Irving, TX—Oct. 27, 2011—To remain financially viable and continue to serve their patient populations, hospitals must slash unnecessary costs from their labor-intensive supply ordering process.
VHA Inc., the national health care network, announced that the six hospital groups in Kansas and Missouri that own Mid-America Service Solutions (MSS) LLC, a Consolidated Services Center (CSC), are seeing the benefits of using VHA's automated system that saves money by managing transaction flow; provides common standards for purchasing supplies; improves order accuracy; and reduces the need for costly inventory management. MSS is the first VHA SupplyNetwork to benefit from this powerful and highly automated system which processes orders, invoices and other business transactions at an overall untouched accuracy rate of 98.1percent. More than 70 organizations currently participate in MSS, purchasing any of 98,000 products in more than 150 product categories at a set contract price.
This technology system fully integrates GPO contract and pricing systems with a hospital's materials management system and ensures the contract price is used when buying products from suppliers. It also validates every price and product in the purchase order, purchase order acknowledgement, advance ship notice, and invoice, ensuring the hospital always knows what it is buying and that the price is correct. Further, the system allows the hospital to receive weekly product and price synchronization files that the hospital uses to keep its item masters current.
Working as a single entity to leverage the contracting and analytics services provided by VHA's supply contracting company, Novation, MSS has done more than aggregating purchasing volumes for custom contracting. It has also refined operating expenses, advanced supply chain efficiency, decreased costs, streamlined operations and helped its hospitals elevate their supply chain performance.
"Previously, we had a lot of pricing and product accuracy errors in our purchasing that cost us extra time and money and frustrated our materials managers and staff," said Bob Essner, director of materials management, Freeman Health System, Joplin, Mo., and chair of the MSS Operations Committee. "The use of the new system has eliminated many of these issues by checking pricing against the master file before we release the order to suppliers."
CSCs represent an important element of VHA's supply network strategy that focuses on connecting members and suppliers at the regional level to help them save money in unique and valuable ways. MSS members spend approximately $1.2 billion dollars on supplies. Since its inception, MSS has achieved an annualized savings of $25 million. To date, more than 197 initiatives have been completed with more than $300 million in member spend under 165 active contracts.
Because the system's protocols align with GS1 standards, MSS members will not need to rework the system to become GS1 compliant. Hospitals using GS1-compliant systems will realize a significantly positive impact on their reimbursements that directly affects an organization's bottom-line stability.