Premier (PINC) Enters Extended, Expanded Partnership with Banner Health

October 5, 2016 8:29 AM EDT

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Banner Health has extended and expanded its partnership with Premier Inc. (Nasdaq: PINC). The five-year agreement extends Banner’s use of Premier’s group purchasing organization (GPO) and expands the partnership to integrate supply chain and practice management insights across its organization, as well as engages Banner’s Colorado market in Premier’s population health management collaborative.

Headquartered in Arizona, Banner owns and operates 29 hospitals and various other providers across seven states, as well as insurance services in its Arizona market. The health system has worked with Premier for more than 15 years, leveraging its supply chain and performance services to align cost management with quality improvement. In doing so, Banner has documented a savings of $120 million since June 2013 coupled with improvements in care delivery.

“Banner works strategically with Premier to accelerate the transformation of healthcare,” said Dennis Dahlen, Banner’s chief financial officer. “By continuing and expanding our partnership, we will have the outcomes-based data management capabilities necessary for full visibility into clinical and supply chain practices across our network. We’re also working with Premier to further build value-based care and alternative payment model capabilities. Premier is a valuable partner with years of experience, and they continue to help us develop, implement and design processes for our providers to succeed in improving health across our communities.”

Powered by the cloud-based PremierConnect® performance improvement platform, Premier’s supply and physician practice management analytics will be deployed across Banner’s newly-acquired southern Arizona facilities to analyze spend and identify operational opportunities through the continuum of care. These analytics complement access to Premier’s GPO, as well as existing PremierConnect clinical and operational analytics. Integrating this information unifies system-wide purchasing activities and care delivery practices to drive efficiencies, eliminate variation and improve outcomes. PremierConnect houses clinical data on 40 percent of the patients discharged from U.S. hospitals and $48 billion in annual purchasing information. Providers use this information to compare cost and quality outcomes with peers for evidence-based decisions.

Additionally, the Banner Health Network, Banner’s accountable care organization, has expanded its participation in Premier’s population health management collaborative. While its Phoenix market has been a participant since 2011, Banner’s Colorado market now joins the collaborative to leverage nationally recognized insights that support the implementation of population health management capabilities. This includes developing clinically integrated networks and alternative payment models, such as risk-based shared savings and bundled payment.

“Healthcare’s transitioning landscape demands a new focus on total cost management and a single source of truth that breaks down the silos,” said Susan DeVore, president and CEO of Premier. “Banner has been essential in developing integrated solutions that are proven to improve outcomes and costs, and is creating mature payment models to improve the health status of its communities. We look forward to continuing our work with Banner as we scale solutions across our alliance to further improve patient care and build a healthier society.”

The financial terms of the agreement were not disclosed. Premier management briefly noted the expanded agreement with Banner during its fiscal fourth-quarter conference call with investors on August 22, 2016.

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