SOURCE: Novation

May 17, 2005 08:00 ET

New Marketplace@Novation Tools Help VHA and UHC Hospitals Identify Additional Savings Opportunities

IRVING, TX -- (MARKET WIRE) -- May 17, 2005 -- Novation, the supply company of VHA Inc. and the University HealthSystem Consortium (UHC), has officially introduced new tools on its industry-leading online health care supply exchange, Marketplace@Novation. The new features provide member health care organizations additional means to lower total supply costs using real-time, actionable information and the ability to make more informed purchasing decisions. Supplies and purchased services make up nearly a third of an average hospital's expenses.

The new tools are the Contract Value Assessor and the Contract Potential Savings Report for non-pharmaceutical products.

"These new tools, developed based on member input, will give VHA and UHC health care organizations more control over their supply costs than ever before," said Dan Blucher, senior director, e-commerce business development, at Novation. "Marketplace@Novation enhances members' ability to access and utilize information and will continue to do so."

The Contract Value Assessor allows a hospital to cross reference current line-item purchases with the pricing available through new Novation contracts and conduct 'what if' scenarios. This financial tool can assist VHA and UHC members in determining their potential savings if they opt to standardize purchases, move to a higher volume purchasing tier or convert from a non-contracted item to a contracted item. The tool launched April 1 for the new Novation wound closure and endomechanical contracts, and additional categories will be added over the coming months.

"The new Web-based tool is valuable in that it provides a succinct snapshot of potential savings opportunities through Novation-contracted suppliers, enabling us to make more informed purchasing decisions," said John Teppo, purchasing coordinator, Contract/Negotiation, for Meriter Hospital in Madison, Wis. "Previously, a more time-consuming manual process was necessary. With the new tool, we can quickly upload our purchasing data and, in a matter of minutes, get an idea of what contract savings suppliers could possibly offer us."

The Contract Potential Savings Report for non-pharmaceutical products will enable hospitals to identify savings opportunities by converting off-contract purchases to on-contract purchases for functionally equivalent products.

The Contract Potential Savings Report (non-Rx) enables hospitals to:

--  Review on-contract and off-contract purchases
--  Monitor and track contract usage patterns
--  Identify contract conversion opportunities
--  Convert to less expensive functionally equivalent products
--  Increase contract utilization.
Based on the success of the Pharmacy Contract Potential Savings Report launched January 2004, the new tool will offer the same comparison and conversion capabilities for Novation-contracted medical surgical products. Since the introduction of the pharmacy tool, VHA and UHC members have documented more than $10 million in savings.

"The ability to easily identify off-contract purchases is valuable because oftentimes the buyers are so busy buying that they don't have a lot of time for research," said Elaine Gray, applications analyst, Phoebe Putney Health System in Albany, Ga. "If buyers look at this report they'll know they can save a lot of money. Before this tool, buyers didn't see that information."

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. For more information, visit

Interview and Demo Opportunity at VHA Leadership Conference, May 15 - 18, 2005, Georgia World Congress Center, Atlanta, Ga.:

--  Dan Blucher, senior director, e-commerce business development, at
    Novation. (Call 972-581-5047 to schedule an interview.)

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