CHARLOTTE, N.C.--(BUSINESS WIRE)--
Premier Inc. (NASDAQ:PINC), a leading healthcare improvement company,
today issued the following statement in response to speculation that new
market entrants will disrupt Premier and other companies that have group
purchasing organizations (GPOs) serving the healthcare provider industry.
Statement
There has been recent speculation that new market participants are
contemplating entrance into the healthcare supply chain with the intent
to disintermediate GPOs. Over its more than 20-year history, Premier has
evolved from a group purchasing and benchmarking organization,
cooperatively owned by our member-owner healthcare providers, into a
mission critical partner, offering clinical, operational and
administrative solutions and managing over $56 billion in supply chain
spend. The transformation of our company has been driven by our member
owners’ critical need to harness the collective power of our
organizations in solving their most pressing cost, quality and safety
issues as they continue their evolution to value-based care.
This alignment is evidenced by their commitment and ownership in
Premier. As an organization, we continually evaluate our competitive
positioning within the marketplace and how to augment our value
proposition to our provider partners. Together with our 167 member
owners, 3,900 hospitals and health systems, and 150,000 other providers,
we are highly confident in our ability to continue to drive the
transformation of high quality, cost effective healthcare. Among the
many reasons these groups continue to partner with Premier, below is a
brief summary.
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Premier’s efficient channel is driving optimum savings for providers:
Over our history as an organization, we have helped our provider
partners save billions of dollars. The administrative fee charged by
Premier to suppliers for our group purchasing services averages
approximately 2 percent, some of which is typically distributed back
to our providers. Other online companies have comparable supplier-paid
fee models in which we believe the transaction fee typically ranges
between 5-to-15 percent. Moreover, because Premier is majority owned
by healthcare providers and interacts with these member owners in a
comprehensive and ongoing basis, we believe we have achieved a high
level of trust and confidence that is critical when dealing with
products and services that impact people’s lives. This includes the
regional buying groups and aggregators that Premier works closely with
as another means to organize and align with healthcare providers. This
alignment and trust is especially important in healthcare. Unlike the
consumer marketplace, healthcare involves complex products and
services that are highly regulated and save people’s
lives. Decision-making on these products requires clinical judgment.
Providers also need to manage recalls, shortages, and emergency safety
issues. Moreover, because healthcare is regulated, companies cannot
simply manufacture products on a spot basis. Premier aggregates
purchasing so that product can be predictably manufactured and made
available.
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Premier’s data and analytic tools provide differentiated value to
healthcare providers: The backbone of our solutions is a virtual
technology infrastructure which we believe is unparalleled today.
Premier has access to data encompassing approximately 45 percent of
U.S. hospital patients, and leverages this clinical data set to
provide vital analytics to providers. Our products and services
provide transparent pricing and enable rapid pricing adjustments to
assure competitiveness. In a constantly changing, complex product and
service environment, we believe healthcare providers rely on Premier
to supply this critical information. Moreover, Premier’s data and
analytics enable providers to identify appropriate and inappropriate
product usage, as well as the relative value of different products.
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Premier defines value for its members beyond unit cost: Given
our heritage is consistent with our mission, we define value for our
members through several variables. The quality, safety and efficacy of
products are equally important to the providers with whom we partner
as the unit cost. Our member clinical committees review the literature
and factors impacting product effectiveness, bring comparative data to
bear in organizations’ decision-making, provide evaluation of selected
products and services, and deliver ongoing support for organizations’
decision-making process with clinical experts. While cost remains a
critical component, we believe our partners value the holistic way in
which we critically evaluate the products on their behalf.
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Premier deploys a dynamic set of capabilities to extract value for
its members: We have developed complex global strategies to drive
superior value for our provider partners. For commodity oriented
items, Premier can set specifications and strongly encourage
manufacturers around the world to bid or go directly to manufacturing
plants to source the products. Because we operate one of the nation’s
largest GPOs, we believe we command market-leading prices. For more
sophisticated “physician preference” items, we can draw upon our vast
real-world data to create or confirm safety, quality and efficacy
metrics. We work directly with clinicians and other providers to
develop specifications, and then negotiate the best price or value,
understanding that a product with higher efficacy in saving lives
reduces the total cost of care. Premier also has disrupted the supply
chain through aggregated members purchasing and direct distribution
operations, further reducing supply chain expenses.
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Premier deploys efficient e-commerce capabilities across healthcare:
Our electronic procurement and marketplace has been rated by KLAS as
the healthcare industry’s leading enterprise resource platform. We
believe this is the only pure healthcare exchange that allows for
fluid transactions of purchasing and payment with efficient price
synchronization across the supply chain. This cloud-based platform
helps our healthcare members modernize procurement by standardizing,
integrating, and enabling e-commerce. Healthcare managers can
seamlessly access our manufacturer contracts and manage inventory
levels. This allows them to manage procurement across the continuum of
care, apply dynamic approval levels, and implement spend controls that
drives efficiency.
About Premier Inc.
Premier Inc. (NASDAQ:PINC) is a leading healthcare improvement company,
uniting an alliance of approximately 3,900 U.S. hospitals and health
systems and approximately 150,000 other providers and organizations.
With integrated data and analytics, collaboratives, supply chain
solutions, and advisory and other services, Premier enables better care
and outcomes at a lower cost. Premier, a Malcolm Baldrige National
Quality Award recipient, 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.
Forward-looking statements
Matters discussed in this release that are not statements of historical
or current facts 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
“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 available on Premier’s website at investors.premierinc.com.
Forward looking statements speak only as of the date they are made.
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.
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Source: Premier Inc.