Premier today promised it would lead the way into new ethical territory as it released results of its six-month study on best ethical practices for the group purchasing industry.
Public disclosure of Premier's finances, standardized administrative fees and a sweeping conflicts-of-interest policy encompassing all of the alliance's employees are the three recommendations with the greatest potential to change the industry.
Commissioned last spring, the 21-page report recommends 50 policies and practices that Premier said it would move quickly to implement. Premier's management and board are committed to implementing all of the recommendations according to a plan and timetable, officials said in a written statement. Many of the recommendations are in place already or were committed to this summer.
"It's a very far-reaching set of recommendations and standards," Premier Chairman and CEO Richard Norling told Modern Healthcare's Daily Dose. "I like to think of it as a stake in the high ground."
Since March, when the study was commissioned, Premier has been in the spotlight of public scrutiny of industry practices. The interest of the Senate Judiciary antitrust committee, which held a hearing on industry practices in April, spawned several federal investigations in recent months. In August, Premier and its biggest competitor, Novation, reached separate but very different accords with the subcommittee; insiders widely agree that Premier made the biggest concessions.
The latest recommendations go further. By agreeing to standardize its fundamental source of revenue -- administrative fees -- Premier has eliminated a contract negotiating tool that could serve its self-interests rather than its members' interests. The move assures that in the future contracts will be awarded purely on product quality and price, Norling said.
In implementing the recommendations, Premier would hold itself to the same financial disclosure rules that apply to its member not-for-profit hospitals.
Norling said he fully expects to implement the recommendations without loss of revenue. "We've grown revenue every single year, and I see no reason not to continue doing that," he said. "A lot of (people in the industry) are making a lot of noise that (the new ethical practices) will hurt Premier economically, but we don't see it."
The study was conducted by business ethicist Kirk Hanson, executive director of the Markkula Center for Applied Ethics at Santa Clara University, California. Premier's charge to Hanson was to set a high ethical bar.
Click here for the full report or go to www.premierinc.com.