SOURCE: VHA Inc.

October 26, 2011 13:05 ET

Mid-America Service Solutions LLC Creates Fully Automated Purchasing Order System to Drive Efficiencies, Identify New Supply Chain Savings Opportunities

First VHA SupplyNetwork™ to Implement Common Standards and Platform to Achieve "Perfect Order"

IRVING, TX--(Marketwire - Oct 26, 2011) - To remain financially viable and continue to serve their patient populations, hospitals must slash unnecessary costs from their labor-intensive supply ordering process.

Today, VHA Inc., the national health care network, announced that the six hospital groups in Kansas and Missouri that own Mid-America Service Solutions (MSS) LLC, a Consolidated Services Center (CSC), are seeing the benefits of using VHA's powerful, automated system that saves money by managing transaction flow; provides common standards for purchasing supplies; improves order accuracy; and reduces the need for costly inventory management. MSS is the first VHA SupplyNetwork to benefit from this powerful and highly automated system which processes orders, invoices and other business transactions at an overall untouched accuracy rate of 98.1percent. More than 70 organizations currently participate in MSS, purchasing any of 98,000 products in more than 150 product categories at a set contract price.

This highly efficient technology system fully integrates GPO contract and pricing systems with a hospital's materials management system and ensures the contract price is used when buying products from suppliers. It also validates every price and product in the purchase order, purchase order acknowledgement, advance ship notice, and invoice, ensuring the hospital always knows what it is buying and that the price is correct. Further, the system allows the hospital to receive weekly product and price synchronization files that the hospital uses to keep its item masters current.

Working as a single entity to leverage the contracting and analytics services provided by VHA's supply contracting company, Novation, MSS has done more than aggregating purchasing volumes for custom contracting. It has also refined operating expenses, advanced supply chain efficiency, decreased costs, streamlined operations and helped its hospitals elevate their supply chain performance.

"Previously, we had a lot of pricing and product accuracy errors in our purchasing that cost us extra time and money and frustrated our materials managers and staff," said Bob Essner, director of materials management, Freeman Health System, Joplin, Mo., and chair of the MSS Operations Committee. "The use of the new system has eliminated many of these issues by checking pricing against the master file before we release the order to suppliers."

CSCs represent an important element of VHA's supply network strategy that focuses on connecting members and suppliers at the regional level to help them save money in unique and valuable ways. MSS members spend approximately $1.2 billion dollars on supplies. Since its inception, MSS has achieved an annualized savings of $25 million. To date, more than 197 initiatives have been completed with more than $300 million in member spend under 165 active contracts.

MSS owners and members currently using this system include:

  • CoxHealth, Springfield, MO (owner)
  • Freeman Health System, Joplin, MO (owner)
  • Saint Luke's Health System, Kansas City, MO (owner).
  • Hays Medical Center, Hays, KS (owner)
  • Salina Regional Health Center, Salina, KS (owner)
  • Stormont-Vail HealthCare, Topeka, KS (owner)
  • Citizens Medical Center, Colby, KS
  • Golden Valley Memorial Hospital, Clinton, MO
  • Labette Health, Parsons, KS
  • Lawrence Memorial Hospital, Lawrence, KS
  • Liberty Hospital, Liberty, MO
  • McCune-Brooks Regional Hospital, Carthage, MO

"VHA has worked closely with the MSS members as we developed and implemented this cost-saving, highly automated pricing and order management system. Our goal is to continue increasing the members' percentage of perfect orders, meaning that all transactions are electronic, requiring no physical intervention, and that they are 100 percent accurate from PO creation through invoice payment. This achievement translates into improved efficiency and quality of patient care," said Doug Armitage, vice president, CSC Information Technology at VHA. "We continue to be committed to helping members effectively manage their supply chains, identify best pricing and improve ordering efficiency so they will realize additional savings like never before."

Because the system's protocols align with GS1 standards, MSS members will not need to rework the system to become GS1 compliant. Hospitals using GS1-compliant systems will realize a significantly positive impact on their reimbursements that directly affects an organization's bottom-line stability.

About Mid-America Service Solutions LLC (MSS) – MSS is a not-for-profit LLC owned by six hospital systems in Kansas and Missouri. The LLC was formed in 2008 and began operations on January 1, 2009. The owners of MSS have a combined supply spend of $550 million. Other hospitals throughout Kansas, Missouri, Nebraska and Iowa can also participate in MSS, making their combined supply spend $1.2 billion. MSS is based in Overland Park, Kansas.

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 2010, VHA delivered record savings and value of $1.7 billion to members. Formed in 1977, VHA serves nearly 1,350 not-for-profit hospitals and more than 30,000 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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