VHA Announces 100th Hospital to Use Global Spend Analysis

61 Hospitals Used Tool to Identify $216 Million in Potential Savings; 40 More to Complete Process

Irving, Texas; Nov. 28, 2006 — VHA Inc., the national health care alliance, today reports more than 100 of its members are using the newest Supply Chain Analytics offering, the global spend analysis tool, to gain better insight into their total expenditures. The tool leverages advanced analytical capabilities to provide members with unprecedented visibility into their supply purchases and new insight to identify specific cost savings opportunities.

“We are pleased that so many of our members have decided to leverage this sophisticated Web-based tool to analyze their total expenditures and identify savings opportunities. To date, hospitals have identified $216 million in potential savings,” said Dan DeLay, senior vice president of Supply Chain Analytics at VHA. “Our global spend analysis provides a foundation for effective supply chain management that is rivaled only by offerings outside of health care. Initial spending assessments are available at no charge for VHA members on an annual basis.”

How the Tool Works

VHA worked in partnership with some of its largest members to develop its global spend analysis. The tool has helped them find substantial initial savings through: 1) contract utilization; 2) conversion and activation; 3) price leveling across the organization and 4) vendor standardization. These savings averaged between one percent and two percent of their total spend, and as much as 10 percent in some specific product categories with an average of $1.9 million per organization. 

VHA works with the member to evaluate the spend data, as well as explores other savings opportunities through physician preference analysis, revenue management, and other cost savings activities.

“Our experience has been very positive with VHA’s Global Spend Analysis,” said Greg Piper, director of materials management at Memorial Hospital of South Bend, Ind. “By utilizing this tool, we’ve identified potential savings, verified tier pricing, updated our item master and leveraged our contract management strategy. Essentially, it has mobilized our organization towards tangible supply chain improvement.”

About VHA’s Supply Chain Analytics

VHA formed its Supply Chain Analytics Division in September 2005 to help its members achieve and sustain new levels of cost and margin improvement. The division provides members with unparalleled access to the supply chain information they need to take decisive actions that will enable them to reduce supply costs. The division also fosters the creation of new and innovative analytics solutions, such as the global spend analysis tool.

The new division brought together existing supply chain information and solutions from across VHA and Novation, VHA’s contracting services company, including:

VHA Announces 100th Hospital to Use Global Spend Analysis