What You Should Know:
– Premier and 15 of its members acquired a minority stake in Prestige Ameritech, the nation’s largest domestic producer of face masks, as well as other personal protective equipment (PPE) to address shortage due to COVID-19 pandemic.
– The minority stake represents a long-term strategy to invest in or partner with PPE suppliers that source from multiple regions as well as domestic markets to help ensure that a greater proportion of healthcare products are insulated from shortages and available in times of need.
Premier Inc., a healthcare improvement company, and 15 leading health systems has acquired a minority stake in Prestige Ameritech, the largest domestic manufacturer of face masks, including N95 respirators and surgical masks. Under the agreement, Premier members commit to purchase a portion of all face masks they use annually from Prestige Ameritech for up to six years, inclusive of a three-year renewal option.
Why It Matters
PPE products critical for the daily operations of health systems are overwhelmingly sourced overseas, with approximately 80 percent coming from China and Southeast Asia. The risks of this overreliance on Asia came into sharp focus as COVID-19 swept across the globe and these nations closed borders and prevented U.S. access to supplies, triggering widespread shortages of PPE needed to protect healthcare workers and patients. In contrast, Prestige Ameritech represents a domestic supply chain, with production completed in the United States. Prestige also sells 100 percent of its products to U.S. customers.
The minority stake with Prestige Ameritech is part of Premier’s newly announced strategy to work with members to invest in domestic and geographically diverse suppliers of PPE and other medical equipment currently in shortage due to the COVID-19 pandemic.
“With past outbreaks such as SARS, H1N1 and Ebola, the nation talked about domestic manufacturing and expanding supply sources as the keys to preventing shortages, only to return to the same overleveraged overseas markets once the crisis was over,” said Premier President Michael J. Alkire. “This move is the latest step in our long-term commitment to changing the way we source critical products so that we never again experience shortages as a result of overreliance. Our economic prosperity can no longer be tied to things we buy – it must also come from things we make.”
Participating Health Systems
Premier members participating in the initial investment include AdventHealth (Altamonte Springs, FL), Adventist Health (Roseville, CA), Advocate Aurora Health (Downers Grove, IL, and Milwaukee, WI), Ballad Health (Johnson City, TN), Banner Health (Phoenix, AZ), Baptist Health South Florida (Miami, FL), CommonSpirit Health (Chicago, IL), Genesis Health System (Davenport, IA), Henry Ford Health System (Detroit, MI), McLaren Health Care (Grand Blanc, MI), Riverside Health System (Newport News, VA), St. Luke’s University Health Network (Bethlehem, PA), Texas Health Resources (Arlington, TX), Universal Health Services, Inc. (King of Prussia, PA) and University Hospitals (Cleveland, OH).
“These members are true innovators, as they are the first to step up and fund the long-term domestic manufacturing of healthcare products,” continued Alkire. “This agreement and the added domestic supply it enables would not be possible without their commitments. Each one deserves recognition for its leadership and for its work to bring supplies back home to America.”
Financial terms of the agreement were not disclosed.