Goodroe is the only organization that has earned approval from the OIG forits gainsharing models. In all, Goodroe has received approval on 10gainsharing models designed to achieve economic alignment between hospitalsand their physicians. Their first approval was in 2001.

The authors estimated that widespread implementation of gainsharing for thenation's 620,000 coronary stent patients during 2005 could have yieldedsavings of approximately $195 million. The paper examined data collected byGoodroe's CathSource system on 220,520 coronary stent patients from thefourth quarter of 2001 through the fourth quarter of 2006.

The peer-reviewed study, "Hospital Physician Gainsharing in Cardiology,"was written by Jonathan D. Ketcham and Michael F. Furukawa, assistantprofessors in the School of Health Management and Policy at Arizona StateUniversity's W.P. Carey School of Business in Tempe.

"We are thrilled at the outcome of their research, and we're honored tohave contributed to their positive conclusions," said Joane Goodroe,founder of Goodroe Healthcare Solutions and a VHA senior vice president."These important results validate our long-held assertion that approvedgainsharing arrangements that align the patient's best interests withcost-effective, quality care indicates that physicians and hospitals canwork collaboratively to reduce healthcare costs while maintaining qualitypatient care."

Gainsharing arrangements reward physicians for helping the hospitalimplement cost-reduction strategies that maintain or improve patient carequality. Typically, physicians independently choose the medical devicesthey use during cardiac and other surgical procedures, such as pace makerimplants or implantable internal defibrillators.

Under a gainsharing arrangement, physicians and hospitals jointly reviewand evaluate patient outcomes, review cost variations for similar devicesand determine whether a lower-priced device delivers the same or betterpatient outcomes. Physicians may then voluntarily elect to use lower-costdevices as long as the quality of care is not negatively affected. Savingsat the end of a program year are then shared between the hospitals andparticipating physicians.

KEY FINDINGS:

--  Gainsharing reduced in-lab per-person costs in coronary stent patients    by $315--  Gainsharing had a positive affect on quality care--  Gainsharing did not result in physicians steering their sickest    patients to other hospitals--  Gainsharing could encourage physicians to collaborate and adopt best    practices    

"We found no evidence that gainsharing prompted physicians to avoidpatients with existing health problems or pick the healthiest patients,"said Ketcham. The study's authors write -- "Gainsharing reduces costs forcoronary stent patients while apparently leaving quality and accessunharmed." Ketcham adds that analyzing gainsharing's effects on additionalquality measures and understanding how gainsharing influences physicians'decisions would be valuable. The authors also note that widespread adoptionof gainsharing could alter how device makers decide which types of productsto develop and market.

About VHA Inc. -- VHA Inc. is a national alliance of leading not-for-profithealth care organizations that work together to improve the health of thecommunities they serve. VHA delivers industry-leading supply chainmanagement services and enables regional and national member networks toimprove clinical and operational performance, and drive sustainableresults. Based in Irving, Texas, VHA has 16 local offices serving more than1,400 hospitals and 21,000 non-acute health care organizations across theUnited States.

About Goodroe Healthcare Solutions, LLC -- Goodroe Healthcare Solutions, aVHA Inc.company (www.goodroe.com), is an Atlanta-based firm that concentrates onhelping hospitalsreduce costs and improve quality in specialty surgical areas. Goodroe'sclinical consultants workwith hospitals to analyze their care processes and find ways to makehospitals more efficientwhile improving effectiveness. Goodroe focuses on cardiology, orthopedicmedicine andneurosurgical procedures, such as insertion of spinal implants. Theseimportant specialtyservices generate 60 to 80 percent of supply costs for many largehospitals, as well asconsiderable revenues, so controlling costs associated with theseprocedures can help hospitalsimprove their financial health and assure that resources are available tofund other patient careactivities. Goodroe has helped more than 300 hospitals nationwide implementqualityimprovement and cost savings initiatives.