Bayhealth, central and southern Delaware’s largest healthcare system, has announced the extension of its supply chain partnership with Premier, Inc. through 2028. The renewed agreement follows a highly successful first year of collaboration that generated $8 million in savings, underscoring Bayhealth’s ongoing commitment to delivering cost-effective, high-quality care.
In 2023, Bayhealth confronted significant supply chain challenges—including staffing shortages and fragmented data—that affected inventory optimization and cost management. To address these issues, Bayhealth implemented a co-management model with Premier, embedding Premier’s supply chain optimization team within its operations. The team focused on filling workforce gaps, improving data transparency, and refining sourcing and contracting processes.
“Premier’s expertise has transformed our supply chain, delivering significant savings while aligning procurement with clinical needs,” said Bayhealth Vice President of 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 produced tangible improvements: $8 million in first-year savings, enhanced workforce stability with 23.5 embedded Premier specialists, and a redesigned inventory system spanning more than 65 clean supply locations and a 70,000-square-foot warehouse. By standardizing data and integrating analytics, Bayhealth increased supply visibility, reduced waste, and improved demand planning. A value analysis registered nurse also played a key role in ensuring purchasing decisions balanced cost, quality, and patient outcomes.
With the extended agreement, Premier will continue managing all end-to-end supply chain functions for Bayhealth. Both organizations aim to further streamline operations, strengthen supply chain resilience, and optimize costs to support Bayhealth’s mission of smarter spending and better patient care in a complex healthcare landscape.
