New top leadership at VHA and continuing public scrutiny of hospital group purchasing apparently did little to slow growth at the hospital cooperative. At its national leadership conference in San Diego, VHA said it will distribute 100% of its 2003 operating income of $121 million to 475 hospital members in the form of cash dividends and patron's equity redemptions. In addition, VHA members directly received $194 million in manufacturer incentives. The $315 million marks a 22% increase over 2002 cash benefits. The cooperative does not publicly report net revenue. It recorded $120 million in operating income in 2002. Healthcare providers purchased more than $17.7 billion in supplies and services in 2003 through VHA and its group purchasing organization, Novation, a 5.1% increase over 2002. Including participation from VHA's group purchasing partner, University HealthSystem Consortium, purchases through Novation topped $20.7 billion in 2003. Of that, VHA members purchased $16.2 billion, a 3.9% increase over the prior year.
In other conference news, VHA named Joseph Zaccagnino, president and chief executive officer of Yale New Haven (Conn.) Health System, as its new board chairman. New board members are J. Lindsey Bradley Jr., president and chief administrative officer of Trinity Mother Frances Health System, Tyler, Texas; Jerry Myers, a partner in CroBern Management Partnership, Chicago; and Joel Wernick, president and CEO of Phoebe Putney Memorial Hospital, Albany, Ga. James Varnum, president of Mary Hitchcock Memorial Hospital and Dartmouth-Hitchcock Alliance in Lebanon, N.H., ended his term as chairman but will remain on the VHA board as a director. -- by Cinda Becker