Bayhealth Extends Supply Chain Partnership with Premier, Inc., Achieves $8 Million in First-Year Savings

Bayhealth, central and southern Delaware’s largest healthcare system, has extended its supply chain partnership with Premier, Inc. through 2028, following a successful collaboration that saved $8 million in its first year. This renewed agreement expands Premier’s role to oversee all end-to-end supply chain functions, reinforcing Bayhealth’s commitment to cost-effective, high-quality care.

In 2023, Bayhealth faced supply chain challenges, including staffing shortages and fragmented data, which hindered inventory optimization and cost management. To address these issues, Bayhealth partnered with Premier, adopting a co-management model that embedded Premier’s supply chain optimization team within Bayhealth’s operations. This team tackled workforce gaps, improved data visibility, and optimized sourcing and contracting strategies.

“Premier’s expertise has transformed our supply chain, delivering significant savings while aligning procurement with clinical needs,” said Bayhealth Vice President, Supply Chain, Jon Ellsworth. “This partnership has built a foundation for long-term efficiency and resilience, ensuring we can continue delivering exceptional care to our communities.”

The collaboration yielded measurable results, including $8 million in first-year savings, stronger workforce stability with 23.5 embedded Premier specialists, and a redesigned inventory system across 65+ clean supply locations and a 70,000-square-foot warehouse. By standardizing data and integrating analytics, Bayhealth improved supply visibility, reduced waste and enhanced demand planning. A value analysis registered nurse ensured purchasing decisions balanced cost, quality and patient outcomes.

With the extended partnership, Bayhealth aims to further streamline operations, optimize costs and enhance supply chain resilience, supporting its mission of smarter spending and better patient care in an increasingly complex healthcare environment.