Group purchasing offers a great opportunity for long term care facilities, assisted living facilities, hospitals and medical practices to cut costs significantly.
In a recent article, it was reported that one University Hospital had first-year savings of $6.5 million after switching to a Group Purchasing Organization (GPO) and over $2 million in savings the following year.
What are GPO’s? GPO’s use the aggregated buying power of many healthcare providers to negotiate discounts and other favorable terms with manufacturers, distributors and services suppliers.
There are many reasons for choosing a GPO. The advantages of joining a GPO includes time and monetary savings. It can also add value by reducing costs and increasing productivity. For many healthcare providers, achieving efficiencies in their supply chain allows staff to concentrate their attention on providing superior care to their patients. GPO’s are an efficient way to improve the profitability of almost any organization.
Group purchasing offers access to discounts on a wide range of products, including medical supplies, laboratory products, pharmaceuticals including vaccines, office supplies, computers and software, telecommunications, furniture, document management products and form printing, even magazine subscriptions for the waiting room. There are thousands of contracts available representing almost everything a practice would purchase.