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Premier Selected to Continue Partnership with GNYHA Under New Agreement Offering Hospitals Greater Choices in Group Purchasing

Premier Is Chosen After Rigorous, Independent Evaluation Of Competing Proposals From Leading GPOs Conducted By Giuliani Partners 

Participating Hospitals Will Be Able To Combine The Benefits Of Low National Pricing With Flexibility of Regional Contracting

March 15, 2004, San Diego, CA. Premier Inc. announced today that Premier Purchasing Partners, L.P., has signed a new seven-year contract with GNYHA Services, an affiliate of GNYHA Ventures and  Greater New York Hospital Association (GNYHA), for group purchasing of medical/surgical and pharmaceutical supplies on behalf of more than 100 not-for-profit hospitals throughout the New York and New Jersey area.  The annual purchasing volume of the hospitals in the New York/New Jersey area that currently purchase through GNYHA Services is approximately $2 billion. 

The selection of Premier was based on the recommendation of Giuliani Partners, LLC, the consulting firm headed by former New York City Mayor Rudolph W. Giuliani, which conducted a rigorous, five-month-long evaluation of competing proposals by Premier and other leading group purchasing organizations (GPOs). An independent evaluation committee composed of New York and New Jersey hospital executives also recommended that GNYHA choose Premier as its business partner.

Rudolph Giuliani said, “"In the current market place, selecting the appropriate GPO is a critical element to the future ability of not-for-profit hospitals to survive and provide needed care to communities throughout the region.  We approached this assignment with the greatest care, applying objective criteria to detailed proposals and drawing on all of our extensive experience to give GNYHA a clear picture of the capabilities of each of the GPOs that participated.  After a thorough and fair evaluation, we were certain that one GPO stood out from the rest, and we recommended Premier as the best choice."” 

Premier's business model and technology advantages were important factors in the evaluation process, said Susan DeVore, President of Premier Purchasing Partners. 

“"We are thrilled to have the opportunity to continue our partnership with GNHYA through a groundbreaking new agreement that is fully aligned with Premier's mission to provide the best economic value to our member hospitals,"” DeVore said. “"This agreement better empowers hospitals to deliver quality care to patients in a more cost-efficient manner. It underscores our commitment to leadership within the GPO industry and our willingness to work closely with our members to help them overcome the significant challenges they face.” 

Richard A. Norling, Premier's president and CEO, said the new agreement demonstrates Premier's continued leadership in developing innovative was to deliver value to its member hospitals. 

“"As we continue our partnership with GNYHA, we are moving to create a more competitive marketplace for medical supplies and equipment,"” Norling said. “"We are working to ensure that all of our Premier owners, and the hospitals they represent, will have an even wider range of choices of the best technologies and the best values."  

Under the new agreement, the not-for-profit hospitals affiliated with GNYHA will have enhanced regional flexibility in both pricing and contracting. Hospitals will be able to utilize national contracts Premier has negotiated on a multi-source basis, offering low national prices.  At the same time, they will be able to pool their own purchasing power on a regional basis to procure additional savings. 

Lee H. Perlman, President of GNYHA Ventures, said, “"The benefits of partnering with Premier, a major national GPO that has a superior ability to deliver cost savings, coupled with the advantages of regional pricing and contracting flexibility is a ‘"win-win" situation for hospitals.  We believe strongly that our new partnership with Premier will empower the not-for-profit hospital community, giving them more choices and creating a better equilibrium and better opportunities with the large, national for-profit suppliers.  In addition, Premier's ‘"total spend management" technology enables hospitals to more effectively target supply cost savings opportunities and ensure pricing accuracy.” 

In the evaluation process, both Giuliani Partners and an independent committee of executives from GNYHA hospitals reviewed detailed proposals submitted by competing GPOs, met with key staff at each GPO, and conducted focus groups with hospital purchasing executives to better understand their purchasing needs and priorities.  Giuliani Partners and the independent committee used these key objective criteria to analyze and evaluate the submissions:  

• A GPO's ability to deliver the lowest prices from medical suppliers;
• The ability to secure contracts with suppliers of the highest-quality products;
• The willingness to enter an agreement with GNYHA that allows flexible regional contracting and pricing, when appropriate;
• The use of technology to allow hospitals to access “"real-time"” pricing information to ensure that they always secure the very lowest and most up-to-date contract price;
• The ability to quickly add innovative products and new technologies to its portfolio of products available to hospitals through group contracts;
• The GPO's overall financial strength, ensuring that the company has the resources to adapt to an ever-changing marketplace; and
• A commitment to a strong code of conduct, governing the GPO's approach to purchasing.

Premier's Norling said, “"Giuliani Partners assessed Premier in terms of the value we could provide to hospitals in New York and New Jersey, and, after a thorough and objective evaluation, determined that we would bring the best value to the table."

"Through this innovative partnership with Premier, we will be able to respond more effectively to the significant challenges facing our hospitals,"” said GNYHA President Kenneth E. Raske.  “"Our goal in this process has been to select the best business partner to help the not-for-profit and public hospitals in the Greater New York area reduce their medical supply costs and continue to improve the quality of care.  Reducing supply costs is critically important because today metropolitan-area hospitals are in serious financial distress.  They have suffered four straight years of bottom-line losses and are caught in a squeeze between revenue cuts by government and private sector insurers and sharply rising costs."

GNYHA Services has offered group purchasing services in the metropolitan area since the 1970s.  In 1996, GNYHA Services signed a seven-year contract for a purchasing arrangement with Premier Purchasing Partners.  That contract expires in June 2004.  In October 2003, GNYHA Services began the process of selecting a group purchasing partner for 2004 and beyond, retained Giuliani Partners to oversee the evaluation process, and established a separate committee of hospital executives to make an independent recommendation.  In late February 2004, Giuliani Partners, as well as the separate evaluation committee, made independent recommendations to the GNYHA Services Board of Directors that GNYHA Services should select Premier as its group purchasing partner for 2004 and beyond.  The contract between GNYHA Services and Premier Purchasing Partners was signed on Friday, March 12, 2004.

About GNYHA Ventures
GNYHA Ventures, a business subsidiary of the Greater New York Hospital Association (GNYHA), manages an array of health care services, consulting, and group purchasing programs.  GNYHA is a trade association that was founded in 1904 and currently represents more than 250 not-for-profit hospitals and continuing care facilities, both voluntary and public, in the metropolitan New York area and throughout the State, as well as in New Jersey, Connecticut, and Rhode Island. The purpose of GNYHA is to act as the principal advocate for its members in improving the access to, as well as the quality and cost of, health care, and to foster an appropriate environment for the management of health care resources.

About Premier
Premier, Inc., is a strategic alliance in U.S. healthcare, entirely owned by more than 200 of the nation's leading hospital and healthcare systems. These systems operate or are affiliated with nearly 1,500 hospital facilities and hundreds of other healthcare sites. Premier provides an array of resources supporting health services delivery including group purchasing for more than $17 billion annually in supplies and equipment. Other resources offered by Premier are supply chain and clinical performance improvement services and insurance programs. Headquartered in San Diego, CA, Premier has other major facilities in Chicago, IL; Charlotte, NC; and Washington, DC.

About Giuliani Partners 
Giuliani Partners is a consulting firm formed by former New York City Mayor Rudolph W. Giuliani and a number of his senior executives from his eight-year tenure. Giuliani Partners assists chief executive officers in securing the future of their firms by protecting their knowledge, financial and physical assets, their people and their brand.

With Mr. Giuliani as Chairman and CEO, the firm draws upon its experience and expertise in innovative financial management, public safety, security, emergency preparedness, business continuity and leadership during crises. This team includes former Corporation Counsel Michael Hess, New York City's former Police Commissioner Bernard Kerik, former Fire Commissioner Thomas Von Essen, former Office of Emergency Management Commissioner Richard Sheirer, former Vice Chairman of Ernst & Young LLP Steven Oesterle, as well as other former city officials. Giuliani Partners provides clients with a comprehensive set of solutions addressing critical concerns of major corporations today.

Contacts:

Elizabeth Mather (646) 805-2008
Gina Clark (205) 837-0877
Mary Johnson (GNYHA) (212) 506-5423
Sunny Mindel (Giuliani Partners) (212) 931-7392