The newest and largest hospital alliance greeted members last week at its first major meeting with a permanent name-Premier-as well as bold words about its future and tough talk about contract compliance.
About 1,200 hospital administrators, board members and guests gathered in Orlando, Fla., where Premier Chairman and Chief Executive Officer Robert O'Leary vowed the giant group would produce the best prices and most innovative programs.
"Our role and our responsibility now is to help reshape the American delivery system," he said.
Premier, which represents 1,700 hospitals and $10 billion in annual purchases, was formed Jan. 1. It has been operating temporarily as APS Healthcare, an acronym stemming from the names of its founders: American Healthcare Systems, Premier Health Alliance and SunHealth Alliance.
Premier will provide capital to launch a "national physician equity company" to help shareholders organize physicians, O'Leary said. In three to five years, the company, Premier Practice Management, will go public.
Plans are in development for a similar hospital company to provide an alternative to sales to for-profit hospital chains, he said.
Executives threatened to kick out hospitals that don't abide by Premier's contract compliance policy.
Premier members can't belong to another national alliance or purchasing group. They may belong to only one local group for products not contracted by Premier. And they can't use Premier contracts to drive bargains with competing vendors, said Alan Weinstein, Premier's president. Further details will be available in April, he said.
Premier is expected to cut members' annual supply expenses by at least $400 million to $500 million because of its size. Already, a new agreement for X-ray film should reduce members' spending by one-third on average. A new contrast media contract will result in savings of 25%, Weinstein said.