NEWS RELEASE

Novation Group Buys Program Saves Members More Than $160 Million

IRVING, TX; September 17, 2008 — Capital purchases can represent up to 25 percent of a hospital’s budget. To provide members with the equipment they need, when they need it and at the best price possible, Novation, the leading health care contracting services company of VHA Inc., University HealthSystem Consortium (UHC) and Provista, LLC, launched its national Group Buys program in 2005. To date, the program has saved participating member organizations more than $160 million.

“Novation’s group buy program takes group purchasing to the next level. We combine member purchasing volume to maximize savings opportunities,” said Kelly Rodriguez, capital asset manager, at Novation. “The power of aggregate volume speaks for itself. More than 2,500 members participate in the program, proving that health care organizations find value in group buy purchasing.”

Scott & White Memorial Hospital in Temple, Texas was in the midst of a continuing expansion that challenged administrators to balance that growth mode with the organization’s increasing need for capital equipment. The hospital turned to Novation’s group buys program to address its capital needs.

“Our organization has participated in nine group buys since 2005 and saved approximately $1 million in capital spend,” said Mark Grove, associate executive director of supply chain services at Scott & White. “In addition, we’ve also benefited from group buy value-adds, such as warranties that extend beyond traditional periods.”

Novation’s group buys program also helps members offset potential costs resulting from new government regulations. In October, the Centers for Medicare & Medicaid Services (CMS) will no longer reimburse hospitals for pressure ulcers, patient falls and certain hospital acquired infections (HAIs). To help members address pressure ulcers and falls, Novation added non-powered dynamic air mattresses and beds to its group buys offering. To help hospitals address HAIs, Novation added personal protection equipment. In addition, Novation recently added dual-source CT scanners to its group buys to help members offset the high average selling prices of imaging equipment, which can run into the millions, and reduced reimbursement for procedures resulting from changes to the Deficit Reduction Act.

“We are committed to providing members with the equipment they need at a competitive price and will continue to monitor the industry and offer group buys on equipment that enables hospitals to provide their patients with the best care possible,” adds Rodriguez.

Group buys are developed based on in-depth member interviews and analyses of members’ capital budget data, and member market research. Novation offers four group buy periods on more than 30 major categories of equipment, including: MRIs, ultrasound and mammography equipment, sterilizers, bone densitometry and furniture.

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About Novation
Founded in 1998, Novation is the leading health care supply contracting company for more than 25,000 members of VHA Inc. and the University HealthSystem Consortium (UHC), two national health care alliances, and 5,500 members of Provista, LLC, representing 28,000 sites. Novation provides alliance members contract and price management and spend management services. Based in Irving, Texas, Novation develops and manages competitive contracts with more than 600 suppliers. VHA, UHC and Provista members used Novation contracts to purchased nearly $37.8 billion in 2009.

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