Premier $100M IPO a 'Pittance'

Margaret Dick Tocknell, for HealthLeaders Media , August 28, 2013

Premier is owned by 181 hospitals, health systems, and other healthcare organizations, including Adventist Health, Catholic Health Partners, Geisinger HealthSystem, and the University of Texas MD Anderson Cancer Center. The owners will be issued Class B shares and retain voting control.

Premier also provides purchasing contracts for 2,900 hospitals, 100,000 alternate sites, and 400,000 physicians.

The IPO will include a reorganization of Premier into two divisions, one will focus on traditional supply chain activities (Premier Supply Chain Improvement) and the other on consulting and performance (Premier Healthcare Solutions).

Allegations of Kickbacks
In going public, Premier joins MedAssets as the only other major GPO that is shareholder-owned. There is bad blood between the two competitors. MedAssets has accused Premier of encouraging hospitals to join in order to participate in the IPO, which is a violation of federal anti-kickback regulations.

Premier states in the IPO prospectus that its discussions "with current and prospective member owners regarding the possibility that we would undertake an initial public offering were conducted in compliance" with the anti-kickback statutes. It concedes, however, that "no assurance can be given that enforcement authorities will agree with our assessment."

Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
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