News
FOR IMMEDIATE RELEASE
CONTACT:
Alven Weil
Premier Inc.
704.733.5797
Premier healthcare alliance sets record for new member recruitment, validated savings and cash distributions to owners
Growth reflects increasing value to members, introduction of tools and technology, and industry leading contracts
CHARLOTTE, NC (March 19, 2008) – The Premier healthcare alliance returned a record $233 million in cash distributions from record revenues to its owner not-for-profit hospitals and healthcare systems in fiscal 2007, making it possible for owners to better meet the healthcare needs of their communities.
Premier distributions of total GPO revenue are substantially higher than those of other GPOs, and Premier has already distributed a record $105 million for the first six months of FY 2008.
In addition to cash distributions, the Premier healthcare alliance generated record validated member savings of more than $667 million, while the group purchasing network grew to almost 1,600 hospitals and nearly 50,000 other healthcare sites, such as surgery centers and long term care facilities.
“These distributions make a real difference to not-for-profit hospitals across the nation and our ability to deliver high quality healthcare,” said Douglas D. Hawthorne, CEO of Texas Health Resources, a Premier owner serving the Dallas-Fort Worth area. “This is just one example of the many ways in which patients and communities benefit from participation in the Premier alliance.”
Premier Purchasing Partners President Mike Alkire said, “Our members make these distributions possible through their utilization of the group purchasing contracts we negotiate on their behalf. The impetus for this utilization improvement is the successful implementation of our total spend management tool, which is now utilized in 560 hospitals. We work closely with our members to evaluate products and suppliers and to ensure that our contracts meet their needs. Our members are the reason we’re the top group purchasing organization in healthcare.
“As for member savings,” Alkire explained, “they are validated by the members to whom they were delivered. These are not identified savings; these are savings our owners and members have signed off on as directly feeding to their bottom lines.”
Premier Chief Operating Officer Susan DeVore said, “All four Premier business units experienced strong performances in FY 2007. Purchasing Partners achieved a milestone with more than $31 billion in total group purchasing volume. Healthcare Informatics revenues are on track to increase by more than 38 percent in FY 2008. Our wholly owned insurance subsidiary had its best financial performance since 2001, and our newly consolidated consulting division is currently achieving revenue growth of more than 25 percent.”
Premier has also experienced rapid growth of SafetySurveillor™, its real-time application to prevent healthcare-associated infections (HAIs) and optimize antibiotic use. More than 200 hospitals have selected the Web-based system to enhance patient care, making SafetySurveillor the most widely adopted infection control solution over the past 12 months.
Premier President and CEO Richard A. Norling noted that “through our alliance, hospitals work together to be the best healthcare providers in America. We are able to support patient care in this way through the growth of our alliance and the enthusiastic participation of our members.”
Premier recruited hospitals with nearly $2 billion of supply expense last year. Highlighting the growth of the Premier healthcare alliance is its success in the academic medical center arena. Since 2006, Premier has added five major academic and teaching health systems, and two more recommitted to Premier.
More than 100 IDNs have installed or committed to the My Spend module of SpendAdvisor. The My Spend and Pharmacy Spend modules now represent more than $10 billion of medical, surgical and pharmacy spend volume. Hospitals and healthcare systems using SpendAdvisor are driving better contracts with savings of between 4 percent and 8 percent on average. The newest SpendAdvisor My Spend functionality includes automatic tier analysis and a revised supply cost reports that allow member users to manage the impact of “technology creep.”
A portfolio of contracts for spinal implants and related accessories agreements has provided Premier members with more than $30 million in aggregated savings, as well as new opportunities to learn about future technology and how to improve clinical outcomes.
New agreements for suture, endomechanical, and topical wound sealant products offer members significant savings, price protection and a wide choice, with both full-line and specialty suppliers.
Premier’s new agreements for orthopedic total joint implants, effective April 1, include the latest technologies, additional pricing models and other features that offer members savings. Contracts include improved price protection periods that limit future yearly increases and capitation pricing options that allow members to pay a set price for a total joint procedure type. In certain cases, elimination of loaner fees and standard shipping costs also will result in significant savings over the life of the contracts.
About Premier Inc., 2006 Malcolm Baldrige National Quality Award recipient
Serving more than 2,000 U.S. hospitals and nearly 50,000 other healthcare
sites, the Premier healthcare alliance and its members are transforming
healthcare together. Owned by not-for-profit hospitals, Premier operates one of
the leading healthcare purchasing networks and the nation's most comprehensive
repository of hospital clinical and financial information. A subsidiary operates
one of the nation's largest policy-holder owned, hospital professional liability
risk-retention groups. A world leader in helping healthcare providers deliver
dramatic improvements in care, Premier is working with the United Kingdom's
National Health Service North West and the Centers for Medicare and Medicaid
Services to improve hospital performance. Headquartered in San Diego, Premier
has offices in Charlotte, N.C., Philadelphia, and Washington. For more
information, visit www.premierinc.com.