June 28, 2011 12:05 ET

Tucson Medical Center Saves More Than $4 Million in Only 90 Days by Implementing Strategic Cost Saving Plan Leveraging VHA Inc. Price Benchmarking System

VHA PriceLYNX™ Helps Hospital Gain Market Transparency and Perspective

IRVING, TX--(Marketwire - Jun 28, 2011) - Striving to contain costs and improve efficiency, Tucson Medical Center, Tucson, Ariz., saved more than $4 million on supply costs in 90 days by employing VHA PriceLYNX, the industry-leading price bench marketing system from VHA Inc., the national health care network. Applauded for its ability to analyze industry pricing, stay ahead of market trends and measure overall hospital spending performance, VHA PriceLYNX allowed Tucson Medical Center to identify cost savings on millions of dollars of transactions and more clearly understand their pricing compared to the overall market.

"We spend roughly $90 million to $100 million on supplies annually, so, to tell you the truth, I was extremely skeptical of the data and how actionable it would be," said Les Feka, director of materials management at Tucson Medical Center. "But once we made the decision to subscribe, we were able to identify around $25 million in high-dollar opportunities right away and we saved between 12 percent and 18 percent of that amount within 90 days. We implemented those savings as a direct result of VHA PriceLYNX."

Tucson Medical Center invested in this analytical, data-driven approach to eliminate the guesswork from their cost containment efforts. The VHA PriceLYNX data offered Tucson the necessary insight and framework to effectively manage costs, allocate staff resources and set priorities. Previously, Tucson's purchasing department would chase after top spend categories, but quickly realized that this random approach often failed to yield the best results.

"We now have the ability to index our price. If we spend $20,000 for a device but I'm buying it at the indexed tenth percentile, I know I'm already getting a competitive price," says Feka. "But if I'm purchasing an item on the 90th percentile, I have a lot more opportunity to drive savings out on that product than I do on the $20,000 item in the tenth percentile. The data is really helpful both on specialty items and commodities because now you can look across your supply spend, allocate resources, measure results and validate whether you're meeting expectations."

Retrieving information from one of the industry's most robust and timely databases, VHA PriceLYNX provides unparalleled insight, allowing hospitals to maintain visibility into industry pricing. The VHA PriceLYNX subscription includes the services of an advisory consultant who proactively works with purchasing professionals to understand the data, identify opportunities and create an implementation plan.

"Increasingly, hospitals have come to appreciate the substantial cost-saving benefits they achieve by understanding the market and having price transparency," said Justin Hibbs, senior director of marketing at VHA. "Once hospitals they see those benefits, they become integral to their strategy and apply them on an ongoing basis."

VHA PriceLYNX is just one component of VHA LYNX™, an enhanced version of VHA's robust suite of analytical solutions that help hospitals cut costs and improve supply chain management. This powerful array of products and services also includes: VHA DataLYNX™, VHA Physician PreferenceLYNX™, a contract catalog, plus supplemental services such as spend analysis, services analysis and pharmacy analysis that further improve members' cost saving opportunities.

"It's hard to argue with the facts," says Feka. "The transparency the entire VHA LYNX suite of services allows is critically important as it enables supply chain management to control costs in an uncertain environment."

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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