Group purchasing is a fundamental way hospitals and health systems cooperate to reduce the cost of providing health services. The Premier alliance's group purchasing program ---- the largest in the world for health care products ---- provides exceptional value.

But the need to further cut costs, while assuring high quality, is constant and compelling. Today, to meet that need and go beyond to breakthrough gains, Premier hospitals and systems have undertaken a new strategy: unprecedented commitment to the alliance's group purchasing agreements. Commitment means agreeing up front to use the group contracts negotiated by Premier (in designated areas). Premier's large pool of purchasing volume itself commands market attention. Strong commitment is the essential additional factor that commands best pricing and terms.

New strategies are required in today's environment. Supplies, pharmaceuticals, and equipment are a big percentage of the health care expense dollar ---- and one of the few remaining costs with ready potential for reduction.

Premier hospitals and systems may compete locally with the facilities and managed care offerings of large national companies that purchase on a committed basis. Or they compete with organizations that are part of other alliances and groups, each also seeking an extra edge. The costs of supplies, pharmaceuticals, and equipment can make the difference in the price competitiveness or profitability of local health services.

Manufacturers and suppliers of health care products are consolidating into larger companies (some global) and command more market power, presenting a further case for responses. At the same time, these companies feel the pressures of rising costs and falling profits.

In summary: rate pressures, competition, and a changing marketplace call out for innovation in how hospitals and health systems acquire and use supplies and other goods. Premier's commitment program, unique in its features and strength, is that bold step forward.

That is the Power of One: one voice, one direction, and one group purchasing portfolio to lead the industry with premier savings, contracts, products, terms, and discounts.

Commitment goes beyond traditional purchasing startegies. It combines large volumes, the potential to shift marketshare, and the potential to take costs out of the overall supply system for both providers and business partners (such as manufacturers and suppliers). The result: siginificant additional savings that can be passed along to providers and ultimately those that pay for health services.

With the commitment of large volumes assured, business partners are better able to manage marketing and manufacturing costs, can price their products far more aggressively, and can devote extra resources to customer service. With commitment already given to group contracts in which there is an assurance of quality and price advantages,

Premier hospitals and systems also achieve quality and efficiency benefits by focusing resources on managing the utilization and application of products. Premier is the largest alliance of hospital and health care organizations in the nation, with more than 240 owner systems that own or operate over 700 facilities. In addition, approximately 1,100 other hospitals are affiliated with the alliance. Premier's total annual group purchasing volume is approximately $10 billion, the largest group of its kind in the world. For more information about Premier, contact Prairie Health Ventures.

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