November 15, 2011 15:31 ET

VHA Inc. Helps University Health Systems of Eastern Carolina Save $18.6 Million by Standardizing Supplies and Processes

System-Wide Non-Salary Cost Reduction Engagement Strengthens Financial Performance, Promotes Flexible Staff Sharing

IRVING, TX--(Marketwire - Nov 15, 2011) - Focused on maintaining its strong financial performance while preparing for the financial realities of reduced reimbursement, University Health Systems of Eastern Carolina partnered with VHA Inc., the national health care network, to save $18.6 million in four years by implementing a system-wide Non-Salary Cost Reduction Engagement. This disciplined, customized approach reduced costs, standardized processes and improved care, enabling the system to achieve its goal to drive strong financial performance.

As part of its commitment to help member hospitals achieve their financial and operational goals, VHA customizes Non-Salary Cost Reduction engagements for each member hospital, drawing from its vast contracting experience, unique technology tools, proprietary methodologies and unmatched experience in physician alignment. While huge cost savings are a primary outcome in each engagement, members also achieve improved supply utilization, increased productivity, enhanced culture and sustainable process improvement.

Serving more than 1.4 million residents in 29 North Carolina counties, University Health Systems is a major resource for health services and medical education in the area. The system includes 861-bed Pitt County Memorial Hospital, Greenville, NC, three critical access hospitals, five regional hospitals and a network of clinics and physician practices.

"More than ever before, hospitals across the country are now taking a hard look at how to reduce their cost-per-patient day and do it in a way that doesn't compromise quality or patient safety," said Steve Lawler, president, Pitt County Memorial Hospital. "The focus on cost reduction and our partnership with VHA has really been about identifying new and innovative ways to improve the health care experience for the people we serve."

To reduce supply costs, VHA's supply chain experts worked closely with University Health Systems operations and physician teams to identify and extract major cost savings from supplies that could be purchased through Novation, VHA's supply contracting company. With 20 percent of the system's total budget allocated to supplies, sizeable savings in physician preference items, pharmacy, capital assets and purchased services helped the system achieve outstanding results in just four years.

Specific service line savings included:

  • Surgery $3.7 million
  • Orthopedics $3.6 million
  • Medical Products $3.2 million
  • Cardiology $2.8 million
  • IV Systems $915,000

Additional service line and supply savings ranged from $762,000 to $241,000.

David Herman, MD, president and chief operating officer of University Health Systems, said that achieving cost savings allows the system to fulfill its mission to serve eastern North Carolina by investing in community benefits and services.

In addition to reducing costs, the engagement with VHA resulted in helping the system standardize supply and care processes across all system hospitals. "Rather than reduce staff hours at the system's smaller hospitals, we enabled our employees to pick up available shifts at Pitt Country Memorial Hospital. You can offer this opportunity to your clinical staff when you standardize clinical supplies. By standardizing clinical supplies, we don't have to retrain staff every time they move to work from their hospital to another. This is not just cost savings; it is enhancing quality and service," said Janet Mullaney, University Health Systems chief administrative officer.

About VHA -- VHA Inc., based in Irving, TX 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.

Contact Information