Premier serves more than 2,000 hospitals in the United States and more than 53,000 healthcare sites.

Premier Business Partners:

Stryker Instruments

Although some may recognize it as a group purchasing organization, the value of the Premier healthcare alliance extends well beyond materials management. “Group purchasing is a significant function of our business, but it’s only one of multiple services that we offer our alliance member hospitals,” declares Mike Alkire, president of Premier Purchasing Partners.

“Our membership also benefits from the ability to benchmark with their peers, sharing data metrics and evidence-based research to improve the quality of care they offer their patients while reducing hospital costs,” he says. “We truly operate as a healthcare alliance.”    

Based in San Diego, Premier serves more than 2,000 hospitals in the United States and more than 53,000 healthcare sites throughout its purchasing, Healthcare Informatics and hospital professional liability risk-retention divisions.   

Alkire says Premier has become a leader by focusing on the reduction of hospital costs and the improvement of care through the use of evidence-based clinical information. “The cost and quality improvement aspects of our alliance really go hand-in-hand and have served as a great complement to one another, as well as a strong differentiator,” he says. “We are able to provide our members a combination of services that others within the industry simply can’t.”   

For instance, his Purchasing Partners unit provides alliance members with pricing for supplies and services “at market-leading prices,” Alkire says. “Purchasing Partners also provides support for member supply chain improvement efforts with collaborative projects and expertise in such areas as cardiovascular, orthopedic and oncology service lines; OR and ER throughput; and other non-labor expense reduction.”   

Premier’s Healthcare Informatics division specializes in quality improvement through benchmarking, reporting analysis and real-time surveillance of clinical, safety, financial, operational, labor productivity and supply data. The division is powered by Perspective, the largest integrated clinical, financial and operational comparative database in the nation.    

Federal groups, including the Centers for Medicare & Medicaid Services (CMS) and FDA, have extracted information from Premier’s Perspective database to assist with their quality improvement endeavors.    

In addition, the company’s Safety Institute provides information and tools that improve patient, worker and environmental safety. Gina Pugliese, RN, MS, vice president of Premier’s Safety Institute, adds that the Institute’s Web site enjoys 500,000 visits annually. “Premier is the only organization that has tied in safety of the patient, [the] worker and the environment all together,” she says. “We’ve been very pleased that the information we provide is used so widely by the healthcare community to improve patient care.”

The Costs of Care
Premier’s efforts to improve the quality of care include the Hospital Quality Incentive Demonstration (HQID) pay-for-performance project. Launched in 2003, HQID is a partnership between Premier and the CMS.   

According to Premier, the project is designed to determine whether economic incentives for hospitals affect the quality of care. More than 250 hospitals are participating in the project, which will continue beyond 2009.   

In June, Premier reported that the hospitals raised the quality of care by an average of 15.8 percent during the project’s first three years. This was based on the delivery of 30 nationally standardized and accepted care measures to patients.    

According to an analysis of mortality rates at hospitals participating in the project, the improvements resulted in the hospitals saving the lives of approximately 2,500 heart attack patients.    

“It’s been dramatic what a project like that has been able to do,” Pugliese says.    

CMS has awarded more than $24.5 million to the top-performing hospitals over the project’s first three years.    

This year, Premier released an analysis of the project suggesting that, if hospitals nationally achieved the three-year cost and mortality improvements found among the HQID participants, they could save approximately 70,000 patients annually and reduce costs by more than $4.5 billion annually.   

“Some in the healthcare industry question whether higher-quality care costs more,” Pugliese admits. “What we found was that higher quality care actually costs less.”   

“Our work with hundreds of hospitals across the nation provides evidence of how the U.S. healthcare system is showing improvements and patients are getting higher quality healthcare,” Premier president and CEO Richard Norling said in a statement. “The findings from this analysis clearly suggest that, through the reliable delivery of basic care processes, improving clinical quality and safely reducing costs is attainable for all hospitals across the country.”

Taking the Initiative
Premier focuses strongly on environmental initiatives, Pugliese says. Through its award-winning GreenHealthy program, the company has stressed environmentally preferable purchasing with the selection of products based on their composition, packaging and environmental impacts.
    

Premier also has launched the SPHERE program (Securing Proven Healthcare Energy Reduction (for the) Ecosystem), which is focused on “helping hospitals reduce their energy use and cost, and ultimately their carbon footprint through increasing their use of renewable energy from renewable resources,” Pugliese explains. “[We’ve] made wonderful strides.”   

For instance, the Chicago-based Ingalls Health System saw an estimated 3,433-ton reduction of carbon dioxide when it purchased five percent of its electricity from renewable energy sources.    

The system also saved an overall $840,000 in their purchase of tradition and renewable energy and natural gas.   

Ingalls achieved these savings by participating in a large-scale reverse auction. Through this reverse auction, the roles of buyer and seller are reversed, with energy suppliers bidding downward against each other to reduce their prices, Pugliese says.   

“Through the reverse auction process, we were able to include electric energy, produced from renewable resources, in our purchase and do so at a cost competitive level with conventionally produced electricity,” Ingalls’ Director of Materials Management Harold Richards explained in a statement.    

“This is an important objective of our overall strategy by reducing our carbon footprint and making a positive contribution to public health.”  

With its purchase of 5 percent of its energy from renewable resources, Premier says Ingalls surpasses the current Renewable Portfolio Standard bill in the state of Illinois, requiring utilities to supply 2 percent of their power from renewable energy resources. With SPHERE, the company says Ingalls will be one of the first healthcare facilities in the state to reach 7 percent green by May 2009.   

As Premier continues to serve its members, Alkire says, the work of all Premier employees will be critical.    

“As always, we will utilize the expertise and knowledge of our membership, as well as our internal expertise, to ensure we’re creating programs to assist our hospitals.”