TO GPO OR NOT TO GPO, THAT IS THE QUESTION

Healthcare industry experts tell us that hospitals and hospital systems will have an affiliation with more than one of the national Group Purchasing Organizations. The average number of GPO affiliations they have is approximately 1.7. The GPO remains a strong force in the healthcare industry. They continue to pioneer healthcare cost reduction strategies for their members. And by screening a supplier’s value proposition, negotiating pricing agreements, and analyzing real savings for the member, they accomplish much of the upfront work that adds efficiency to the healthcare sourcing and purchasing process.

The impact of healthcare reform on this purchasing process has forced our supply chain customers to do more, faster, and with fewer resources. As they are extremely busy there must be a compelling reason for them to move away from the status quo.

The GPO no longer exists in its original state. Their messaging to provider members and prospective members has grown and matured to meet the changing healthcare environment. When we look at how GPO’s identity themselves, we no longer see the words group purchasing organization in the headlines.

Amerinet: “As a leading national healthcare solutions organization, Amerinet believes the only path that’s right for your healthcare facility is the one designed only for you”.

HealthTrust: “Let our total cost management services and operator advantage support your progressive supply chain ambitions, enabled by the powerful collaboration of the nation’s leading IDNs”.

MedAssets “…we’ve challenged the status quo to improve the quality and effectiveness of healthcare. Grounded in passion, proven industry expertise and data-based insights, MedAssets helps providers to enhance operational and financial performance so that they can sustainably serve the needs of their community.

Novation Overview: “In this era of change, Novation provides both a vision and a path to help members advance new models of cost-effective, high-quality care.  To better serve the nation’s leading not-for-profit health care organizations, academic medical centers, and children’s hospitals, Novation is consistently focused on a progressive approach to cost performance, data and intelligence, and integrated solutions”.

Premier: We are an alliance of healthcare providers on a mission to transform healthcare.

There are medical device manufacturers that serve the healthcare industry by providing very unique product offerings and value propositions. They may want to work directly with the hospital or hospital system buying authority, but have become frustrated by the GPO.

Among the questions suppliers have:

  1. Is there a herd mentality to engage with the GPO, or is the best way to bring my products to the customer.
  2. There is no reason for the GPO to minimize their market value by only concentrating on establishing pricing agreements with suppliers. How can suppliers play a greater role in the overall solutions that GPOs offer their members?
  3. Finally, if the name GPO no longer fits these groups, what’s the new three-letter word that paints the new and differentiating picture?