Premier’s acquisition in February of regional GPO Acurity will lead to some contract shuffling in the New York tri-state area.
Acurity, a former subsidiary of the Greater New York Hospital Association, has served members in New York, New Jersey and Connecticut for more than 40 years, and has been a Premier customer and strategic partner for 24 of those years. With more than 300 hospital members and 2,700 health-related facilities, Acurity in FY2019 accounted for approximately $68 million – or 10% – of Premier’s total net administrative fees.
Premier’s acquisition of Acurity takes GNYHA out of the group purchasing business.
“The loyalty between Acurity and its members, generated over a 40+-year history as a GPO, is an important reason why Premier acquired Acurity,” said Premier Senior Vice President of Supply Chain David Hargraves. “Remaining relevant, maintaining high participation while identifying savings opportunities, and contracting in new technologies and gap areas will continue to be important elements of Acurity’s mission and success within Premier.”
Premier acquired all of Acurity’s member participation contracts. In addition, Hargraves told The Journal of Healthcare Contracting that:
- Where Acurity and Premier contracts overlap, the Acurity contracts will merge with existing Premier contracts at the end of their Acurity terms.
- When possible, Acurity will continue to enhance Premier contracts in order to bring value to providers with unique needs and requirements.
- Acurity’s local contracts for the tri-state area – e.g., those with diverse suppliers, local trades and in areas where local licensure is a factor – will remain in place to the extent that member interest and participation remain.
In addition, Hargraves said the acquisition: 1) secures five-year terms for group purchasing contracts at economics similar to historic rates, without termination-for-convenience clauses for the majority of acquired contracts; and 2) reduces functional overlap between Premier and Acurity, particularly in the supply chain contracting and member analytics and reporting areas, and by further eliminating duplicative GPO costs.
In addition to Acurity, Premier in February also purchased GNHYA subsidiary Nexera, which manages and co-manages supply chain operations for a number of Acurity clients. Premier expects to scale and expand Nexera’s business outside of the New York tri-state area. “Nexera brings compelling and complementary offerings to Premier’s portfolio,” said Hargraves. “We expect to further scale and expand its business outside of the New York market to provide technology-enabled value analytics capabilities, supply chain business intelligence, and consolidated or virtual buying functions to a broad