Premier’s Business Model Paying Dividends with CommonSpirit Agreement

Premier Inc. (Premier) is a leading healthcare improvement company, uniting an alliance of more than 4,000 U.S. hospitals and health systems and approximately 175,000 other providers and organizations to transform healthcare.

Premier’s business model for both supply chain and Performance Services is driven by differentiated, comprehensive data analytics and services, which enables the company to deliver a unique, integrated total value proposition customized for each member.

Although group purchasing organization (GPO) switching is not common in the industry, this business model continues to help Premier retain and grow its business, the company has averaged in the mid- to high 90% customer retention range over the last decade.

Premier works together with members to expand initiatives designed to deliver more supply chain savings. These include:

  • Launching its new e-commerce platform, stockd.
  • Implementing the ProvideGx drug shortage program.
  • Leveraging new opportunities in the area of purchased services through its recent purchase of Medpricer, which provides technology solutions that enable hospitals and other health care providers to analyze, benchmark and source purchased services contracts independent of any existing GPO affiliation.
  • Expand the high-compliance purchasing programs.
  • Expand the portfolio in its two most highly-committed programs, SURPASS and ASCEND.

Premier’s initiatives helped Premier to solidify a partnership with CommonSpirit Health to achieve operational excellence as it undergoes the integration of its newly-merged health system, which was formed through the alignment of Catholic Health Initiatives (CHI) and Dignity Health in February 2019.

CommonSpirit Health will be fully converting to Premier’s GPO and will leverage Premier technology and a focused team of experts to strengthen and accelerate the execution of a clinically integrated supply chain.

With approximately 150,000 employees and 25,000 physicians and advanced practice clinicians, CommonSpirit Health operates 137 hospitals and more than 700 care sites across 21 states.


Takeaway: Premier has averaged in the mid- to high 90% customer retention range over the last decade.