GPOs: Providing Value to Suppliers through Increased Transparency and Opportunity


Tue Mar 29 13:00:28 CDT 2016

Healthcare group purchasing organizations (GPOs) are just one piece of the broader healthcare supply chain, but are playing an increasingly significant role, with about 98 percent of hospitals in the U.S. voluntarily contracting with at least one GPO, according to the U.S. Government Accountability Office (GAO).


The healthcare industry as a whole – and, certainly, the healthcare supply chain – is complex, with many moving parts. By aggressively working to promote openness, accountability, and the highest ethical standards in business practices, GPOs are able to increase transparency for the industry, which in turn improves the overall purchasing process for all entities, including suppliers – who are able to realize significant market opportunities through GPOs that would otherwise be unattainable.


Just as GPOs help providers find value by offering them economies of scale, they can also provide suppliers with a broader visibility for introducing products to hospitals and other providers. On a basic level, GPOs offer suppliers access to thousands of hospitals across the country, which in turn can then help these companies grow market share, create jobs and strengthen infrastructure and capacity.


In addition, GPOs improve overall supply chain efficiency and effectiveness through benchmarking, e-commerce solutions, enhanced data accuracy, performance metrics, and product quality measurement. GPOs also offer reliability in overall service and convenience so that suppliers can devote more resources to such efforts as research and development, while also maximizing the value of their products already in the marketplace.


Hospitals are operating on razor-thin budgets, and all parties to the healthcare delivery system continue to search for solutions to rising healthcare costs. GPOs are already bending the healthcare cost curve, increasing competition, and reducing costs for both providers and taxpayers. GPOs are fully committed to providing value to the supply chain, as well as helping to increase efficiency within the supply chain and increase patient access to the highest quality of care.


Curtis Rooney is President of the Healthcare Supply Chain Association.