GPO Standout – Premier

How compliant are your members to Premier contracts? How do you measure this? And what are your goals in this regard?
Premier has the highest level of voluntary contract utilization across the GPO industry’s broadest portfolio of products and services. We deliver differentiated value by combining innovative sourcing strategies with a high level of member participation….With a membership approaching 1,800 hospitals, one size does not fit all. However, because of our size we are able to create voluntary aggregation opportunities to…organizations that are, for example, able to maintain or commit a high percentage of market share in a specific contract category. We are able to demonstrate through our SupplyFocus benchmarking tool that greater utilization of the Premier portfolio corresponds with a lower supply expense as a percent of total operating expense….

Can you describe Premier’s approach to capital equipment contracting (e.g., reverse auctions, group buys, etc)?
Premier’s Construction and Renovation Program offers a comprehensive approach to capital from planning and budgeting, through purchasing and construction, all supported with a comprehensive capital equipment portfolio. Premier routinely has group buys for all facets of capital equipment….Premier field specialists work with members annually to help develop capital procurement plans and assist members with specific purchases…. Premier has a[n] embedded capital specialist program with a guaranteed ROI that works with members to deliver savings and contract value typically during periods of heavy acquisition (i.e. new construction, renovations, etc.). Additionally, we have partnered with the capital planning organization, Attainia, to deliver planning, tracking, budgeting and purchasing tools.

Does Premier engage in reverse auctions for non-capital items? If so, to what extent?
Premier was the first in the industry to conduct a reverse auction back in August 2002. Since then we’ve used our own technology to source about $4 billion in supply expense in virtually all contract categories. We have realized an average 19 percent price savings per category; our reverse auctions on drugs transitioning from branded to generic status have exceeded 90 percent savings and dramatically shortened the cycle-time to bring the value to our members from months and weeks, to days and hours — a tremendous benefit to our members.

Can you describe Premier’s activities in the following areas:

  • Environmentally responsible purchasing. Premier is a national leader in environmental purchasing with our Premier Safety Institute serving as a primary source of information and advocacy. The Institute is an integral part of the group purchasing process and assists with the identification of products and services that enhance the clinical and environmental safety and health of patients and workers. Premier is the only GPO to win the Champions for Change award from Hospitals for a Healthy Environment five times. More than 50,000 subscribers receive Premier’s free Safety Share and GreenLink electronic newsletters and our publicly accessible Safety Web site has 500,000 visitors a year.
  • Support of minority/historically underutilized businesses. Premier’s Supplier Diversity is a very robust program, helping minority-, women-, and veteran-owned and small businesses compete in the healthcare market while supporting members’ efforts to encourage supplier diversity in all its forms. Supplier diversity is fully integrated into Premier’s product evaluation process and is an essential part of every contracting decision, including the ability to search for diverse supplier products within our catalog. Premier’s diversity efforts are guided by a member Diversity Committee and led by our Senior Director of Supplier Diversity.
  • Making your members aware of – and contracting for – innovative medical technology. One of Premier’s primary goals is to bring innovation to our members as quickly as possible….Premier’s member committees are intimately involved in our sourcing process and ultimately decide which suppliers are awarded contracts. There is ongoing communication between members and our product planning staff about adding innovative medical technology to our portfolio. In addition, every Premier contract includes our breakthroughs-technology clause, which allows suppliers that have developed innovative technology to submit products for review without waiting until the next contracting cycle begins. If a product represents a significant advance in safety, clinical outcomes or operational efficiency, it is added to the appropriate portfolio.

Does Premier provide outsourced services to your members (that is, services provided by your organization, not by contract vendors)? If so, can you describe them?
Premier supports a full range of supply chain outsourcing services to members. In addition, we also support various positions on both a temporary and long term basis, including:

  • VP/director of supply chain.
  • Director of contracting.
  • Director of value analysis.
  • Contract manager.
  • Capital equipment contract manager.
  • Director of central sterile processing.
  • VP/director of quality.
  • Director of case management.

We also provide the following outsourced positions through our Informatics division:

  • Director of management engineering.
  • Director of decision support.
  • Performance engineers.

Does Premier provide onsite consulting to your members (that is, consulting provided directly by your organization, not by a contract vendor/consulting firm)? If so, can you describe these activities?
Premier Consulting Solutions (PCS) provides a full line of consulting services….Powered by vast data repositories, more than 100 subject matter experts, and seasoned healthcare consulting leadership, PCS is able to “gain buy-in” and support from all stakeholders. One of PCS’s strengths is its ability to garner physician alignment early in the engagement and maintain their support to drive value to the hospital’s bottom line. PCS provides expertise in the following areas:

  • Organizational transformation.
  • Supply chain transformation.
  • Supply chain logistics.
  • Patient throughput.
  • Clinical and regulatory areas.
  • Facilities and capital.
  • Service line solutions: cardiology, cardiothoracic, spine, orthopedic and women’s services.

Does Premier provide members with access to an electronic exchange, allowing members to order products electronically, check order status, check pricing accuracy, etc? If so, what is it called, and what are its capabilities?
Premier members order products via Premier’s Internet-based healthcare exchange, powered by Global Healthcare Exchange (GHX)….GHX also plays a valuable role in delivering Premier’s complete eCommerce solution. GHX has fully integrated the Exchange to Premier’s Supply Chain Advisor systems. Once a contract is “activated” on Supply Chain Advisor, catalog and pricing detail is sent to GHX, which integrates that information directly into a member’s MMIS. GHX also validates the “My Contract” price on every purchase order to ensure members receive the best possible price. This integration allows GHX to validate customer pricing on contract purchases, and ensures that customers realize contract savings from Premier.

Can you describe the role of member advisory boards in your contracting process?
Premier contracting decisions are made by members. Sourcing committees decide which vendors receive a Premier contract. Each committee member serves three years, allowing one-third of the committee to be selected each year. [M]embers [include] physicians, clinicians, department directors, materials managers, and other functions. Sourcing committees are: cardiovascular, continuum of care, environmental services and facilities, food service, human resources, imaging, information technology services, laboratory, materials management, national pharmacy, nursing, strategic advisory, surgical services, and women and children’s. Other committees address supplier diversity, clinical nutrition, pharmacy contracting, pharmacy medication management, pharmacy affairs, pharmacy plasma products, college and university, clinical engineering, spine, respiratory therapy, and contrast media.

To what extent does Premier assist members in local or regional contracting?
Premier provides dedicated teams of supply chain and contract specialists that are incented to help members achieve their annual supply chain savings goals. Members have access to custom contracting support, innovative total spend technology, and pricing benchmarks to maximize savings through the best combination of local, regional and national agreements. Premier contracts support our members’ ability to voluntarily aggregate purchasing volume…. In addition, Premier supports the largest number of regional group purchasing organizations and voluntary regional aggregation groups. Our technology and contracting strategies are designed to enable these organizations to maximize the value of Premier’s national portfolio in meeting the unique needs of their members.

Does Premier help members benchmark their clinical performance? If so, can you explain how?
Premier’s clinical comparative database, PerspectiveTM, is the largest in the industry; and ClinicalAdvisorTM provides clinical efficiency and quality performance benchmarking applications. Its power lies in the ability to quickly provide critical performance measurements against comparative benchmarks in the Perspective database. Perspective houses data used in the groundbreaking Premier, Medicare Hospital Quality Incentive Demonstration P4P project and in Premier’s QUEST, a collaborative involving more than 100 hospitals to improve safety and quality while reducing costs. Premier also offers the real-time Web-based SafetySurveillorTM, used by over 200 hospitals to prevent healthcare-associated infections and optimize antibiotic use, protecting patients and reducing hospital costs.

Does Premier help members benchmark their operational performance? If so, can you explain how?
Based on the Perspective database, Premier OperationsAdvisorTM is a total labor management solution that offers productivity monitoring, assessment, and comparative data so that hospitals can confidently compare operational performance against peers and national benchmarks, identify attainable performance improvement opportunities, and achieve a rapid return on investment. It is the only comparative data tool that integrates a productivity measurement system with quarterly benchmarking, a unique combination of features and services that leads to superior bottom-line results.

Does Premier offer information systems or reports to help members analyze and improve their supply chain performance (e.g., spending, contract utilization, product utilization)? If so, can you describe them?
Premier recognizes the data challenges in the hospital supply chain. We have developed a tool that not only overcomes data integrity issues, but measures all aspects of the supply chain so our members are prepared to drive significant bottom line results. SpendAdvisor is Premier’s Web-based spend analytics, benchmarking and decision-support tool used to reduce supply chain expense. SpendAdvisor’s MySpend savings dashboards highlight opportunities, so members can easily prioritize efforts and access savings. PharmacySpend uncovers savings from a variety of sources, including the ability to proactively manage participation in rebates/performance programs. SpendAdvisor is widely deployed across Premier’s membership, with demonstrated success at delivering a quick ROI.

Does Premier offer members resources to help them:

  • Control the cost or usage of physician-preference items? Opportunity calculators quickly identify contract savings. Product line benchmarking tools compare pricing, supply cost per case, product utilization and basic clinical practice across a national database so members can determine their potential opportunity improvement. Field based subject matter specialists work with members on specific opportunities and lead our CEU-accredited, on-site member clinical forums on the current market and technology. Our clinical databases on physician utilization patterns, total cost-per-case, and outcomes allow hospitals to compare internally and externally to similar organizations across the country. Lastly, Premier Consulting Solutions works with members to implement savings and deliver significant results leveraging the collective knowledge of the Premier alliance.
  • Control spending on labor? Premier’s OperationsAdvisor is the industry’s only operational analysis application that combines productivity measurement with comparative benchmarking. It links productivity to quality measures, offers productivity monitoring and assessment, and provides data to compare operational performance against national benchmarks.
  • Create and manage a vendor-credentialing process? Premier does not contract for a formal vendor credentialing program. If members choose to do this on their own, we fully support their efforts.

Can you describe the educational opportunities (meetings, conferences, webinars, on-line training) you offer your members?
Premier sponsors extensive national and regional educational events for members to expand their knowledge of the industry and share leading practices. Networking and education activities include:

  • Annual Breakthroughs Conference and Exhibition for all members to share information and learn new approaches to improving performance.
  • Governance Education Conference for CEOs and their boards.
  • CEO Leadership Forum with compelling speakers and shared leadership strategies.
  • AdvisorLive teleconference and webcast sessions.
  • Offerings for member “lines of business.”
  • Accredited continuing medical education.
  • Performance Improvement Programs and Collaboratives.
  • Performance Work Groups to drive quick results.

Has Premier’s mission changed over the past five years? If so, how?

Premier has remained committed to non-profit healthcare improvement since our creation. Our mission has been and still is to improve the health of communities through the collection and sharing of nationwide knowledge among the Premier alliance. Our long-term goals and successes will be, as they always have, measured through and by the success of our member hospitals.

Finally, how does Premier differ from others in the market?

  1. Premier’s vision is aligned with our members – improving the health of communities. We have no outside stockholders; all our value is delivered back to our owners.
  2. Premier measures its success by enabling members to drive savings and achieve top performance.
  3. Premier is the only GPO aligning employee incentives with member goals.
  4. Premier’s business model is member driven, distributing industry-leading 70-plus percent of administrative fees to owners semi-annually. Premier members that are not owners achieve savings through alignment with owner-sponsored programs.
  5. Premier maintains a 6-plus percent price advantage over other GPOs while integrating cost performance improvement with quality outcomes.
  6. Premier is the only GPO that integrates supply cost with labor cost and clinical outcomes with risk data.