By R. Dana Barlow
New CEO Emad Rizk, M.D., strives for provider, payer, supplier integration in GPO Great Awakening.
The business world may be replete with futurist-minded leaders who think they have their fingers pressed squarely on the pulse of the industry – healthcare being no exception.
Emad Rizk, M.D., Premier Inc.’s new multifaceted CEO, President and Chairman of the Board, however, thinks that’s too limiting. Instead, he chooses to hold the pulse of the industry in the palm of his hand.
In an exclusive wide-ranging interview with The Journal of Healthcare Contracting, Rizk [pronounced E-MAHD RIZIK] links the future of Premier’s success as well as the success of healthcare operations overall to integration that extends well beyond the alphabet soup of mergers, acquisitions, information technology and blurred lines between providers, suppliers and payers, as well as clinicians and supply chain. It’s more than symbiosis. Think commonality; sharing a common playbook; administrative, clinical, financial and operational fusion.
Dr. Rizk shares his observations of and outlook for Premier, as well as how he fits into the ongoing development and growth of one of the leading group purchasing organizations (GPOs) in the nation.
JHC: Dr. Rizk, looking at your background and your extensive, varied career success to date, it looks like group purchasing is perhaps one of the few things you haven’t tried in your experience. So let me ask the overarching question. What was it that allured you to group purchasing, the group purchasing industry and a group purchasing organization (GPO)?
Dr. Rizk: Everybody in the industry makes group purchases, particularly large organizations. Any type of supply chain management requires very sophisticated data. And I have a lot of experience with data.
Perhaps the more important question, is, “Why Premier?” Well, Premier is preeminent and significantly known in the market. It has a great reputation.
As with many companies, when you’re growing, you must innovate but also integrate. It is not enough to innovate in silos. And one thing about purchasing and procurement and any type of supply chain management is this: You cannot make your decisions in a silo. These areas require a great deal of integration, especially in healthcare.
I’ve been on the payer side, the provider side and the research side, and in all cases, when you do a lot of supply chain activities, those activities are tied to critical drivers. That’s the demand side of the equation. Then, you have the outcome side of the equation. I’m very familiar with that. And to answer your original question, the reason I came to Premier is because I believe that with all three of those critical drivers, we can help our members from end to end. They don’t have to buy everything through the GPO, but we can give them a 360-degree view of how they make decisions around supply chain.
JHC: You’ve joined a significant legacy of leaders at Premier during the last quarter century, from the late former hospital association and system leader Robert O’Leary to consultant Susan DeVore to operations and technology leader Mike Alkire. With your medical background, what do you hope to contribute to this august group?
Dr. Rizk: I do follow a legacy of great leaders. We need to understand that right now, healthcare is moving toward a much more integrated approach, especially regarding data. And physicians are the main drivers of the clinical process and patient care and outcomes. They’re the ones who are ordering the supplies, such as catheters and gloves – and which gloves. They drive the ordering of medications as well as the need for nurses, other labor, surgical supplies and overall supplies at the hospital.
At Premier, we will analyze the demand-side analysis, that demand variability drives up supply cost. By combining clinical, supply chain and reimbursement analytics, we will have a comprehensive look at supply and total cost. That intersection analysis is where I believe we can take the healthcare industry and providers to the next level, by bringing three silos together.
Traditionally, supply chain leaders have been focused on getting good contracts, good supply pricing, leveraging size, etc. But now, is increased focus on the clinical side? It creates a lot of variations and demand, all of which need to be integrated. Leveraging analytics presented to clinicians can help partner to a desired outcome.
I bring that clinical perspective in terms of what true leaders will need. In the provider world right now, our members and integrated delivery systems recognize they’re facing a significant challenge. Their costs are a decade high. Pharmacy is going up over 13%. Supply chain is going up 9.9% to 10%. Labor is going up by 7%.
Meanwhile, reimbursement is coming down, and not just where the commercial payers are concerned but also the government, whether it’s managed care, Medicare or Medicaid. Medicare went up about 2.4% this year, but that’s not going to continue. At some point, it’s going to dial down. And we have a population that’s becoming increasingly more chronic with higher acuity. We’ve seen significant healthcare utilization from about two years after COVID-19 to now, increasing every year.
The cost structure is high for the United States – with about 20% of every dollar going to healthcare – totaling over $4.5 trillion, which is roughly equivalent to the GDP of some countries. And that’s just healthcare. We must begin to find efficiency, bend the cost curve, and improve quality, and there are a lot of recent technologies coming to help.
Successful health systems will be the systems that integrate their decision-making process, data analytics and the interdependencies of clinical demand, quality, and cost efficiency. It is all tied together. You cannot do one without the other two.
JHC: So, in going with your earlier statement where you’ve got to break down the silos and integrate all these decisions, are you saying that supply chain now has to think like a payer and think like a clinician? Clinical folks have to think like payers and supply chain, and payers have to think like clinicians and supply chain. How much sense does that make?
Dr. Rizk: That’s a good question. Government and commercial payers sit on a wealth of data. With longitudinal data, that’s how they put their policies together, edit claims and reimburse. So, they have an advantage because they have integrated data.
Payers have a longitudinal view of a patient over the years they’ve covered them. On the other hand, providers still have fragmentation. The [electronic medical records] in every hospital within an integrated delivery system may not be talking to each other. And if you go outside the health system, it becomes even harder to access that data, which may be stored in silos.
That said, procurement officers and supply chain officers are becoming smarter and working more closely with clinicians, statisticians and analytics teams. They’re realizing that they cannot make these decisions in a vacuum.
You asked an insightful question about the role of a payer and a provider in the future. Will providers begin to take on risk? You already have providers that own payers, with mixed results. Some have discontinued, while others have continued to thrive. Thirty to 40 million lives in this country are covered by provider-owned payers, and some of those contracts are very large.
Going forward, payers will have to begin to look at outcomes much more than just reimbursement. And providers will have to focus on quality outcomes as well as cost that is tied to reimbursement. For example, your cost-per-case can’t be $100,000 when you’re getting reimbursed at $40,000. That has a lot to do with clinical variability, and 10% of that is tied to contracting and supply chain. From pharmaceuticals to imaging, drugs to gene therapy, everything is becoming more expensive. At the core of that is supply chain management, because they’re purchasing all of it. I think you’re going to find that the healthcare industry must integrate all its segments to succeed, extending beyond pay-for-performance and embrace more value-based care.
JHC: How painful do you think that transition is going to be? Because that calls for a change in mindset amongst these three groups, something they may not be comfortable with.
Dr. Rizk: There is a trust factor that is missing today, and that is a significant piece they must overcome. Besides that, it would be great if they could at least share data. For example, a health system has its cost structure and cost accounting and all its systems to understand that cost structure. They collect clinical information, and that clinical information drives patient care across their hospital or ambulatory center. Then, they submit a claim.
On the payer side, they have some access to clinical information but need more from health systems and providers. They’re looking at that claim, which includes some clinical information, but if some clinical documentation is missing, they might not pay for the total claim or parts. They want to pay for quality. They might say, “We need you to start managing hemoglobin A1Cs more,” or “We need you to start managing post-myocardial infarctions a little bit more.” There’s a significant correlation between quality and cost, as these two factors need to be more integrated.
JHC: In addition to your clinical background, you have considerable experience in dealing with payer issues that include payment accuracy, cost management and value-based care. How will these elements influence, if not direct, your leadership of Premier as well as its group purchasing and supply chain pedigree?
Dr. Rizk: The payers have experienced years of consolidation and a great deal of system integration along with analytical integration. They’re very sophisticated in the level of data that they have and how they use it. They’re also very sophisticated in execution as well as standardization and integration.
These are new muscles that many providers are beginning to build. Providers have merged and consolidated quite a bit over the last five to 10 years. But what happens when one system merges with another that has different [electronic medical records] systems that don’t speak to each other, different [enterprise resource planning] systems, different supply chain data and different physician groups that practice differently? All of that must come together.
Premier’s data analytics is collecting data not just in the acute care setting, but also in pharmacy and the continuum of care. We also leverage our data at a cost line level and at the physician’s variation level also. Our goal is to be the preeminent partner for all health systems as they navigate what I believe will be, over the next five to 10 years, a level of crisis that we’ve not seen – especially for academic medical centers facing declining government funding.
A perfect storm is forming with these large institutions and large health systems with salaried and affiliated physician groups that cover multiple sites. There’s a variability in all of that, so we want to be that partner to help them integrate those elements. I know Premier can bring that execution on a large scale. We have moved our data into a single data lake house, and we are bringing in innovative technologies to give our customers a level of granularity that truly provides significant insight.
The supply chain intelligence is at the core and the center of it. We’re going to be comprehensive and sophisticated around contracting and purchasing and being able to get best pricing. We’re going to look at the drivers and the output on an end-to-end basis.
I know we’ll be able to bring an execution rigor that we probably have never had before. You’ll see a lot of focus, a lot of integration and an ability to truly partner with our members in a unique way. We also have an advisory group that can help guide them and implement some of the standardizations. But right now, they have too much variability, and we need to begin to standardize and execute and have a common view of data. We can’t have different systems looking at data and extrapolating different outcomes and different insights.
JHC: Those are ambitious goals. What if something threw a wrench in that mindset, such as a new
future presidential administration changing NIH funding and it starts to flow back again? Do you anticipate people saying, “well, it’s all fine now. We don’t have to continue doing what you want to do anymore.” How do you convince them to stay the course because it needs to be done this way?
Dr. Rizk: We have an aging population that continues to grow. They’re the largest consumers of healthcare. We also have an increase in chronicity – more diabetes, more COPD, higher rates of childhood obesity and continued prevalence of cardiovascular diseases. We are also seeing some introductions that are relatively scary, such as cancer in younger people. We also have healthcare access issues across geographic areas and differences in life expectancy by ZIP code.
I don’t see any of this letting up. And that will increase costs for the hospital systems and supplies that support increased utilization. Keep in mind, every time utilization goes up, supply chain becomes even more important. As costs continue to rise while reimbursements decline, strong GPOs savings will be critical.
I’m starting to think GPO stands for “group purchasing optimizer,” a performer that drives supply chain improvement with best-in-class flexible contracting. This can include leveraging AI, especially agentic AI, to leverage data and insights within these dynamic changes in pricing and tiering structures. That could have a significant impact on variability in service lines such as cardiology or orthopedics, where you’re able to negotiate implant costs more efficiently and work with physicians on outcomes that would generate improved reimbursement. With AI, you now have information to address issues at their root cause.
JHC: Do you think that clinicians – doctors and surgeons – your colleagues and peers, would listen more to AI-generated data such as this versus supply chain leaders coming in and saying, “these five docs have higher costs using the same product than these five docs so we need to figure out how to work through this.” If it comes from AI versus humans, do you think that’s going to resonate more with the clinical community or not?
Dr. Rizk: It still will come from a human. The AI works in the background, getting the data to the human. You have to leverage leadership more than ever now. You have the CEO, the CFO and the supply chain officer. But you also have a Chief Medical Officer. You have staff, VPs. You have the chair of the department. All these individuals need to be involved in bringing the cost of delivery down. The Chief Medical Officer needs to talk to the chairs, each of whom talks to his or her physicians, and then they show them data with consistent and trusted analytics.
JHC: So, the idea of consistency from AI may add more value and more trust to the data perhaps?
Dr. Rizk: Correct, and flexibility, too. Because what physicians are going to say is, “okay, I like that data, but is it acuity-adjusted? My patients are sicker.” We will show data that is risk adjusted with SDOH, when we show physicians credible data, they will adapt.
JHC: And this could almost be done instantly?
Dr. Rizk: You can do it right on the screen in front of them and add those variables in real time. Let’s put them in and see what happens. It’s conversational right now. We’re at a point where the technology is conversational – you can ask a question, and it will give you an answer.
Another thing that these agents can do now is go into multiple databases, gather data and facilitate analysis using a semantic layer that helps feed a machine-learning platform – doing in moments what might otherwise take a data scientist a week.
JHC: This seems to resemble a lot of clinical decision support software that clinicians have been using for decades to help with diagnoses, does it not?
Dr. Rizk: And that’s the beauty of Premier. We have all those tools and solutions. They work well together, but they’re not completely or seamlessly integrated in these areas. We’ve already started this, even before I came in. There has been a great deal of AI development and platform integration, and much of the data is already in a single environment as I stated before.
Now, we must focus and execute on how to help our members during these difficult headwinds. It’s not a one-size-fits-all model, but there is some modularity in how we integrate seamlessly with our members. We must analyze the demand, the priorities of the GPO and the outcome of all these activities. We can create that for members and show them the driving factors to provide the answers they need.
This is something that’s going to differentiate us in the market. You can’t look at a patient based on symptoms alone. You must consider age group, history, and multiple other factors. There are many distinct aspects to diagnosing a patient.
The cost structures for our hospital members and integrated delivery systems are complex. They’re interconnected and interdependent. It’s like a balloon – when you press one part, another expands.
Costs behave the same way. We want to integrate all this information back to our roots and enable members to use these tools to drill down as much as they want.
JHC: Supply chain leaders have weathered a reputation of being more tactical and technical rather than strategic. How can Premier help its member supply chain executives become more strategically focused once they’ve mastered the technical aspects of their roles?
Dr. Rizk: Premier works closely with supply chain leaders and truly partners with them to achieve their strategic and operational goals. I have to admit that supply chain leaders are very sophisticated now and are leveraging data more than ever.
When Premier meets with members, it usually with not just supply chain leaders; we include other C suite leaders to help achieve savings in a team approach. We will bring comprehensive data that CFOs and clinicians find valuable to achieve the organizational goals.
The supply chain leaders are sitting at the leadership table because it’s critical that they do, and they’re working with their colleagues to address these challenges. For example, I recently met with the CEO of one of the largest health systems in the country, someone I’ve known for a very long time. He told me, “you know, the supply chain leader has now moved beyond the contract negotiator. They’re much more than that. They’re no longer just getting us the best price – they know how to leverage data and are strategic in their approach.”
It’s not just about bringing down the cost of a product. We must also factor in demand, usage, variability and other supply chain data and intelligence to make decisions in a continuous, integrated process. If you decide in a silo, you’re going to generate siloed results rather than impact the entire health system, which is huge.
JHC: Do you see these developing relationships as executives pulling supply chain in or supply chain pushing its way in to integrate with these other directions or a little bit of both?
Dr. Rizk: Both.
JHC: Does it depend on the facility?
Dr. Rizk: Yes. I don’t know many CEOs now who are not intimately in communication with their supply chain officer. I’m also not sure that any supply chain officer or leader is approaching decisions or solving anything alone. No one does this. Maybe this was done a decade or so ago, but we’re in a more dynamic and expensive world now.
JHC: As a doctor leading one of the largest GPOs in the country, how do you motivate your colleagues, your fellow clinicians, to work together with supply chain management so that revenue generation, expense reduction and high-quality patient outcomes continue with minimal disruption? We always know there’s going to be disruption. We worked through the COVID-19 global pandemic. So how do you get these silos working together?
Dr. Rizk: Physicians respond the most to data. We’re scientists and data driven. We respond to data – data we can believe because it is credible. We also respond to patient outcomes, not just cost.
We must present credible and trusted data to physicians in a way that engages them. You don’t come to them and say, “This titanium screw costs too much,” or “This catheter costs too much and you have to change.” You could come to them in a transparent way and say, “You’re using catheter A, others are using catheter B, and your outcomes are the same from a quality perspective. Yet your cost is twice as high. Now, do you believe that this is something that you should continue to do?”
Many physicians have become creatures of habit. They are comfortable and were trained a certain way. You have to show them their data, so that they can work with you and align with their colleagues and peers.
JHC: We’ve heard the phrase, “show me the data” for years and yet there’s still this great gulf between the two. What I hear you saying is that it’s so logical for clinicians and supply chain to work together, looking at quality outcomes, looking at costs and that they actually can work together. Why hasn’t this happened already?
Dr. Rizk: Because we’ve never given them integrated data. We’ve given them very separate data. We’ve just said to them that when you use this supply, it costs $1,500 more. They might respond that “my patient outcomes are way better. My patients are sicker.” Then you come back and say, “We risk- adjusted the data, and now we’re comparing you to the same population, same sickness. And we’re also looking at readmission after discharge. And while your data is the same as others that are using X, you’re
using Y.” Physicians want to give their patients the best care and want the best outcome for both the patient and the institution.
But you cannot give them one piece of data versus the whole picture. You have to show them credible data that can be risk-adjusted and acuity-adjusted along with quality outcomes. That will be the differentiator. Adding the reimbursement data will bring a lot of value to the discussion. When you show them, they’re getting reimbursed the same whether they use this product or that product, they’ll see how they’re contributing to a higher out-of-pocket price for their patients.
JHC: How can you as a clinician executive emphasize the importance and value of the effective, efficient and responsible use of information technology, ranging from artificial intelligence to blockchain to robotic process automation to the adoption and implementation of universal supply data standards akin to the pharmaceutical data standards in play since the 1970s?
Dr. Rizk: That’s something that AI could help with in bringing that movement to supply data. I recently met with our entire technology department. I brought them all together to figure out exactly what we need to do. The first thing we realized is that we can’t use technology on fragmented data. We just can’t. We must figure out a way to collect and share data with all our members. Common data under a common approach. A common intake process and a unified data structure within a common database. Secondly, we need to create workflows on top of that, whether the models are semantic or on a machine-learning platform. This gives them the ability to understand all the data we have in the database.
Next, we must determine how to automate manual processes by using AI, which is only as good as the person using it with prompts, so large language modeling is key to training it to prevent hallucinations where the AI gives different answers.
At the core, our supply chain is what we do. I cannot emphasize that enough.
But we need to be completely integrated, from end to end, across all our products. We need common interoperability and common standardization and a common AI layer that will help us connect and automate as much of the manual processes as possible. This will allow our real experts to innovate, look at the data, and reach real insights for our members to use.
One of the issues that exists in healthcare right now is that no one trusts anyone’s data. That is why we need to add quality checks every step of the way.
JHC: What do you believe Premier’s toughest administrative, financial and operational challenges are to tackle right now and why? And what are some solutions for each that you hope to implement?
Dr. Rizk: We must get everybody to collaborate and to have a common playbook, common operational metrics, common execution, and transparent and accountable structures. We might need some reorganization. We do not want data and technology in separate places. We need to align the company on our vision, our mission, and our strategy, breaking down as many silos as possible.
Financially, we have to prioritize a lot of our investments and focus, frankly, on everything. We can’t be a mile wide and an inch deep. So, we are going to think about the GPO as the center. How do we give it all the intelligence that it needs? Then, all the investments are going to go into three to four areas that support it. We’re going to pick those areas.
Data is going to be one. Technology standardization is going to be one. Instead of showing five or six different tools that tell me how a specialty is performing, and another that shows how each physician within that specialty is performing, and then another that shows the cost of each supply in that specialty, I want to be able to query all of that with one tool.
We want to make sure that we automate as much as possible to reap cost and efficiency benefits. We also want to streamline our investments to four or five things, down from 10 to 15. We need to develop discipline. It is really too early to talk about any particulars right now, but this gives a high-level perspective. We are going to focus on integrated data that provides our members with actionable insights, and measure outcomes and results. We have a national database that captures about 45% of all discharges in the country. We have a great deal of data around the clinical and cost structure of our members, so we need to be able to help them right away.
From an operational perspective, I am all about execution, whether that involves implementing operational playbooks within big companies or executing turnarounds and improving process outcomes through key performance indicators. I look at processes within processes more than the 30,000-foot perspective. There’s rigor to execution. But the key here is integration. You cannot solve big problems in a silo.
About
Emad Rizk, M.D., brings more than three decades of experience leading transformation across the healthcare ecosystem. As a physician and operator, he has built and scaled organizations that translate actionable data into measurable performance improvement. Most recently, he served as Chairman, CEO and President of Cotiviti, where he led the company’s transformation into a multibillion-dollar platform supporting payment accuracy, cost management and value-based care. His work has consistently centered on helping healthcare organizations operate more efficiently while improving
outcomes for patients.
Prior to Cotiviti, Dr. Rizk served as President and CEO of R1 RCM, where he led a full operational and financial transformation of the business, significantly improving performance and positioning the company for sustained growth. Earlier, he led McKesson Health Solutions, building one of the healthcare industry’s leading analytics and technology businesses. He also served as Senior Partner and Global Director at Deloitte Consulting, where he led medical cost and quality management strategy across the healthcare sector.
Dr. Rizk has worked extensively across providers, payers, government and life sciences organizations, bringing a unique ability to align stakeholders and execute at scale. His leadership is grounded in a commitment to advancing healthcare affordability and performance through the effective use of data, technology and operational discipline.
Rizk has been recognized multiple times by a variety of media outlets and serves on the Board of Trustees of the University of Chicago Medicine. He also has held numerous advisory
and board roles across the healthcare industry.
Rizk is the author of The New Era of Healthcare: Practical Strategies for Providers and Payers and has lectured at leading academic institutions including Harvard, Wharton, MIT, Columbia and Kellogg. He earned his medical degree from Temple University School of Medicine.