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Neoforma DMS Helps VHA Member Hospitals Uncover Savings
Opportunities
VHA Hospitals Are Reaping the Benefits of Clean, Standardized and
Well-Maintained Data, Increasing Their Ability to Systematically Analyze Total
Spending Across Their Organizations
SAN JOSE, Calif., May 10 /PRNewswire-FirstCall/ -- Hospitals across the
country are increasingly adopting the innovative data management and
maintenance services provided by Neoforma, Inc. (NASDAQ:NEOF) to analyze
spending information and reduce supply chain costs. Many hospitals that belong
to VHA Inc., the national healthcare alliance, are using Neoforma Data
Management Solution(TM) (Neoforma DMS) and realizing increased efficiencies and
savings opportunities from improved visibility to clean, standardized supply
chain data, which enables more powerful, ongoing spend analyses across a
hospital's total purchasing history.
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"Information is power, and Neoforma DMS gave us access to data that allowed us
to perform analyses across our system in a way that wasn't possible before
because the condition of our data wouldn't allow it," says Jack Medkeff,
director of materials services for Genesis Healthcare System, a 373-bed,
two-hospital system in Zanesville, Ohio. Medkeff, a 30-year veteran of the
healthcare supply chain, recently completed a Neoforma DMS project that
generated more than $400,000 in immediate savings opportunities for Genesis,
simply by pointing out where the hospital was purchasing products with
off-contract prices across their purchase order history.
Neoforma DMS's comprehensive supplier-provided database has more than two
million records of accurate vendor and product information and sophisticated
auto-matching technology that accelerated the cleaning and normalization of
Genesis' item master. Genesis was able to reduce the number of records in its
item master by nearly 30 percent by eliminating erroneous and duplicate
entries, as well as those items that had not been purchased for years. From
there, using industry-leading loading technology, Neoforma's team of healthcare
professionals quickly categorized Genesis' item master to the UNSPSC(R) product
classification system. With the help of Neoforma DMS and Neoforma supply chain
experts, Genesis was able to quickly get to immediate savings opportunities
across its entire supply spend.
"Neoforma understands what I need to alleviate cost pressures my hospitals
face, and its provider focus translates to real hard dollar savings. Because
of this, and their partnership with VHA, Neoforma is the only one I trust to
provide sensitive pricing data to help drive decisions," Medkeff states.
"Without changing a single process today, Neoforma pointed out where I could
save my hospital nearly half-a-million dollars, money better spent on important
patient care initiatives. This just scratches the surface of the kind of
powerful spend discoveries I believe Neoforma DMS will continue to deliver
going forward."
To promote greater awareness of supply spending patterns across its
organization, 551-bed University Healthcare System in Augusta, Ga., worked with
the Neoforma DMS team to use the UNSPSC code to correctly classify 10,000
individual products in the hospital's item master. Accuracy is key to
performing the kind of insightful analyses University needed to lock in the
most advantageous prices for the innovative products used at the hospital, such
as drug-eluting stents and neurosurgical implants. Neoforma DMS revealed
opportunities for the hospital to enhance its bargaining power with
manufacturers, and enabled the hospital, in one case, to negotiate a greater
manufacturer market share contract for drug-eluting stents, reducing costs by
14 percent -- a savings of $600,000 per year.
"My reports to the administration now contain month-to-month spending levels,
so there is a greater awareness of spending patterns and priorities at the
executive level," says Mike Brown, University's director of purchasing. "We're
also better able to phase out discontinued products and get new products coded
in a timelier manner. Neoforma is the link between my data and the ability to
drive decisions that made all of this possible." Brown, a supply chain
management expert who entered healthcare from manufacturing two years ago, was
also impressed with the institutional knowledge and provider focus of the
Neoforma DMS team, attributes he says are critical when looking for a supply
chain partner.
Although South Jersey Healthcare Regional Medical Center, in Vineland, N.J.,
was one of the newest hospitals in the state, its item master and operating
room (OR) files were outdated and inaccurate. Much of the organization's
supply information was more than a decade old. "We had a database made up of
about 40,000 records, and many had the deficiencies you'd expect to see with an
antiquated system: duplicate and erroneous entries, pricing issues, cryptic
descriptions and information gaps," says Bob Minnick, director of materials
management for the 262-bed hospital.
After completing a Neoforma DMS implementation as part of an upgrade to its new
materials system late last year, the hospital was finally able to generate
insightful reports that helped to identify volume aggregation opportunities in
its OR, and to take advantage of the hospital's strategic cost savings
programs. Achieving synchronized and accurate data in its OR and item master
files had positive implications across South Jersey's organization. "The
purchasing staff can source products more effectively, and we now have better
visibility into purchasing patterns for items such as sutures, stents and
medical devices. I believe that having a clean item master will help us
consistently buy on contract and pay the right price for those products over
the long term," says Minnick.
"Neoforma is a trusted partner in VHA's supply chain management initiatives.
Neoforma has shown again and again that its solutions drive measurable value to
our members," says Mike Cummins, chief information office for VHA. "With its
leading-edge technology and support for industry standards, Neoforma DMS is a
proven solution for driving additional efficiencies and uncovering cost savings
opportunities in the supply chain. It is the perfect complement to the
portfolio of supply chain services already available to VHA members through
Neoforma and Marketplace@Novation(R)." In June 2004, VHA named Neoforma as a
provider of supply chain data cleansing and maintenance services to the VHA
membership base.
Leading VHA hospitals that have signed to use Neoforma DMS this year include
Blessing Corporate Services, Inc., Quincy, Ill.; Scott & White Memorial
Hospital, Temple, Texas; Community Medical Center, Missoula, Mont.; Baptist St.
Anthony's Health System, Amarillo, Texas; DCH Health System, Tuscaloosa, Ala.;
Maine General Medical Center, Augusta, Maine; and, Memorial Health System,
Springfield, Ill.
"Clean, accurate data is the foundation for a more efficient healthcare supply
chain," says Dan Eckert, Neoforma president and chief operating officer. "We
believe that information can provide our customers the power they need to drive
change, through improved decision making. The results improve the bottom line
for the hospital and support the critical mission of the hospital -- taking
care of the patient."
Neoforma DMS is a powerful data cleansing and maintenance solution that enables
hospital customers to improve the accuracy of their item master and vendor
master data files, as well as increase utilization through contract matching
services. Additionally, Neoforma DMS offers rich intelligence on spend data
and purchasing history so that hospitals have accurate information to make
better decisions on supply spend. Neoforma DMS enables users to better
maintain data integrity and accuracy on an ongoing basis. The Neoforma DMS
team is comprised of healthcare and supply chain professionals that understand
the unique business and financial challenges hospitals face every day.
Neoforma DMS leverages the UNSPSC, a global standard that does not lock
hospitals into proprietary and costly code systems. By standardizing category
descriptions using UNSPSC, hospitals get a more updated, accurate view of their
spend history with more dynamic, drilldown of supply chain data with views by
vendor, category or product.
About Neoforma
Neoforma is a leading supply chain management solutions provider for the
healthcare industry. Through a unique combination of technology, information
and services, Neoforma provides innovative solutions to over 1,600 hospitals
and suppliers, supporting more than $11 billion in annualized transaction
volume. By bringing together contract information and order data, Neoforma's
integrated solution set delivers a comprehensive view of an organization's
supply chain, driving cost savings and better decision-making for both
hospitals and suppliers. For more information, point your browser to
http://www.neoforma.com/.
This news release contains forward-looking information within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking statements
include but are not limited to statements related to hospitals increasingly
adopting Neoforma DMS to help reduce supply chain costs, VHA member hospitals
realizing increasing efficiencies and savings opportunities using Neoforma DMS,
the continuing results hospital customers expect using Neoforma DMS, the
ability of Neoforma to continue driving measurable value to VHA members, and
the improvements to Neoforma's customers' bottom line. There are a number of
risks that could cause actual results to differ materially from those
anticipated by these forward-looking statements. These risks include the
willingness of customers to accept Neoforma's business model of providing
supply chain management solutions for the healthcare industry, the willingness
of allowing Neoforma to process hospital data, the costs associated with
providing the services expected by Neoforma customers, and the ability of
Neoforma to manage its technological challenges. Some of these risks and other
risks are described in Neoforma's periodic reports filed with the SEC,
including its Form 10-Q for the quarter ended May 9, 2005. These statements are
current as of the date of this release and Neoforma assumes no obligation to
update the forward-looking information contained in this news release.
NOTE: Neoforma is a trademark of Neoforma, Inc. Other Neoforma logos, product
names and service names are also trademarks of Neoforma, Inc., which may be
registered in other countries. Other product and brand names are trademarks of
their respective owners.
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DATASOURCE: Neoforma, Inc.
CONTACT: Rebecca Oles, +1-408-468-4363, or , or
investors, Amanda Mogin, +1-408-468-4251, or , both
of Neoforma
Web site: http://www.neoforma.com/