NEOF Neoforma Inc. (MM)

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. (Logo: http://www.newscom.com/cgi-bin/prnh/20030226/NEOFORMALOGO ) "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. http://www.newscom.com/cgi-bin/prnh/20030226/NEOFORMALOGO http://photoarchive.ap.org/ 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/

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