An Interview with the Mike Alkire of Premier Purchasing Partners
- Published on July 8, 2010
- Written by David A. Shimberg, CBCP
As president of Premier Purchasing Partners, Mike Alkire has responsibility for an organization that offers comprehensive supply chain services to 2,300 hospitals of the Premier healthcare alliance. Using Premier’s contracts, alliance members purchase more than $33 billion of medical devices, pharmaceuticals, and other supplies and services annually at market-leading prices. Premier also provides support for member supply chain improvement efforts with collaborative projects and expertise in such areas as pharmacy, OR, ER, and non-labor expense reduction.
Shimberg: How does Premier ensure its ability to provide services if a disaster strikes Premier’s offices?
Alkire: Premier’s Board of Directors recognized business continuity (BC) as a requirement for Premier a number of years ago. The company established a BC and disaster recovery (DR) steering committee to oversee the BC program (BCP) and a certified business continuity manager was hired in 2003. Premier’s program includes a remote DR “hot site” to which critical applications can be recovered and operated, including e-mail exchange servers. Remote work area seats are also available.
Our BCP standards require that business impact analysis be conducted at least every two years on all critical processes and plans updated based on new or changing risks. Security of the information used in the DR hot site is also critical. Because of the nature of our Healthcare Informatics products, we have stringent HIPAA related controls ensuring that patient information is secure. The legal penalties and public image damage for a HIPAA breach are too severe to risk. We also conduct an enterprise-wide annual disaster exercise including recovery and testing of all critical applications, which ensures employees know their role in unit plans. Any issues are uncovered, documented, and resolved. In addition to the annual exercise, business units and applications groups also perform unit tests at least once each year. Monthly key process indicators are used to monitor the readiness of all plan components, ensuring critical documents and items are current. Finally, Premier auditors review our BCP and plans annually.
Overall, Premier’s BCP program is very robust, and we are prepared to deal with nearly any business interruption. During our 2009 exercise, for example, the exercise scenario forced us to deal with a train derailing within half a mile of our office, releasing chlorine and anhydrous ammonia. The scenario forced us from our offices for nearly a month, making us really examine some of our work from home procedures.
Shimberg: Does Premier have DR plan requirements for its suppliers, and if so, how are they verified?
Alkire: Our contracts include guarantees for delivery of goods and services and for the vendors to either arrange delivery of or reimburse for purchase of the goods and services promised elsewhere. Our contracting process includes asking about vendor DR plans and include the stipulation that the plans must be made available for review by Premier if requested.
Shimberg: As one of the largest healthcare performance improvement alliances in the country, Premier is able to offer its member hospitals the best possible prices on supplies utilized in healthcare settings through its purchasing network. Because of this, Premier is in a unique position between hospital supply manufacturers/distributors and healthcare organizations. What role has Premier played in past regional disasters like the 2005 hurricane season?
Alkire: We have 120 Field Force employees coast to coast working with Premier members to keep their team aware of areas across the alliance that may be potential disaster threats. For instance, if a hurricane occurs down South causing major window and roof damage at one or more of our member hospitals, the Premier Field Force representative in that area will work with our members to assess their disaster needs and will notify the Premier DR team immediately. The Premier DR team will work with distributors, suppliers, and other agencies to address the needs of our members. Because we leverage relationships with suppliers and distributors, we are able to prioritize to just about any type of need, in this case window and roofing supplies.
Shimberg: An ever-increasing percentage of medical supplies, including pharmaceuticals, are manufactured offshore. This obviously presents a potentially serious threat to the U.S. healthcare supply chain. What role, if any, does Premier play in helping reduce risks of supply chain interruption from non-domestic sources?
Alkire: Medical products companies concentrate manufacturing in other countries like China in order to access cheaper prices. Because we are so dependent on China and other countries, we do have huge risks. One of the concepts we’ve been pushing is spreading out the manufacturing of goods to near shore areas like Central America and South America. Dispute resolution efforts by U.S. trade representatives could help facilitate such activity. We also push suppliers who have moved manufacturing overseas to come back to the U.S. in order to better control quality, ingredients and availability.
David A. Shimberg, CBCP, is business continuity and disaster recovery manager at Premier, Inc., a hospital performance improvement alliance with 1,700 participating not-for-profit hospitals and health systems serving communities nationwide. He is currently board chairman of CPAC, chairman of the Charlotte-Mecklenburg All Hazards Advisory Committee, and a member of the Disaster Recovery Journal Editorial Advisory Board.