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PREMIER ANNOUNCES SUBSTANTIVE CHANGES TO BAXTER BUSINESS RELATIONSHIP

 WESTCHESTER, Ill., May 25 /PRNewswire/ -- Officials of Premier Hospitals Alliance announced today that the alliance will make substantive change to its business relationship with Baxter International over the next 12 months, while they assess results of a remedial action plan designed by Baxter to correct problems Premier has cited with the supplier's ethics and business practices. Those problems led to Premier hospitals' April 21 decision to begin to disengage Premier's business relationship with Baxter.
 Premier represents 50 leading tertiary care hospitals and systems and another 100 community and specialty hospitals for a total of 50,000 hospital beds nationwide.
 Premier officials indicated they are cautiously optimistic that Baxter's remedial action plan will result in permanent changes in the supplier's corporate style, ethics and business practices. As such, Premier hospitals have agreed to do business with Baxter on a contract- by-contract basis, pending their assessment of Baxter's progress.
 In the meantime, however, Premier hospitals have agreed that substantive changes in Premier's existing relationship with Baxter including reductions in business are necessary.
 Over the next year, Premier plans to reduce its business with Baxter by up to $50 million. Those reductions will occur by analyzing each existing contract with Baxter as it comes up for renewal and closely examining any Baxter bid for new business as each opportunity arises.
 Premier officials also announced that Baxter will no longer be considered a corporate business partner of Premier, a status assigned to only four of Premier's more than 200 suppliers. Corporate partner status entitles a company to a wide array of value added benefits such as sharing of strategic information, greater access to hospital executives and other special privileges. Furthermore, corporate partner status suggests that Premier will aggressively seek out areas of new business with a designated company.
 Premier hospitals made the decision last month to begin formal disengagement of business with Baxter based on a series of incidents over the last four years that undermined member hospitals' confidence in Baxter's ethics and business practices.
 Premier laid out those concerns in an April 26 letter to Baxter's board of directors. Representatives of Premier's board of directors and Baxter's outside directors subsequently met on April 30 to discuss those concerns. The results of the meeting included a remedial action plan developed by Baxter and an agreement that representatives of both boards would meet again in one year.
 The remedial action plan Baxter has presented to Premier lays out specific steps Baxter plans to take to ensure that in the future the company will comply with the highest ethical standards and be easier to do business with, Premier officials said.
 Premier Hospitals Alliance, Inc., based in Westchester, is a cooperative owned by 50 pre-eminent teaching and research hospitals and hospital systems located in 42 cities nationwide. Premier also represents approximately 100 affiliated community and specialty hospitals including children's and eye and ear hospitals for a total of more than 50,000 hospital beds across the country. This year, Premier will negotiate group purchasing contracts for $1 billion on behalf of hospital members.
 -0- 5/25/93
 /CONTACT: Susan G. Nalepa, vice president of corporate communications of Premier Hospitals Alliance, 708-409-4113/


CO: Premier Hospitals Alliance; Baxter International ST: Illinois IN: HEA SU:

TS -- NY088 -- 2294 05/25/93 16:08 EDT
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Publication:PR Newswire
Date:May 25, 1993
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