SOURCE: Novation

December 13, 2005 17:04 ET

Member Support for Novation Surgical Portfolio Continues to Grow

IRVING, TX -- (MARKET WIRE) -- December 13, 2005 -- After launching its new surgical portfolio in April, Novation indicates that member acceptance of new vendor products continues to grow.

Novation, the contracting arm of VHA Inc. and University HealthSystem Consortium (UHC), two national health care alliances, signed agreements with seven medical suppliers, dividing business that had previously gone to just one vendor. The contracts cover a variety of surgical products and represent $900 million in potential annual sales (see attached list). The agreements, which run through March 31, 2008, provide up to a 25 percent savings for VHA and UHC members over the previous offering.

"Members say the financial value, the fact that they have multiple vendors to choose from, and the clinical quality of the products, make the Novation surgical portfolio appealing," says Sandy Wise, senior director of surgical services at Novation.

Willis-Knighton Medical Center, an 800-bed VHA member in Shreveport, La., is projecting it will save more than $800,000 annually by converting to contracts in the Novation surgical portfolio.

"There were questions and concerns among the surgeons because we had had used our previous vendor for about 10 years," said Jerry Lee, assistant administrator. "Once surgeons become used to certain products and the way they work, oftentimes, nothing else is acceptable in their mind. However, we moved slowly and worked with the surgeons to get them see that clinically, one product was not any better than the other. We had surgeons say that if you removed the brand name from the packaging, they wouldn't know one product from another. But the name on the package is what they're accustomed to and comfortable with."

According to Greg Weeks, director of materials management at Willis-Knighton, as the evaluation process spread to other products, the surgeons' doubts decreased. "Ninety-five percent of the surgeons said, 'I can use this,' knowing that the savings would make our health system better and stronger."

U.S. Surgical, a business unit of Tyco Healthcare, reports that more than 700 hospitals have signed on to access wound closure, open stapling and endomechanical products through its new agreement with Novation.

Other suppliers are reporting success in marketing their products, as well. For example, the University of Chicago has begun the process of converting to Applied Medical trocars, after recognizing the potential to save money and maintain clinical quality.

The Novation surgical portfolio includes the following companies and products:

Company                         Product(s)
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3M                              Skin Staplers
St. Paul, Minn.
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Aesculap                        Sutures
Bethlehem, Pa.
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Applied Medical                 Endoscopic Instruments, Ligation and
Rancho Santa Margarita, Calif.  Trocars
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ConMed Corp.                    Endoscopic Instruments
Utica,  N.Y.
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Ethicon                         Mechanical Stapling and Cutting,
Somerville, N.J.                Topical Skin Adhesive and Trocars
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GeniCon                         Trocars
Winter Park, Fla.
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United States Surgical, a       Endoscopic Instruments, Ligation,
business unit of Tyco           Mechanical Stapling and Cutting, Skin
Healthcare--Syneture™ and       Staplers, Sutures, Topical Skin
Autosuture™ divisions           Adhesive, Trocars, Ultrasonic Cutting
Norwalk, Conn.                  and Coagulation

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