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New Neoforma Offering Sheds Light on Crucial Hospital Supply
Spend Information to Reveal Savings Opportunities
On-Demand Spend Intelligence Solution, Currently in Pilot, Provides Clear,
Ongoing Visibility, Empowering Hospitals to Monitor and Control Supply Spending
SAN JOSE, Calif., July 25 /PRNewswire-FirstCall/ -- Neoforma, Inc.
(NASDAQ:NEOF), a leading provider of supply chain management solutions for the
healthcare industry, has developed a new solution that provides hospitals with
a comprehensive analysis of their total supply spend to optimize contract
compliance, negotiate more competitive pricing with suppliers and drive greater
cost-effective product utilization. Extending Neoforma's advanced data
management infrastructure that draws on robust industry content sources and
product expertise, Neoforma's new on-demand spend intelligence solution
delivers accurate, ongoing visibility and greater control over supply spend to
drive significant cost savings.
(Logo: http://www.newscom.com/cgi-bin/prnh/20030226/NEOFORMALOGO )
Several hospitals are currently in pilot with the new solution. Neoforma
expects to launch the fully hosted spend intelligence solution to the broad
market later this year, making it a unique hospital-focused offering in a
competitive market that includes several supplier-developed or homegrown
products.
"With accurate and timely information about my spend, I can strategically arm
myself in financial conversations with senior management, clinicians and
suppliers, and therefore am able to more effectively drive meaningful changes
in contracts and our physicians' use of preference items," says Mike Brown,
director of purchasing for University Health Care System, Augusta, Ga., who is
piloting Neoforma's new solution. Brown manages more than $45 million in
annual supply spend for the 551-bed hospital. "Importantly, because the
solution is delivered in a hosted model, using it does not take a toll on our
IT department. I expect the new solution to open up new avenues for savings
for University."
Brown, a supply chain management expert who entered healthcare from
manufacturing two years ago, adds that the industry knowledge and provider
focus of the Neoforma team are critical attributes when looking for a supply
chain partner. "It's great to have Neoforma as a trusted partner to tackle the
data management and maintenance needed to support spend analysis on an ongoing
basis, saving me time and resources that can be used for other priorities. In
addition, because of Neoforma's unique provider philosophy and approach to
supply chain problems, I'm confident in the quality and accuracy of the data
used to populate the reports. Neoforma understands the supply chain and what
hospitals need to have success in cost-savings initiatives."
Memorial Health System, a 562-bed hospital in Springfield, Ill., also is
participating in Neoforma's pilot program to support the hospital's overall
best practice supply chain initiatives. The hospital, which has an annual
supply spend of $105 million, has a goal to reduce supply costs by $2 million
each year, and is on track to meet or exceed that goal this year, largely due
to new insight gained from supply spending.
"Neoforma provides tools that strengthen my strategic contributions to my
health system. Built on Neoforma's data framework, the on-demand offering
provides a cost-effective way for Memorial Health System to access and maintain
robust spend intelligence reports that will help me meet my strategic
cost-savings goals," says Kevin Voigt, Memorial's system director of materials
management. "In addition, we've had excellent results over the years working
with Neoforma on our supply chain challenges, and I'm excited to contribute to
the development of an important new Neoforma product offering so that we
together can continue to bring value to the industry."
Hospitals have struggled to identify cost savings opportunities in the supply
chain due to a lack of visibility into spend information. With tens-
of-thousands of products and vendors to manage, purchasing databases quickly
become outdated, making it nearly impossible for executives to clearly
understand how purchasing dollars are actually being allocated. Without a
sound spend intelligence initiative, hospitals cannot rely on existing data or
processes to assess total spend in major product categories or how products
should be priced under existing contracts. Hospitals, therefore, have been
limited in their ability to identify savings opportunities, according to Dan
Eckert, president and chief operating officer of Neoforma.
"Supply expenses, which account for up to 30% of a hospital's spend, should be
one of the first targets of hospital cost reduction efforts, especially for
executives looking for opportunities to redirect monetary and resource savings
into important clinical care initiatives," Eckert says. "By garnering
accurate, timely and ongoing visibility into their own supply spending trends
based on the foundation of clean, accurate and categorized data Neoforma
provides, hospitals will now be armed to more cost-effectively utilize
resources and negotiate with vendors. We are proud to offer a new solution
that sheds light onto hospital supply spend, an area that's been in the dark
for too long."
Neoforma's solution for on-demand spend intelligence delivers a comprehensive,
up-to-date view of a hospital's supply spend, enabling healthcare organizations
to uncover ongoing supply chain savings opportunities. Leveraging Neoforma's
advanced data services and rich product and content resources, the new
solution's sophisticated analysis tools deliver visibility into a hospital's
spending trends and contract utilization, in addition to highlighting
opportunities to negotiate more competitive supply contracts and identify
contract-related savings opportunities. Delivered in a hosted environment
without the expense of traditional software applications or investment needed
into content resources, Neoforma's spend intelligence solution gives decision
makers a cost-effective way to focus quickly on target areas of interest and
drive ongoing cost savings by:
-- Maximizing the benefits of contract pricing,
-- Shifting spend from off-contract to contract items,
-- Increasing volume aggregation and optimizing the number of suppliers,
-- Identifying potential overpayments,
-- Conducting more effective vendor negotiations, and
-- Improving the management of product utilization.
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 marketplace
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
Neoforma's new Web site at 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 Neoforma providing
hospitals a new solution which allows them to conduct a comprehensive analysis
of their total supply spend to optimize contract compliance, negotiate more
competitive pricing with suppliers and drive greater cost-effective product
utilization, Neoforma's new on-demand spend intelligence solution delivering
accurate, ongoing visibility and greater control over supply spend to drive
significant cost savings for hospitals, hospitals now being armed to more
cost-effectively utilize resources and negotiate with vendors and Neoforma's
spend intelligence solution giving decision makers a cost-effective way to
focus quickly on target areas of interest and drive ongoing cost savings.
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 new nature of Neoforma's spend intelligence solution and
relative untested nature of such solutions, the risk that customers will not
adopt such solution, 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 March 31, 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.
http://www.newscom.com/cgi-bin/prnh/20030226/NEOFORMALOGO
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DATASOURCE: Neoforma, Inc.
CONTACT: media, Rebecca Oles, +1-408-468-4363, or
, or investors, Amanda Mogin, +1-408-468-4251, or
, both of Neoforma, Inc.
Web site: http://www.neoforma.com/