An inside look: Premier Inc. acquires Medpricer, a purchased services procurement solution [PRO]

healthcare

Let’s take a closer look at the Premier Inc. acquisition of Medpricer announced recently. For this Spend Matters PRO brief, we talked with leaders of both firms to get further insight into the acquisition and what it means. We also offer some reasons why this development is significant for procurement practitioners.

Premier Inc., a $1.2 billion diversified healthcare improvement company, has acquired Medpricer, an innovative solution provider focused on the management of the enormous and largely unmanaged “purchased services” category of spend within hospitals and healthcare systems.

Premier bought Medpricer for $35 million and expects the acquisition to be modestly accretive in 2020. The company has stated that Medpricer will continue to operate as an independent unit and brand, and will remain GPO neutral, while augmenting Premier’s own technology and analytics capabilities. Medpricer’s CEO will continue to lead the business as part of Premier’s Supply Chain Services segment.

Headquartered in Charlotte, North Carolina, Premier describes itself as “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.” The company leverages integrated data and analytics, collaboratives, supply chain solutions, and consulting and other services to promote “better care and outcomes at a lower cost.” It also collaborates with members “to co-develop long-term innovations that reinvent and improve the way care is delivered to patients nationwide.”

“Medpricer’s spend management platform,” the company has noted, “uses artificial intelligence to validate, compare and onboard purchased services suppliers; track and measure spend by category, supplier and facility; benchmark contracts terms to ensure competitive rates; set and manage specific savings targets; and manage contract compliance.” It was also noted that purchased services — which “often fall outside the scope of national group purchasing contracts” — are estimated to “account for up to 30% of a typical healthcare provider’s non-labor expenses, and represent a total addressable acute care market of approximately $160 billion.”

Premier told Spend Matters that “Medpricer is an important component of its evolving cost management strategy and is an integral next step in our continuing expansion toward a fully integrated purchased services platform.” Premier also noted that it has the “ability to fund and materially accelerate the development of Medpricer’s offerings.”

Spend Matters recently posed some questions to Premier. We received written answers and also had an opportunity to talk with Premier’s Senior Vice President of Supply Chain, David Hargraves, and Medpricer’s President and CEO, Chris Gormley.

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