Premier, Inc. (Premier) is a technology-driven healthcare improvement company, providing solutions to healthcare providers in the United States.
The company partners with hospitals, health systems, physicians, employers, product suppliers, service providers and other healthcare providers and organizations with the common goal of improving and innovating in the clinical, financial and operational areas of their businesses to meet the demands of a rapidly evolving healthcare industry, and the com...
Premier, Inc. (Premier) is a technology-driven healthcare improvement company, providing solutions to healthcare providers in the United States.
The company partners with hospitals, health systems, physicians, employers, product suppliers, service providers and other healthcare providers and organizations with the common goal of improving and innovating in the clinical, financial and operational areas of their businesses to meet the demands of a rapidly evolving healthcare industry, and the company continues to expand its capabilities to more fully address and coordinate care improvement and standardization in the employer, payer and life sciences markets. With integrated data and analytics, collaboratives, supply chain services, consulting and other services, Premier enables healthcare providers to deliver better care and outcomes at a lower cost. The company plays a critical role in the rapidly evolving healthcare industry, collaborating with members and other customers to co-develop long-term innovative solutions that reinvent and improve the way care is delivered to patients and paid for nationwide. The company delivers value through a comprehensive technology-enabled platform that offers critical supply chain services, clinical, financial, operational and value-based care software as a service (‘SaaS’), as well as clinical and enterprise analytics licenses, consulting services, performance improvement collaborative programs, third-party administrator services, access to the company’s centers of excellence program, cost containment and wrap network and digital invoicing and payables automation processes which provide financial support services to healthcare suppliers and providers. Additionally, the company provides some of the various products and services noted above to non-healthcare businesses, including through the company’s direct sourcing activities as well as continued access to the company’s group purchasing organization (‘GPO’) programs for non-healthcare members whose contracts were sold to OMNIA Partners, LLC (‘OMNIA’).
As a healthcare alliance, the company’s mission, products and services, and long-term strategy have been developed in partnership with hospitals, health systems, physicians and other healthcare providers and organizations. This partnership-driven business model creates a relationship between the company’s members and the company that is characterized by aligned incentives and mutually beneficial collaboration. This relationship affords the company access to critical de-identified proprietary data and encourages member participation in the development and introduction of new products and services. The company’s interaction with its members provides the company additional insights into the latest challenges confronting the healthcare industry and innovative best practices that the company can share broadly across the healthcare industry, including throughout the company’s membership. This model has enabled the company to develop size and scale, data and analytics assets, expertise and customer engagement required to accelerate innovation, provide differentiated solutions and facilitate growth.
The company delivers its integrated platform of solutions that address the areas of clinical intelligence, margin improvement and value-based care through two business segments: Supply Chain Services and Performance Services. The Supply Chain Services segment includes one of the largest national healthcare GPO programs in the United States, serving acute and continuum of care sites, and providing supply chain co-management, supply chain resiliency activities, and financial support services through the company's procure-to-pay functionalities, which include digital supply chain market insights, and digital invoicing and payables automation business (also known as Remitra). Beginning in fiscal year 2025, the company's digital invoicing and payables automation business began to be reported as a component of the Supply Chain Services segment to align with the company's strategy and operations. For comparability purposes, fiscal year 2024 financial measures are presented with the digital invoicing and payables automation business as a component of Supply Chain Services. The Performance Services segment consists of the company's technology and services platform with offerings that help optimize performance in three main areas – clinical intelligence, margin improvement, and value-based care – using advanced analytics to identify improvement opportunities, consulting and managed services for clinical and operational design, and workflow solutions to hardwire sustainable change in the provider, payer, and life sciences markets.
Acquisition of IllumiCare, Inc.
On June 13, 2025, the company acquired, through its wholly owned subsidiary Premier Healthcare Solutions, Inc., 100% of the issued and outstanding capital stock in IllumiCare, Inc (IllumiCare).
Membership
The company’s membership base includes many of the country’s most progressive and forward-thinking healthcare organizations. The participation of these organizations in the company’s membership provides the company additional insights into the latest challenges confronting the industry the company serve and innovative best practices that the company can share broadly throughout the company’s membership. The company continually seeks to add new members that are at the forefront of innovation in the healthcare industry.
At June 30, 2025, the company's members included more than 4,250 acute care healthcare providers and approximately 365,000 active members. Over 520 individuals, representing approximately 180 of the company's United States hospital members, sit on 27 of the company's strategic and sourcing committees, and as part of these committees, use their industry expertise to advise on ways to improve the development, quality, and value of the company's products and services.
Business Segments
The company delivers its integrated platform of solutions that address the areas of clinical intelligence, margin improvement and value-based care and manage the company’s business through two business segments: Supply Chain Services and Performance Services.
Supply Chain Services
The Supply Chain Services segment assists the company's members and other customers in managing their non-labor expense and capital spend through a combination of products, services, and technologies, including one of the largest national healthcare GPO programs in the United States serving acute and continuum of care sites, and providing supply chain co-management, supply chain resiliency activities, and financial support services through the company's procure-to-pay functionalities, which include digital supply chain market insights, and digital invoicing and payables automation business. Membership in the company's GPO also provides access to certain supply chain-related SaaS informatics products, and the opportunity to participate in the company's ASCENDrive and SURPASS performance groups. The Supply Chain Services segment consists of the following products and solutions:
Group Purchasing: The company's portfolio of over 3,400 contracts with over 1,400 suppliers provides its members with access to a wide range of products and services, including medical and surgical products, pharmaceuticals, laboratory supplies, capital equipment, information technology, facilities and construction, and food and nutritional products. The company uses its members’ aggregate purchasing power to negotiate pricing discounts, improved quality and resiliency of products, and improved contract terms with suppliers. Contracted suppliers pay the company administrative fees based on the net negotiated price and purchase volume of goods and services sold to the company's members under the contracts the company has negotiated. The company also partners with other organizations, including regional GPOs, to extend its network base to their members.
The company's contract portfolio is designed to offer its members a flexible solution comprises multi-sourced supplier contracts, as well as pre-commitment and/or single-sourced contracts that offer higher discounts. The company's multi-sourced contracts offer pricing tiers based on purchasing volume and/or commitment and multiple suppliers for many products and services. The company's pre-commitment contracts require that a certain amount of its members commit in advance to a specified amount or percentage of purchasing volume before the company enters into a contract with a particular supplier. The company's single-source contracts are entered into with a specified supplier, and through this exclusive relationship, allow the company to contract for products that meet its members’ specifications. In the case of pre-commitment contracts, the company provides the particular supplier with a list of members that have pre-committed to a specified amount or percentage of purchasing volume, and the supplier directly handles the tracking and monitoring of fulfillment of such purchasing volume. In the case of single and multi-sourced contracts, the company negotiates and executes the contracts with suppliers on behalf of its members and makes such contracts available for its members to access. The utilization of such single and multi-sourced contracts is determined by each particular member with assistance from the company's commercial account management team. Since there are no specific fulfillment requirements needed in the company's single and multi-source contracts in order to obtain certain pricing levels, each particular member and supplier agree on the appropriate pricing tier based on expected purchasing volume, with tracking and ongoing validation of such purchasing volume provided by the supplier. The flexibility provided by the company's expansive contract portfolio allows it to effectively address the varying needs of its members and the significant number of factors that influence and dictate these needs, including overall size, service mix, and the degree of integration between hospitals in a healthcare system.
The company continually innovates its GPO programs and supply chain platforms while targeting multiple markets, including acute, continuum of care, and non-healthcare site settings. As of June 30, 2025, the company's core base is a network of more than 4,250 acute care healthcare providers. In addition, the company's continuum of care program, one of the largest in the United States, which covers over 70 classes of trade, including non-healthcare, had approximately 365,000 active members as of June 30, 2025. A number of these members in the company's continuum of care program are affiliated, owned, leased, or managed by its members.
Performance Groups: The company's Performance Groups are highly committed purchasing programs, which enable its members to benefit from coordinated purchasing decisions and maintain standardization across their facilities. The company's Performance Groups include the ASCENDrive and the SURPASS Performance Groups.
ASCENDrive Performance Group: The company's ASCENDrive Performance Group (ASCENDrive) has developed a process to aggregate purchasing data for its members, enabling such members to benefit from committed group purchases within the Performance Group. Through ASCENDrive, members receive group purchasing programs, tiers, and prices specifically negotiated for them, as well as knowledge sharing with other member participants. As of June 30, 2025, approximately 880 United States acute care sites and 7,300 continuum of care sites participated in ASCENDrive.
SURPASS Performance Group: The company's SURPASS Performance Group (SURPASS) builds upon and complements ASCENDrive and drives even greater savings for its members at a correspondingly higher level of commitment. SURPASS brings together the company's most committed members that are able to coordinate purchasing decisions, review utilization, and achieve and maintain standardization across their facilities. SURPASS utilizes the company's PACER (Partnership for the Advancement of Comparative Effectiveness Review) methodology, which brings together clinically led cohorts to make evidence-based decisions about physician and clinician preference items with the goal of materially reducing the total cost of care. As of June 30, 2025, a group of 43 members representing approximately 620 acute care sites and 9,000 continuum of care sites participate in SURPASS.
Supply Chain Co-Management: The company manages and co-manages all or portions of the supply chain operations for contracted members and other customers to drive down costs through processes, including value analysis, product standardization, strategic resource allocation, and improved operational efficiency.
Supply Chain Resiliency Program: In partnership with its members, the company has created a program designed to promote domestic and geographically diverse manufacturing and ensure a robust and resilient supply chain for essential medical products. The program is intended to provide a means to invest in or partner with businesses that can supply shortage products, co-fund the development of affordable products that address specific market needs and create strategic sourcing contracts to ensure continuous supply for the company's members and customers. The company believes this program is most successful when it is able to partner with its members through investments or long-term purchasing commitments on these initiatives.
The company’s Supply Chain Resiliency Program includes, but is not limited to, the following:
PRAM Holdings, LLC. The company formed PRAM Holdings, LLC (‘PRAM’) in 2020 in partnership with member health systems to invest in Prestige Ameritech Ltd. (‘Prestige’), a domestic manufacturer of masks, sterile intravenous solutions and other personal protective equipment (‘PPE’), whereby the company’s members obtain a direct domestic source to critical PPE.
ExPre Holdings, LLC. The company formed ExPre Holdings, LLC (‘ExPre’) in 2022 in partnership with member health systems to invest in Exela Holdings, Inc. (‘Exela’), a domestic manufacturer of proprietary and generic sterile injectable products, whereby the company’s members obtain a direct source to certain critical pharmaceutical products.
SaaS Informatics Products. Members of the company’s GPO have access to certain SaaS informatics products related to the supply chain.
Procure-to-Pay: The company's procure-to-pay business, which includes digital supply chain market insights and digital invoicing and payables automation business, provides health systems and suppliers with cost management solutions through its Procure-to-Pay technology designed to support greater efficiencies in the procurement process via automated purchasing and payment solutions. The Procure-to-Pay platform powers supplier and provider networks and uses optical character recognition to automate invoicing and payables. The company's digital invoicing and payables automation business seeks to streamline financial processes, reduce errors and fraud, unlock cost and labor efficiencies, and become a leading digital invoicing and payables platform for all of healthcare, agnostic of Enterprise Resource Planning system (ERP), GPO, or treasury partner.
Performance Services
The Performance Services segment consists of the company's technology and services platform with offerings that help optimize performance in three main areas – clinical intelligence, margin improvement, and value-based care – using advanced analytics to identify improvement opportunities, consulting and managed services for clinical and operational design, and workflow solutions to hardwire sustainable change in the provider, payer, and life sciences markets.
Technology and Services Platform: With a broad provider network, advanced analytics, and the incorporation and desired expansion of AI-powered technology backed by its large dataset, this platform has the ability to accelerate ingenuity in healthcare.
The company's technology and services platform helps optimize performance in three main areas – clinical intelligence, margin improvement, and value-based care – using advanced analytics to identify improvement opportunities, consulting services for clinical and operational design, and workflow solutions to hardwire sustainable change.
Pricing and Contracts
Supply Chain Services
GPO Programs:
The company's GPO primarily generates revenue through administrative fees received from contracted suppliers for a percentage of the net negotiated purchase price of goods and services sold to its members under negotiated supplier contracts. Pursuant to the terms of GPO participation agreements entered into by its members, the company's members receive revenue share based upon purchasing by such member’s owned, leased, managed, and affiliated facilities through the company's GPO supplier contracts.
Generally, the company's GPO participation agreements may not be terminated without penalty except for cause or in the event of a change of control of the GPO member. The GPO member can terminate the GPO participation agreement at the end of the then-current term by notifying the company of the member’s decision not to renew. The company's GPO participation agreements generally provide for liquidated damages in the event of a termination not otherwise permitted under the agreement.
In connection with its 2020 Restructuring, the company extended the terms of a majority of its GPO participation agreements, and in recent years, the company has focused on renewing these agreements as they approach the end of the 2020 extensions.
The company's GPO also generates revenue from suppliers associated with its performance groups.
Supply Chain Co-Management: In its supply chain co-management activities, the company earns revenue in the form of a service fee for services performed under the supply chain management contracts. Service fees are billed as stipulated in the contract, and revenue is recognized on a proportional performance method as services are performed. Additionally, the company has a select number of agreements with incentive fees, which are based generally on savings achievement and operational performance metrics.
Procure-to-Pay: The main source of revenue for the company's procure-to-pay business consists of fees from healthcare suppliers and providers. For fixed fee contracts, revenue is recognized in the period in which the services have been provided. For variable rate contracts, revenue is recognized as customers are invoiced after services have been provided.
Performance Services
Performance Services revenue consists of revenue generated through the company's technology and services platform. The main sources of revenue under this platform are (i) subscription agreements to the company's SaaS-based clinical intelligence, margin improvement, and value-based care products, (ii) licensing revenue, (iii) professional fees for consulting services, and (iv) other miscellaneous revenue including data licenses, annual subscriptions to the company's performance improvement collaboratives, insurance services management fees, and commissions from endorsed commercial insurance programs.
SaaS-based clinical analytics products subscriptions include the right to access the company's proprietary hosted technology on a SaaS basis, training, and member support to deliver improvements in cost management, margin improvement, quality and safety, value-based care, and provider analytics. Pricing varies by application and size of the healthcare system. Clinical analytics products subscriptions are generally three- to five-year agreements with automatic renewal clauses and annual price escalators that typically do not allow for early termination. These agreements do not allow for physical possession of the software. Subscription fees are typically billed on a monthly basis, and revenue is recognized as a single deliverable on a straight-line basis over the remaining contractual period following implementation. Implementation involves the completion of data preparation services that are unique to each member's data set in order to access and transfer member data into the company's hosted SaaS-based clinical analytics products. Implementation is generally 60 to 240 days following contract execution before the SaaS-based clinical analytics products can be fully utilized by the member.
Enterprise analytics licenses include term licenses that generally range from three to ten years and offer clinical analytics products, improvements in cost management, quality and safety, value-based care, and provider analytics. Pricing varies by application and size of the healthcare system. Revenue on licensing is recognized upon delivery of the software code, and revenue from hosting and maintenance is recognized ratably over the life of the contract.
Consulting services are provided under contracts whose terms vary according to the specific nature of each engagement. These services typically include general consulting, report-based consulting, managed services, and margin improvement initiatives. Fees are billed as stipulated in the contract, and revenue is recognized on a proportional performance method as services are performed or when deliverables are provided.
Other miscellaneous revenue generated through the company's technology and services platform includes revenue from data licenses, which provide customers with data from the healthcare database and is recognized upon delivery of the data; revenue from performance improvement collaboratives that support the company's offerings in cost management, quality and safety, and value-based care, which is recognized over the service period as the services are provided, generally one to three years; and revenue through insurance services management fees, which are recognized in the period in which related services are provided. Additionally, commissions from endorsed commercial insurance programs are earned by acting as an intermediary in the placement of effective insurance policies and are recognized at a point in time on the effective date of the associated policies when control of the policy transfers to the customer and are constrained for estimated early terminations.
Revenue Concentration
The company's customers consist of its GPO suppliers and both GPO and non-GPO members that utilize its other products and services, as well as other healthcare and non-healthcare businesses. The company's top five customers accounted for 12% of its consolidated net revenues for the years ended June 30, 2025.
Competition
The company’s group purchasing business competes with other large GPOs such as HealthTrust Purchasing Group (a subsidiary of HCA Holdings, Inc.), Managed Health Care Associates, Inc. and Vizient, Inc. In addition, the company competes against certain healthcare provider-owned GPOs and online retailers in this segment.
The company’s supply chain co-management business competes with organizations that provide supply chain outsourcing or embedded resources and supply chain transformation services, such as The Resource Group and CPS Solutions, LLC.
The company's procure-to-pay business competes with organizations such as Global Healthcare Exchange, LLC (GHX) for its digital invoicing product, Coupa Software Inc. and Taulia for its digital payables product, and tier one treasury banks (e.g., JPMorgan Chase and Co., Wells Fargo, Bank of America, etc.) as well as niche factoring companies for its financing solutions product.
The company's Performance Services segment's competitors compete with its technology and services platform.
The primary competitors of the company's technology and services platform range from smaller niche companies to large, well-financed, and technologically sophisticated entities. The company's primary competitors include (i) information technology providers such as Veradigm, Inc. (f/k/a Allscripts Healthcare Solutions, Inc.), Epic Systems Corporation, Health Catalyst, Inc., IBM Corporation, Infor, Inc., Oracle Corporation, Arcadia Solutions, LLC, Vizient, Inc., and Innovaccer, Inc., and (ii) consulting and outsourcing firms such as Deloitte Consulting, Evolent Health, Inc., Huron Consulting, Inc., Guidehouse Consulting, Inc., Optum, Inc. (a subsidiary of UnitedHealth Group, Inc.), and Kaufman, Hall and Associates, LLC (a subsidiary of Vizient, Inc.).
Government Regulation
The company operates its group purchasing services, pricing discount arrangements with suppliers, and revenue share arrangements with applicable members in reliance on the safe harbor for GPOs set forth at 42 C.F.R. § 1001.952(j) and the discount safe harbor set forth at 42 C.F.R. § 1001.952(h).
The company’s self-funded health benefit plan for the company’s employees and the company’s healthcare provider members (provided that these members engage in HIPAA-defined standard electronic transactions with health plans, which will be all or the vast majority) are directly regulated by the Health Insurance Portability and Accountability Act of 1996 (HIPAA) as ‘covered entities’.
The company has two products that are certified as Health IT Modules. To retain the company’s certification, the company must: 1) meet applicable conditions of certification and maintenance of certification requirements established by ONC; 2) pass testing conducted by an ONC-Authorized Testing Laboratory pursuant to test procedures developed by ONC; and 3) obtain certification from an ONC-Authorized Certification Body. ONC’s conditions of certification and maintenance of certification requirements include communication restrictions that largely prevent the company from limiting the company’s customer's ability to communicate about the usability, interoperability, security or user experiences relating to the company’s Health IT Modules. These regulations require the company to review and modify current contract terms or inform customers that offending contract terms the company previously entered into are no longer effective. The company is also required to develop and execute a real-world testing plan, which would require the company to demonstrate to the company’s ONC-Authorized Certification Body that the company’s Health IT Modules operate as designed when implemented in the field. Failure to properly implement these requirements could result in the company’s two products losing their status as Health IT Modules, which could jeopardize the utility of the products for the company’s customers. The company works closely with its selected ONC-Authorized Testing Laboratory and ONC-Authorized Certification Body to meet these and other requirements of Health IT Certification Program. The company is unable to predict what changes to the certification program might be made in the future or how those changes could affect the company’s business or the associated costs of compliance.
Many of the clients the company serves sponsor employer group health plans, which are subject to the Employee Retirement Income Security Act of 1974, as amended (‘ERISA’), the Internal Revenue Code, the ACA, Medicare Secondary Payer statutes, HIPAA privacy, state insurance laws in some cases, and other laws and regulations governing group health plans. While compliance with these laws and regulations governing group health plans is the responsibility of the employer that sponsors the health plan, in some cases, the employer may delegate certain health plan functions to a vendor, such as the company. The company protects itself from liability for these client health plans by virtue of contractual provisions insulating the company from exposure and responsibility for the employer-plan sponsor's legal obligations.
History
Premier, Inc. was incorporated in Delaware in 2013.
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