Some 518 hospitals have signed up for the VHA committed-buying program, including about half its shareholders and partners, more than double the alliance target so far.
Committed-buying programs are a new trend in healthcare group purchasing driven by pressure to cut costs. Such programs offer hospitals lower prices in return for pledges to buy a high percentage of eligible goods under contract.
The VHA program, called Opportunity, requires hospitals to buy 95% of eligible products under certain contracts. In comparison, the average compliance rate for those contracts has been about 77% (Sept. 18, 1995, p. 16). The Opportunity program began Jan. 1.
Participants are expected to spend about $450 million annually under Opportunity contracts. They will save $61 million through incentives, discounted pricing, fee waivers and other means, VHA said.
"We view this as the first phase of a broader committed program," said Bill Elliott, senior vice president of supply chain management at VHA.
All told, VHA members are expected to buy more than $6.7 billion in goods and services through VHA contracts in 1996.