SOURCE: Novation

October 24, 2005 12:28 ET

Diverse Businesses Reach Sales Goals Through Novation's Supplier Diversity Program

Hospitals Purchase $130 Million in Goods From Minority, Women and Small Veteran-Owned Businesses Participating in Novation's Supplier Diversity Program

IRVING, TX -- (MARKET WIRE) -- October 24, 2005 -- Novation, the contracting arm of VHA Inc. and the University HealthSystem Consortium (UHC), today announced that companies participating in its supplier diversity program have sold $130 million in goods to hospitals across the country. In its sixth year, the program offers hospitals the chance to save money on purchases of medical and surgical supplies and distribution services from certified minority, women and small veteran-owned businesses.

In the first six months of 2005, VHA and UHC member health care organizations saved money on rehabilitation products and sterilization supplies and other technologies through the program. Small and rural hospitals have told Novation that it is challenging to identify and evaluate qualified diverse suppliers on their own, so they value the Novation program.

"Novation is committed to opening the supply chain to all qualified businesses to help keep standards high, ensure competition and encourage innovation," said Cathy Denning, RN, MSN, senior director of contract and program services at Novation. "Encouraging diverse suppliers to participate in Novation's bidding, contracting and distribution opportunities, helps ensure that hospitals are saving money on the life-saving equipment they need."

Dave Frederick of Cincinnati Sub-Zero, a woman-owned business enterprise, credits Novation for opening the doors to hospitals, enabling the company to reach VHA and UHC hospitals with patient temperature management products. "The Novation contract allowed us to compete with larger manufacturers. Now, we have the opportunity to invest in newer, more innovative products that we hope will help improve patient care."

Novation works with suppliers to negotiate prices that allow hospitals to control supply costs without compromising care. Hospitals purchasing through Novation save an average of three percent to six percent per year on supplies, enabling them to direct more resources to patient care, community outreach and caring for the uninsured.

"Without Novation's Supplier Diversity Program, the odds of our minority-owned businesses successfully competing for a hospital's business were very long," said Larry Richardson of Pharmed, a minority-owned business in Miami, Fla. "Our Novation contract established Pharmed as a supplier with high quality medical products and the ability to meet the needs of academic medical centers, not-for-profit hospitals and other health care organizations. This recognition is also essential for hospitals as they seek to demonstrate their commitment to diversity."

The following companies offer their products through Novation's Supplier Diversity Program:

COMPANY                  LOCATION             PRODUCT
Action Surgical          Virginia Beach, Va.  Instrument Care Products
Beltway Medical Inc.     Miami, Fla.          Fetal Monitoring Belts
Cincinnati Sub-Zero      Cincinnati, Ohio     Patient Temperature
Creative Biomedics       San Clemente, Calif. Peak Flow Meters &
Cymbion LLC              Louisville, Ky.      Impregnated & Dry Surgical
                                              Scrub Brushes
DECA Pharmaceuticals     Bowling Green, Ky.   Ophthalmic Products
Pharmed Group            Miami, Fla.          Rehabilitation Products
Sonotech Inc.            Bellingham, Wash.    Ultrasound Gel & Related
Stratus Pharmaceuticals  Miami, Fla.          Hydroquinone Gels & Cream,
                                              Topical Steroid Cream, Wound
                                              Debriding Agents
About Novation

Based in Irving, Texas, Novation was established in January 1998 through a combination of the supply programs of VHA and UHC, two national health care alliances. Novation serves the purchasing needs of more than 2,500 members and affiliates of VHA and UHC. These organizations used Novation contracts to purchase more than $23 billion in supplies in 2004.

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