Prisma Health Achieves $450M in Savings with Fully Integrated Systemwide Transformation

Key Takeaways:

• Facing challenges in the aftermath of the COVID-19 pandemic, Prisma Health was looking to improve enterprise operations and support continued high-quality care for the patients and communities it serves.
• Premier’s embedded advisory team helped Prisma Health implement customized strategies and integrate technology and data-driven solutions to enhance performance and outcomes.
• Prisma Health achieved $450 million in savings over three years, streamlined enterprise operations and built a sustainable framework for long-term improvement and success.

As South Carolina’s largest healthcare provider, Prisma Health is no stranger to complex challenges. With 18 hospitals, nearly 30,000 team members and over 1.5 million unique patients relying on its care annually, Prisma has always worked to balance operational efficiency with its mission to improve community health. However, the COVID-19 pandemic presented pressures unlike any before—financial instability, supply chain disruptions and the need to unify a system still adapting to a merger from years prior.

The organization’s leadership knew that solving these challenges required more than incremental changes. They needed a partner who could bring forward innovative, sustainable solutions – and the expertise to help implement them at scale.

In January 2022, Premier emerged as the clear partner of choice, offering a unique combination of expert advisory services, advanced technology and a leading group purchasing organization (GPO) contract portfolio.

“This wasn’t just about stabilizing finances,” said Clarence Sevillian, Prisma Health’s Executive Vice President and Chief Operating Officer. “It was about building a stronger, more efficient system that would allow us to continue delivering exceptional care in every community we serve.”

Laying the Groundwork: Strategic Assessment and Planning

The partnership aimed to achieve $450 million in value improvement over six years through supply chain optimization, clinical alignment and enhancing overall efficiency. Prisma Health exceeded expectations, achieving its $450 million margin improvement goal in just three years.

From the outset, Premier’s advisory services team became an integral part of Prisma Health’s operations, embedding three GPO-dedicated staff within the organization and leveraging the experience of dozens of Premier consultants and subject matter experts to collaborate directly with leaders and staff. This hands-on approach ensured that every initiative was tailored to Prisma Health’s specific goals and needs – and aligned with its mission.

“Premier’s team didn’t come in as outsiders—they became part of our culture,” Sevillian said. “They were invested in our success and partnered with us to help us achieve our goals.”

The work began with a comprehensive, enterprise-wide assessment of Prisma Health’s operational landscape. Premier advisors evaluated clinical workflows, supply chain governance, and workforce structures and processes to identify inefficiencies and improvement opportunities. From this deep dive, the team developed actionable roadmaps and provided the guidance needed to implement solutions.

Executing the Vision: Driving Operational and Clinical Improvements

With an established roadmap, Premier’s advisors worked with Prisma Health to execute high-impact initiatives. One of the first major projects was a systemwide transition to Premier’s GPO, which delivers a value-driven contract portfolio to help ensure product coverage, enhance competitive pricing and broaden the focus of value analysis.

Despite the complexity of Prisma Health’s purchasing and operations, the GPO conversion was completed in just seven months, unlocking savings, strengthening supplier relationships, and supporting quantifiable quality measures and outcomes for products, with aim to improve health system metrics and patient care.

In parallel, Premier and Prisma Health focused on engaging clinical leaders to align purchasing decisions with patient care goals. High commitment purchasing programs coupled with supply analytics and sourcing/contract management tools enabled Prisma Health to standardize procurement, improve contract compliance and reduce unwarranted variation. These solutions supported broader efforts to engage clinical leaders in decision-making, ensuring that supply chain improvements aligned with clinical and patient care priorities.

Another key supply chain optimization initiative was expanding Prisma Health’s centralized Materials Distribution Center (MDC), enabling more hospitals to rely on in-house logistics rather than third-party distributors. This shift improved systemwide visibility, reduced costs and strengthened supply chain resilience.

Prisma Health also leveraged Premier’s advanced data and technology solutions to enhance decision-making, streamline operations and drive continuous improvement. Solutions such as facility and department level benchmarking, supply chain disruption management, and clinical data processing provided actionable insights that connected clinical and operational leaders, empowering them to track performance, monitor compliance and prioritize areas for improvement.

“This was a turning point for us. Premier brought the data transparency and business intelligence we needed to connect clinical and operational leaders in ways that hadn’t been possible before,” said Dr. Catherine Chang, Vice President and Chief Quality Officer, Ambulatory and Clinical Councils at Prisma Health.

These tools also played a critical role in addressing labor challenges. “We use Premier technology to really assess whether or not we are hiring the right person at the right time in the right unit for the right reasons,” said Abby Stonecipher, the Vice President of Enterprise Business Transformation at Prisma Health. “Labor expense is at an all-time high and we have been continuously seeing our labor expense decrease.”

Prisma Health’s partnership with Premier remains a key driver of its success. “It’s truly an all-in-one arrangement. A one-stop shop, whether you’re looking for a certain technology or tool to solve a problem,” said Stonecipher.

Systemwide Transformation for Bringing the Best Care to Patients

Prisma Health’s results have been transformative. The organization achieved $450 million in total margin improvement over three years - meeting its initial six-year goal in half the time. Other key outcomes1 include:

• $600 million increase in days cash on hand over three years.
• $85 million in one-time cash savings not included in recurring all-in savings.
• Improved cost per case for 15 medical and surgical conditions through waste reduction and clinical standardization.

“These savings go beyond numbers,” said Jennifer Bair, the Vice President of Pharmacy Services and Chief Pharmacy Officer at Prisma Health. “They are helping Prisma Health reinvest in patient care and in our communities – and building a stronger foundation for the future.”

Prisma Health’s transformation is ongoing, but the foundation laid through its partnership with Premier has set the organization on a path to long-term success.

“We’ve done more transformative work in the last 18 months than most health systems do in a decade,” said Chang. “This partnership has fundamentally changed how we operate and how we think about improvement.”

Looking Ahead

As Prisma Health continues to build on their achievements, the organization remains focused on its mission to ensure all people it serves can live their healthiest lives.

“Could we have done this on our own? Yes,” said Sevillian. “Could we have done it as quickly and effectively? Absolutely not. Premier has been a game-changer for us.”

Prisma Health’s partnership with Premier serves as a model for health systems nationwide—demonstrating how collaboration, innovative technology and a shared commitment to excellence can turn challenges into opportunities for margin and operational improvement as well as the continued delivery of outstanding patient care.

For more:

• Learn more about Premier solutions that help drive performance improvement.
• See how Premier's advisory experts can help your organization unlock efficiency and improve outcomes with a Healthcare Rapid Assessment.
• Discover how Beebe Healthcare optimized its workforce and implemented sustainable operational changes with Premier as its partner.

Endnotes:

1The characteristics of individual organizations may vary, past performance does not guarantee future success.

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