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November 05, 2020 12:10 PM

Vizient to purchase Intalere from Intermountain

Alex Kacik
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    Vizient will purchase the group purchasing organization Intalere from Intermountain Healthcare, the organizations announced Thursday.

    The acquisition comes with a commitment from Intermountain to use Vizient's group purchasing portfolio; the Salt Lake City-based integrated system already uses Vizient's cost and quality analytic tools. Although Intalere only accounts for around $6 billion in annual purchasing volume across its some 100,000 members compared to Vizient's $100 billion, half are in the non-acute space, where there is opportunity for growth, Vizient CEO Byron Jobe said.

    "They have a very robust non-acute business," Jobe told Modern Healthcare, adding that this deal will build on Vizient's current 20% non-acute market share and allow it to leverage its purchasing power for home care agencies, physician offices, long-term care facilities, ambulatory surgery centers and other non-acute facilities. "We've invested in cost-management enterprise resource planning platforms for ASCs, for instance, along with other consultative and data analytics solutions as our members continue to invest in integrated delivery systems, which include more and more ambulatory and fewer inpatient facilities."

    Intermountain, which purchased what was formerly Amerinet in mid-2015, said the sale aligns with its population health strategy "by providing value-based care and services to an increasing number of patients, families and communities," the system's chief financial officer Bert Zimmerli said. More large systems are standardizing supply chain purchases that marry cost and quality efficiencies, which can give them a competitive edge, executives said.

    The deal is expected to close in the first quarter of next year, executives said, declining to disclose the purchase price. Jobe said he doesn't expect many issues with the antitrust review, and that the organizations haven't formalized integration strategies around staffing and other potential overlap.

    The supply chain for smaller clinics, surgery centers and other non-acute facilities is relatively fragmented, he said.

    "The type of supplies and support a home care agency needs versus an ASC is different, so you have to orient your service models differently," said Jobe, comparing it more of a business-to-consumer than a business-to-business approach. "Those organizations can benefit immensely from the scale a GPO brings."

    The COVID-19 pandemic has reinforced the need for visibility and transparency across the supply chain, Jobe said. Vizient has tracked where personal protective equipment and pharmaceuticals are developed, asking manufacturers to disclose where their raw materials and finished products are coming from in their efforts to diversify and fortify the supply chain, he said.

    Vizient is also securing a six-month guarantee of products from more of the manufacturers it works with, which has helped mitigate shortages, Jobe said. While the transaction doesn't involve Civica Rx, a generic drug company launched by a group of hospital systems including Intermountain, Civica and Vizient's Novaplus program have many parallels, executives said.

    "We encourage legislative changes that would not only require drug manufacturers to disclose where their active pharmaceutical ingredients are sourced from, but other ways to address supply chain resiliency," Jobe said.

    The events of 2020 have put an even greater emphasis on health disparities. Attend Modern Healthcare's virtual event on December 8 to harness the knowledge and tools needed to address the social determinants of health. Read more and register at ModernHealthcare.com/SDH.

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