Premier’s group buy program helps hospitals to save more than $74 million in 2008

Aug 27 2009

At a time when hospital operating margins are paper thin, the Premier healthcare alliance is helping its members achieve enhanced savings through its hospital group buy program. Members who utilized the program generated savings of more than $74 million in 2008.

Premier’s group buy program delivers exceptional value through coordinated, limited-time, volume driven purchasing opportunities. Savings vary – usually between 5 and 15 percent – and the program offers value-adds such as special financing rates, trade-in programs, preventative maintenance, training, service programs and extended warranties.

In 2008, Fairview Health Services and 22 affiliates saved $1.1 million on group buys totaling $8.3 million, a 13 percent savings beyond Premier’s regular contract prices. Significantly, most of those savings accrued to smaller hospitals and critical access facilities serving rural Minnesota and Wisconsin.

“We have enjoyed our long-standing relationship with Premier. They prove their value to our organization with ongoing savings. In 2008 we experienced savings of more than $70,000 on five capital budget items. In addition, we are able to save staff resources because of the tools, reports and customer service Premier offers,” said Debora A. Kunferman, CEO and administrator at Cumberland Memorial Hospital of Cumberland, Wis., a Fairview affiliate. “Our relationship with Premier is very beneficial and worthwhile."

The program also allows smaller facilities like physician’s offices, ambulatory surgery centers, and nursing homes to achieve benefits, whether in negotiating value-adds or bottom line dollars saved.

“Premier’s group buy program is a win-win for members and suppliers,” said Mike Alkire, Premier Purchasing Partners president. “For members, the program further reduces costs on quality products and services; and for suppliers, it increases product visibility throughout the Premier alliance, amplifies their sales opportunities and expedites their sales cycle.”

Though initially developed for imaging capital equipment purchases, the group buy program has expanded to incorporate other service lines. Successful group buys have included products from lines of business such as cardiovascular, facilities/construction, foodservice, IT services, laboratory, medical/surgical, and continuum of care services. Recently, a group buy on imaging equipment resulted in $6.5 million in savings for Premier’s continuum of care members.

“Constant monitoring of member needs and the healthcare environment are essential to this valuable program. Premier is committed to offering members the right products at the right time,” said Alkire. “We want our members to have the widest variety of product and supplier choices so we can continue to help them decrease their hospital spend and improve the quality of care they provide.”