Healthcare Group Purchasing Organizations: 3 Takeaways

by | Feb 23, 2017

A recent article in Forbes reported how group purchasing organizations (GPOs) are playing a huge role in healthcare’s supply chain management. By most accounts, the Affordable Care Act has increased access for previously uninsured individuals. However, it has not addressed the high cost of supplies. Healthcare GPOs have helped healthcare facilities achieve supply chain efficiencies, reduce costs, control pricing, and improve patient care. We’ll show you how.

Reduced Costs

GPOs have saved the healthcare industry $2 billion a year in human resource costs and delivered $36 billion annual price discounts. Healthcare facilities that leverage the buying power of GPOs save an average of 10-18 percent a year compared to those who purchase directly from medical device companies.

Increased Access

Of the thousands of vendors supplying the healthcare industry with supplies and devices, some are more cost-effective than others. Finding the best vendors, supplies and devices can take considerable efforts, and many smaller healthcare facilities simply don’t have the necessary resources. GPOs eliminate the legwork and help small and rural healthcare facilities provide their patients with state-of-the-art medical devices.

Price Controls

Besides providing healthcare facilities direct savings, GPOs also help reduce costs across the industry. GPOs put pressure on the $200 billion medical device industry and help prevent unreasonable price increases.

Patient Benefits

A directive in the Affordable Care Act encourages “value based purchasing” as a key component in improving patient care. GPOs are helping healthcare facilities to boost their members’ operating performance by increasing standardization and reducing variance. This helps to make service more affordable and prices more consistent for patients.

Partner with Prime Source GPO

Prime Source GPO is a group purchasing organization serving over 1000 long-term care facilities with over 100,000 total long-term care residents. For more information on our services, please visit our homepage.

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