Premier Partnership Proposal
Jon Garrett – Vice President, Premier REACH
Rob Falk – Sr. Director, Continuum of Care
July 24, 2014
Premier Mission and Vision
Our Mission
Improve the health of communities
Our Vision
Through the collaborative power of the alliance,
we will lead the transformation to high-quality,
cost-effective healthcare
2
PROPRIETARY & CONFIDENTIAL – © 2012 PREMIER INC.
Who is Premier?
Premier is one of the nation’s largest performance
improvement alliances of approximately 3,000 U.S. hospitals
and 110,000 other providers
Premier Healthcare Alliance was built to drive member savings
and create solutions to help them succeed
Publicly traded on NASDAQ with majority ownership by 185 of
America’s leading healthcare institutions
No cost to join our utilize our GPO program
Recognized for transparency, ethics and consistent execution
Leading Food Program in the industry
3
PROPRIETARY & CONFIDENTIAL – © 2012 PREMIER INC.
Continuum of Care
100,000+
Continuum of Care
members
$8.8+ billion
in purchasing
volume
4
PROPRIETARY & CONFIDENTIAL – © 2012 PREMIER INC.
Premier Membership Divisions
Premier
Acute
Continuum of Care
Alternate Sites
Premier REACHTM
ProviderSelect: MD™
(Independent
Physician Practices)
Education
Community
Organizations
Recreation &
Hospitality
5
PROPRIETARY & CONFIDENTIAL – © 2012 PREMIER INC.
Premier REACH – A Portfolio of Purchasing Solutions
Foodservice
Office
Supplies
Laboratory
PPD
Information
Technology
Administrative
Housekeeping
6
Facilities
PROPRIETARY & CONFIDENTIAL – © 2012 PREMIER INC.
Premier Relationship Model
PREMIER ROLE
• National contracting
• Stakeholder support
• Regional contact
support
• Supplier interface
and promotions
• Standardized
marketing materials
• Contract uptake
7
Sponsor Role (MOWAA)
• New member
Introduction
• Assist with marketing
tools and resources
• Provide knowledge
based information to
share
• Identify new sourcing
opportunities for
membership
MEMBER ROLE
• Access programs and
contracts
• Share information
• Collaborate
• Network
PROPRIETARY & CONFIDENTIAL – © 2012 PREMIER INC.
Premier Contracting Practices
Member committees manage contract decisions – all
categories
Premier RFP process supports competitive bid processes
to secure best pricing and quality
Sole and multi-source contracts by category
Reverse auctions and group buys available based on
category
Three year terms with most supplier contracts
8
PROPRIETARY & CONFIDENTIAL – © 2012 PREMIER INC.
Premier Sourcing Process
7
Communication
to all members
and suppliers
6
Committee
Reviews, Votes
and Awards
5
Product
quality and
pricing
evaluations by
COMMITTEE
MEMBERS
9
1
Identify
Category For
Contracting
Sourcing
Process
By Members
For Members
2
RFI Sent to
Manufacturers
3
RFP Sent to
Manufacturers
4
Sourcing Team
analyzes
proposals to
present to
committee
PROPRIETARY & CONFIDENTIAL – © 2012 PREMIER INC.
Example – Foodservice Committees
Healthcare Committee
-24 Members-
College and University Committee
-16 MembersK-12 Sub-Committee
-12 MembersClinical Nutrition Sub-Committee
-12 Members10
PROPRIETARY & CONFIDENTIAL – © 2012 PREMIER INC.
Premier Foodservice Program
11
PROPRIETARY & CONFIDENTIAL – © 2012 PREMIER INC.
Foodservice Program Overview
National distribution
• Sole source distribution award – US Foods
• Premier and US Foods are committed to the execution of the
MOWAA program nationally through this contract and beyond
Contracted Manufacturer Agreements (CMAs)
• 3 year awards – by category
• Rotating annual calendar
• Current 215+ agreements; 95+ categories;
Value Added Tools
• MOWAA Web Portal
• CHOICE 365 - Tools/Resources
• Member education
12
PROPRIETARY & CONFIDENTIAL – © 2012 PREMIER INC.
US Foods distribution program
20 year relationship with our sole distribution partner US Foods
• Earned through sourcing process – every 5 years
Premier is US Foods’ largest customer
• Drives top commitments and contract terms
Offers the best mark-up and incentive program through US
Foods
99% Fill Rate Commitment
Commitment to stock any item a Premier member requests
with movement of 3 cs/week
Dedicated support, technology tools and more
Awarded by Foodservice Committees
13
PROPRIETARY & CONFIDENTIAL – © 2012 PREMIER INC.
Food Distribution Mark Up Parameters
Program B
Program A
Program Z
• Average Drop
Size $350 $2999
• Accounts
Payable (DSO)
45 days or
under
• Average Drop
Size $3,000 up
• Accounts
Payable (DSO)
45 days or
under
• Annual volume
of $2.0 million
within a 5 mile
radius zone
• Accounts
Payable (DSO)
45 days or
under
*AA and BB Programs available for members that choose to pay in >45 Days
(pending approval by US Foods credit)
14
PROPRIETARY & CONFIDENTIAL – © 2012 PREMIER INC.
Food Distribution Operational Incentives
15
Drop Size
Accounts
Payable
New
Business
Incentive
Direct
Parent
Incentive
PROPRIETARY & CONFIDENTIAL – © 2012 PREMIER INC.
Contracted Manufacturer Agreements (CMA’s)
3 year category contract awards
Goal to benefit all members – multiple tier levels, price
points, options that allow them to choose
Over 215 Manufacturer agreements in our portfolio today
Excess of 50,000 products under contract
Sole and multi-source contracts – to meet varying needs of
members
Savings average exceeds 15%
Today over 70% of all dollars purchased by our members
are covered by a CMA
16
PROPRIETARY & CONFIDENTIAL – © 2012 PREMIER INC.
CMA’s - How is the savings negotiated
• Deviations - Majority of CMA agreements
• Discounts applied at time of invoice – delivered cost
Savings determined at time of contracting by Premier
• Allowances – Small number of commodity contracts
• Discounts that have a % or Cents per $ off USF
Savings delivered cost
• Rebates – approximately 10% of CMA agreements
that are returned to the member quarterly
Savings • Discounts
from Premier (100% returned to member)
17
PROPRIETARY & CONFIDENTIAL – © 2012 PREMIER INC.
Value Added Support
Spring/Fall Regional
Networking Meetings
National
Breakthroughs
Conference
Culinary Clinics
Allergy Tool Kit
FARE
Online Ordering
FSDO
Business Analytics
Consolidated
Reporting
Food Safety & Quality
Assurance
Vendor Expectations
Manual
Invoice History
3rd Party Audits
Nutritionals
Industry leading recall
process
Transparency
Audit Rights
Code of Conduct
Premier Cares
Awards
Sustainable Living
2014 Champion For
Change Award
CMA & Local
Product Flags
Premier Support – Knowledge, Networking, IT Tools, QA, Transparency
18
PROPRIETARY & CONFIDENTIAL – © 2012 PREMIER INC.
Foodservice Direct Order
Complete USFood.com functionality
• Many features were built through collaboration with
Premier members
Custom page with links to key program
updates
Customized Product Information
Indicator
• CMA Product Flagging
» Highlights for new contracts
» Highlights for expiring contracts
Customized Reporting
19
PROPRIETARY & CONFIDENTIAL – © 2012 PREMIER INC.
Additional Contracts Discussion – Fee Share on all contracts
Foodservice
Office
Supplies
Laboratory
PPD
Information
Technology
Administrative
Housekeeping
20
Facilities
PROPRIETARY & CONFIDENTIAL – © 2012 PREMIER INC.
Technology Support
Web Portal
•
•
•
•
•
•
21
Online registration
Contract introductions
Education tools
Discussion boards
Testimonials
Access to Supply Chain Advisor
PROPRIETARY & CONFIDENTIAL – © 2012 PREMIER INC.
Online Enrollment Form
22
PROPRIETARY & CONFIDENTIAL – © 2012 PREMIER INC.
PremierConnectTM
23
PROPRIETARY & CONFIDENTIAL – © 2012 PREMIER INC.
Supply Chain Advisor (SCA)
Contract &
Product
Information
Activate
Pricing
24
PROPRIETARY & CONFIDENTIAL – © 2012 PREMIER INC.
PLAN
MANAGE
ANALYZE
Contract creation
& management
Supply chain management
modules
Contract opportunity
management
Supply Chain Advisor®
• Activate Premier
contracts
• Load local or regional
contracts
• Set landed cost for each
item
• Set items / pricing for
facilities within group
• Select items for use in
eProcurement
25
Procurement
Future
Accounts payable
Integration
Inventory control
•
•
•
•
Opportunity analysis
Reporting
Contract compliance
Price parity
Resident charge
PROPRIETARY & CONFIDENTIAL – © 2012 PREMIER INC.
Easy-to-use, flexible, cloud-based procure-to-pay
solution
Use one Web-based system for ordering all products
Purchase from any vendor
Manage requisitions
Access order guides
Route purchase orders for approval
Gain visibility into purchasing so you can manage to your
budget
Charge and track budgets
Track the receipt of goods, ensuring you receive what you
ordered
Works for single and multiple facility organizations
26
PROPRIETARY & CONFIDENTIAL – © 2012 PREMIER INC.
Program Execution
Dedicated Team
• Kathy Kickert – Director, Premier REACH
» Manage relationship
» Drive successful member communication
» Drive contract aggregation
» Promote and market foodservice program
» Build a customized partnership for success
• Contract Advisors
» Introduce contracts
» Promote contract at the local level
» Work with MOWAA to customize sales process to members
• Executive Support
» Alignment with our visions and values
27
PROPRIETARY & CONFIDENTIAL – © 2012 PREMIER INC.
Why Premier?
Our mission is aligned with yours – Improve the health of
communities
Proven relationship model that helps you grow
Committed team to drive success
Technology to help member experience and contract growth
Foodservice is our passion – proven success in driving
growth and member savings
Competitive sourcing process lead by members
28
PROPRIETARY & CONFIDENTIAL – © 2012 PREMIER INC.
Strategic partnerships
Premier chooses strategic partners whose visions and goals align with
our core values. Here are a few examples:
29
PROPRIETARY & CONFIDENTIAL – © 2012 PREMIER INC.