks help members pursue higher value activities such as centralized ordering and centralized logistics. Supply networks also provide innovative platforms for utilization discussions because their collective intelligence enables the hospitals to reach a clinically supportable consensus that should lead to better clinical performance.
• VHA currently supports 23 VHA SupplyNetworks nationwide. Combined, these supply networks saved participants $100 million in 2010.

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About VHA - VHA Inc., based in Irving, Texas, is a national network of not-for-profit health care organizations that work together to drive maximum savings in the supply chain arena, set new levels of clinical performance and identify and implement best practices to improve operational efficiency and clinical outcomes. In 2009, VHA delivered record savings and value of $1.47 billion to members. Formed in 1977, VHA serves more than 1,400 hospitals and more than 28,000+ non-acute care providers nationwide, coordinating delivery of its programs and services through its 16 regional offices. VHA has been listed as one of the best places to work in health care by Modern Healthcare since 2008 and one of the best places to work in IT by Computer World since 2007.

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