GPOs will save the healthcare industry $456B in the next decade, study finds

Group purchasing organizations will save the healthcare industry as much as $456.6 billion in the next 10 years, according to the Healthcare Supply Chain Association's third annual value report, released March 24. 

Healthcare economists at DaVanzo & Associates compiled the report from National Health Expenditure data published by CMS and surveyed hospital and nursing home networks that used GPOs. The respondents represent 530 facilities with a total business volume of $59.7 billion. 

Five things to know: 

  1. The Healthcare Supply Chain Association is a trade group that represents 13 purchasing organizations.

  2. HSCA's report found that 98 percent of all U.S. hospitals use a GPO and work with an average of two to four GPOs per hospital.

  3. GPOs save the entire healthcare system $34.1 billion annually and are expected to save the industry $456.6 billion in the next decade.

  4. Hospitals and health systems that use group purchasing organizations save an average of 13.1 percent across most expense categories on supply-related costs compared to those that don't.

  5. GPOs save Medicare $8.7 billion annually and save Medicaid $6.8 billion annually, according to the report. They are expected to save Medicare $116.3 billion in the next 10 years and save Medicaid $90.1 billion in the same time frame.

Read the full report here

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