VHA Helps Mountain States Hospitals Save $2.6 Million on Purchases of Medical-Surgical Supplies

Hospitals Expanding Efforts to Waste Management, Recycling and More

Denver, Colo.; July 11, 2005 – VHA Inc. has worked with member hospitals in Idaho, Montana, Wyoming, Washington, Nebraska, New Mexico and Colorado to help them save more than $2.6 million in non-salary costs through regional product standardization initiatives. As the country’s leading health care supply chain management organization, VHA helps its member hospitals improve their supply chain performance by leveraging their combined purchasing power to gain additional savings.

With supply costs increasing, standardizing supply purchases can decrease costs overall and have a big effect on a hospital’s bottom line.

“VHA provides members with information, products and services to maximize operational efficiency,” said Dick Taylor, vice president, VHA Mountain States. “VHA Mountain States then coordinates those resources locally and develops customized standardization programs to meet our members’ needs.”

VHA serves more than 2,400 health care organizations nationwide, including 1,400 hospitals. The VHA Mountain States office, located in Denver, 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 standardization efforts through the VHA Mountain States office began in 2000. Because of the size of its territory, VHA Mountain States’ regional standardization efforts are divided into three networks: Idaho, Montana and Front Range. The Idaho and Montana networks, which comprise 44 member hospitals, wanted to reduce costs and inventory, increase service and enhance the possibilities of product standardization. Each network issued its own contract enhancement process and created contracts for medical and surgical supplies.

“Standardizing supplies to one distributor has proven immensely valuable to us. We have realized a significant savings and improved service levels,” said Bud Chesnut, purchasing director, Kootenai Medical Center, Coeur d’Alene, Idaho. “We value our participation in the network.”

Participation in the regional standardization program is most valuable to small and mid-sized hospitals, giving them access to pricing and service levels usually only accessible to large facilities. Through other agreements, the group has been able to realize an additional $137,000 savings, mostly on exam gloves, needles, syringes, drapes and gowns.

“The cohesiveness yielded by participation in the network has fostered increased collaboration amongst hospitals,” said Dave Brabham, director of materials management, Kalispell Regional Medical Center, Kalispell, Mont. “We regularly communicate with each other to understand where the greatest needs are and identify best opportunities for the group.”

In 2003, the Front Range Network, which comprises 26 member hospitals in Colorado, Wyoming, New Mexico and Nebraska, began standardization efforts and contracted with one distributor for all of its medical and surgical supplies. Impressed with the potential cost savings, the network pursued additional standardization opportunities. The group standardized on the custom procedure trays used in all surgical procedures, and saved $720,734. The group later standardized solid waste management and recycling services and realized a five percent cost reduction, plus better service terms. The network recently standardized to one infectious waste supplier for a potential five percent savings.

“Sharing information across the networks and through the region has helped to create strong standardization projects,” said Tom Smith, director of materials management at Memorial Hospital in Colorado Springs, Colo. “We all face similar constraints and issues and learning and building from each other has been a true advantage. We have seen great financial and professional results.”

To learn more about how VHA is helping hospitals save money through regionally standardized contracts, visit www.vha.com.

VHA Helps Mountain States Hospitals Save $2.6 Million on Purchases of Medical-Surgical Supplies