April 06, 2011 12:21 ET

VHA Inc. Members Unite to Form the Central Atlantic Health Network LLC to Reduce Operational and Supply Costs in Increasingly Demanding Environment

IRVING, TX--(Marketwire - April 6, 2011) - Driven by ongoing cost pressures from falling reimbursements, hospitals are pursuing new avenues to achieve cost reductions. Now, five healthcare systems in the Central Atlantic region, all members of VHA Inc., the national health care network, have united to form the Central Atlantic Health Network LLC. Representing a combined annual supply and services spend of more than $800 million, this new VHA SupplyNetwork™ anticipates committing to 30 agreements yielding a savings of about 10 percent during its first operational year.

As a major element of an overall cost-reduction strategy, this collaborative venture promotes supply chain savings while enabling member hospitals to deliver high-quality patient care. CAHN's members also benefit from networking with their peers to gain knowledge of and integrate best practices into their clinical procedures while improving their operational efficiencies. 

CAHN has the full endorsement of participating member CEOs and will be led by an executive committee, which develops the strategies, guidelines and processes that will ensure the group can reach its savings objectives. Members of the Central Atlantic Health Network LLC are:

  • CarolinaEast Health System, New Bern, NC
  • Centra Health Inc., Lynchburg, VA
  • Covenant Health, Knoxville, TN
  • Mary Washington Healthcare, Fredericksburg, VA
  • University Health Systems of Eastern Carolina, Greenville, NC

"The new health care reform law has heightened the immediate need to create this organization because it has placed an additional emphasis on cost reduction. We are committed to incrementally lowering our members' supply costs and reducing operating expenses and we are excited about this new VHA SupplyNetwork that will help members achieve these priorities," said David B. McDonald, Area Senior Vice President and Executive Officer, VHA Central Atlantic. "Through aggregated purchases, committed volumes and standardization and commitment to each other, our members can achieve greater cost savings and continue to provide the high quality care for their patients they have long been known for."

"We're excited to come together with other world-class hospitals in the region to form the Central Atlantic Health Network. Each of our organizations has been recognized repeatedly for its clinical and operational efficiency and professional excellence, and we look forward to collaborating with each other to identify additional opportunities to drive efficiencies and achieve great savings," said Stephen Lawler, President, Pitt County Memorial Hospital. "Our participation in this new VHA SupplyNetwork further demonstrates all of the organizations' commitment to operational excellence and to providing quality patient care, and we look forward to an extremely successful collaboration."

Through their participation in a VHA SupplyNetwork, some benefits to the members will include:

  • Accelerate supply savings through commitment and aggregation
  • Share best clinical practices related to product standardization and utilization
  • Establish peer-to-peer connections to rapidly apply best practices and drive innovation resulting in possible collaborative opportunities

VHA currently supports 24 supply networks and believes supply networks provide an innovative platform for meaningful discussions that enable member hospitals to achieve a clinically supportable consensus about which medical products to buy in order to provide better clinical care to patients. Importantly, each VHA Supply Network contains features that uniquely reflect its respective market. In 2010, members participating in a VHA Supply Network saved $100 million.

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 2009, VHA delivered record savings and value of $1.47 billion to members. Formed in 1977, VHA serves more than 1,350 hospitals and more than 30,000 non-acute care providers nationwide, coordinating delivery of its programs and services through 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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