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Novation Selected to Help Deliver Savings to the Public Health System in England -- The National Health Service

Posted on: Tuesday, 5 September 2006, 15:00 CDT

Novation, the health care contracting services company for VHA Inc. and the University HealthSystem Consortium, has won a highly competitive contract to provide procurement services for the National Health Service in England with DHL. DHL won the contract to manage a supply chain organization called NHS Supply Chain, which will target savings enabling the National Health Service in England to continue to manage its costs base and focus on patient care.

Under the contract, Novation and DHL are projected to help the government save more than $1.8 billion on consumable items over the next 10 years.

The contract marks the first time another country has tapped into the U.S. health care group purchasing system to target savings for its health care sector. Like the U.S., England faces high health care costs and the government is searching for ways to better manage costs without compromising care.

"Novation will support DHL in taking the National Health Service purchasing in England to a level where it can help providers deliver further savings and focus on patient care," said Jody Hatcher, senior vice president at Novation.

One way American hospitals have controlled costs is by working with health care group purchasing organizations (GPOs) to pool the buying power of many hospitals to negotiate a more competitive range and price for high quality supplies. In 2005, for example, hospitals saved more than $1 billion on supplies they bought through Novation contracts. Novation plans to leverage innovative procurement strategies and tactics developed in the United States to improve efficiencies, maintain quality and increase savings in England.

Medical supply companies from England will benefit from Novation's long history of offering the most transparent bidding process as well as superior contracting and marketing services. Novation will follow guidelines set forth by the Official Journal of the European Union to ensure an open and competitive contracting process. Novation's Hatcher says that the company always reviews products based on quality and safety first to ensure they meet the needs of hospitals and patients.

"Quality comes first," said Hatcher. "We're looking forward to bringing our process of clinician review to the NHS to ensure medical input into the supplies selected for contracts. Novation's U.S. clinician councils help review all kinds of products, including new and innovative technologies that advance patient care. The ultimate goal is to help hospitals afford these essential, but expensive supplies."

Using the Novation-negotiated supply contracts will be completely voluntary for hospitals in England, as it is for the 2,500 not-for-profit hospitals that access Novation's contracts in the United States.

A major difference between the two systems is that, in addition to negotiating the discounted rates for particular supplies, DHL will warehouse much of the inventory from which NHS hospitals will buy. In the U.S., hospitals use the Novation-negotiated rate to purchase directly from suppliers.

The Novation operation in England will be led by Sherry Woodcock, a long-time executive in the company's U.S. operation and leading industry expert on health care contracting. The team also includes senior team members who will focus on contracting for clinical and non-clinical products. Six logistics centers currently in use will remain in place along with DHL's existing NHS logistics site. Novation and DHL anticipate that a new warehouse will be required, creating an additional 1,000 positions over the 10-year contract period.

About Novation

Based in Irving, Texas, 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. Through its public competitive bid process, Novation develops and manages contracts with more than 500 suppliers, both large and small. By combining scale and agility with clinical knowledge and product expertise, Novation offers the most extensive range of innovative 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 and UHC members used Novation's contracts to purchase more than $25 billion in supplies in 2005.

 Contact Nataaka Singleton Contact via http://www.marketwire.com/mw/emailprcntct?id=1998DF2DBD53E85E 972-581-5529  

SOURCE: Novation

Source: MARKET WIRE

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