NEWS RELEASE

Novation Enhances Its Orthopedic Portfolio

New Hip, Knee & Shoulder Multi-Source Agreements Could Save Hospitals Nearly $188 Million

IRVING, TX; November 1, 2007 — Novation, the health care industry’s leading contracting services company of VHA Inc., and the University HealthSystem Consortium (UHC), two national health care alliances, is enhancing its orthopedic offerings to continue to maximize savings opportunities and value for alliance members. The enhancements begin with 20 new multi-source agreements for a broad range of primary, revision, and endoprosthesis for hips, knees and shoulders products. The new portfolio, which launches November 1, could provide as much as $188 million in total savings for members and makes Novation’s hip and knee portfolio the largest in the industry.

“The orthopedic industry is expected to grow greatly in the next few years and attached with this growth is a tremendous financial burden for hospitals,” said Scott Crandall, senior director at Novation. “In general terms, hospitals have been reducing the number of medical device vendors they deal with, but through Novation’s new portfolio enhancements, member hospitals will be able to continue to save millions.”

The new hip, knee and shoulder agreements are effective through Oct. 31, 2010, with two one-year extension options and represents more than 98 percent of members’ hip and knee implant product purchases. Products include:

• primary hip implants
• primary knee implants
• revision hip and knee implants
• endoprosthesis/shoulder implants
• capitated hip pricing
• capitated knee pricing

The new hip and knee agreement will continue to facilitate new and rapid technology adoption, like hip resurfacing and polyethal liners. In addition, the new agreements include e-LOPs with no signatures required, reduced or free freight and price increases are guaranteed to be lower than industry increases.

“Novation’s orthopedic program is unsurpassed and improvements in our hip and knee, trauma and spine agreements continue to distinguish our program as leading-edge and at the forefront,” adds Crandall. “We have seen great success with our orthopedic assessments program and we will continue to explore other innovative services for members as well.”

To date, Novation has identified $188 million in savings through its hip and knee program.

The new agreements include the following companies and products:

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About Novation
Founded in 1998, Irving, Texas-based, Novation is the leading health care contracting services company, delivering unmatched savings and value to nearly 2,500 members of VHA Inc. and the University HealthSystem Consortium (UHC), two national health care alliances and nearly 12,000 members of Provista, LLC. Through its competitive contracting process, Novation develops and manages contracts with more than 500 suppliers. Novation offers the most extensive range of advanced contracting services, including: contract development, contract and supplier management, custom contracting, enhanced savings programs, online contract management and analytical tools, order management and online supplier connectivity. VHA, UHC and Provista members used Novation contracts to purchase more than $33.1 billion in 2007.

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