Inova Health System Case Study
Inova Health System (Inova) is a not-for-profit healthcare provider based in northern Virginia that offers acute, surgical, long-term, home, mental and satellite emergency healthcare services. The company was founded in 1958 as a country hospital in Fairfax, Virginia. Today, Inova supports four hospitals, two nursing homes, several family practice centers and a number of emergency room facilities.
In 2002, Inova maintained approximately 1,400 beds, generated revenues of more than $1.3 billion, and employed more than 13,000 people. It is actively involved in philanthropy programs for the community through the Inova Health System Foundation.
Key Business Issues and Challenges
In 1995, Inova was operating a highly decentralized contracting and procurement department that
was spending $300 million annually for the purchase of all products required to support the hospital,
from drugs to copiers to highly sophisticated medical equipment. Eighty percent of the orders were
placed by "internal customers" - Inova's employees - who were distributed in 25 physical
locations over a 40 mile radius.
Inova was operating an underutilized in-plant print shop that housed four offset presses, including two color presses and two high volume copiers. The operation was inefficient, plagued by long delivery cycles, and cost Inova between $2.5 and 3 million annually to maintain the equipment. In addition, according to Gary Wagner, Inova's Assistant Vice President for Materials Management, Inova was using "every quick copy company in northern Virginia" and generating more than 20-25 million quick copies per year.
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