Healthcare alliance VHA, Irving, Texas, confirmed it has launched a major reorganization that includes laying off 125 employees, axing unprofitable service lines and focusing its efforts on the healthcare supply chain and development of networks of members tackling common clinical or operational problems. The alliance declined to elaborate on its plans. Prior to the reorganization, VHA and its group purchasing arm Novation had 1,268 employees. No estimate of costs savings was immediately available. The alliance reported net income of $114 million on revenue of $451 million in 2003, a 25% profit margin and an increase from the 16% margin posted in 2002, when it earned $72 million on $448 million in revenue. But VHA and Novation have been challenged by smaller, aggressive purchasing groups in the past few years. Modern Healthcare published an exclusive survey of the GPO industry in its Aug. 16 issue. Read the report. -- by John Morrissey
VHA limits focus to supply chain, member networks
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