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CHARLOTTE, N.C. -- Premier Inc. (NASDAQ: PINC), a leading healthcare improvement company, has acquired Medpricer, one of the nation’s leading technology-based solutions, to optimize healthcare provider savings across purchased services contracts.
Medpricer is a software-as-a-service (SaaS) provider of technology solutions that enable hospitals and other organizations to analyze, benchmark and source purchased services contracts independent of any existing group purchasing organization (GPO) affiliation. Medpricer’s spend management platform uses machine learning to validate, compare and onboard purchased services suppliers; track and measure spend by category, supplier and facility; benchmark contracts terms to ensure competitive rates; set and manage specific savings targets; and manage contract compliance.
“In even the best run organizations, purchased services are often managed in disparate departments lacking centralized data or oversight, making them difficult to aggregate for volume-based discounts,” said Susan DeVore, Chief Executive Officer of Premier. “Getting at this largely untapped source of savings is vitally important, yet most healthcare providers are managing these contracts using home-grown solutions with a limited view across all of their contracts. Medpricer gives us a scalable technology platform and data-driven evidence designed to gain control over purchased services spend – regardless of GPO affiliation. Combined with Premier’s market-leading, categorized purchased services spend data and our sophisticated performance improvement technology suite, we believe we will be uniquely situated to become the one-stop-shop for healthcare margin improvement.”
Purchased services are those provided by a third-party vendor to accomplish routine, continuing and necessary clinical and non-clinical functions, including revenue cycle management, marketing, lab testing and environmental services. According to research, purchased services account for up to 30 percent of a typical healthcare provider’s non-labor expenses, and represent a total addressable acute care market of approximately $160 billion. These services often fall outside the scope of national group purchasing contracts. As a major area of spend, understanding purchased services trends is crucial to healthcare operations, but accessing external data on pricing trends is limited without assistance from an outside partner. Gaining transparency into this area is a central pillar within a total cost management approach to improving margins.
Named one of 2019’s best places to work in healthcare by Modern Healthcare and one of the 20 Most Promising Supply Chain Solution Providers in 2019 by CIO Review, Medpricer has successfully implemented its SaaS products and supporting services in leading healthcare systems across the United States, including Premier members Geisinger Health and Banner Health. Users of the Medpricer end-to-end lifecycle cost management platform and expert services typically save an average of approximately 24 percent on their existing purchased services contracts and reduce their time to RFP by 40 percent. Across Medpricer’s customer base, the company reports saving healthcare providers more than $700 million in purchased services spend.
Premier funded the $35 million acquisition with borrowings under its existing credit facility. The acquisition is not expected to materially impact financial results in FY2020 and is expected to be modestly accretive in FY2021.
Medpricer’s current employees are expected to continue operations from their existing northern California office, or remotely. Current CEO Chris Gormley will continue to lead the business as part of Premier’s Supply Chain Services segment, ensuring Medpricer has the resources to continue its mission of helping healthcare providers reduce costs and improve the quality of their purchased services.
Statements made in this release that are not statements of historical or current facts, such as those related to Premier's ability to provide enhanced and expanded capabilities, products and services, and penetrate the addressable market for purchased services, and the timing and amount of any financial contribution, if any, from the acquisition, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Premier to be materially different from historical results or from any future results or projections expressed or implied by such forward-looking statements. Accordingly, readers should not place undue reliance on any forward-looking statements. In addition to statements that explicitly describe such risks and uncertainties, readers are urged to consider statements in the conditional or future tenses or that include terms such as "believes," "belief," "expects," "estimates," "intends," "anticipates" or "plans" to be uncertain and forward-looking. Forward-looking statements may include comments as to Premier's beliefs and expectations as to future events and trends affecting its business and are necessarily subject to uncertainties, many of which are outside Premier's control. More information on potential factors that could affect Premier's financial results is included from time to time in the "Cautionary Note Regarding Forward Looking Statements," "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of Premier's periodic and current filings with the SEC and also made available on Premier's website at investors.premierinc.com. Forward looking statements speak only as of the date they are made, and Premier undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise that occur after that date.
Premier Inc. (NASDAQ: PINC) is a leading healthcare improvement company, uniting an alliance of more than 4,000 U.S. hospitals and health systems and approximately 250,000 other providers and organizations to transform healthcare. With integrated data and analytics, collaboratives, supply chain solutions, and consulting and other services, Premier enables better care and outcomes at a lower cost. Premier plays a critical role in the rapidly evolving healthcare industry, collaborating with members to co-develop long-term innovations that reinvent and improve the way care is delivered to patients nationwide. Headquartered in Charlotte, N.C., Premier is passionate about transforming American healthcare. Please visit Premier’s news and investor sites on www.premierinc.com; as well as Twitter, Facebook, LinkedIn, YouTube, Instagram and Premier’s blog for more information about the company.