The value of GPOs in healthcare supply chain: 6 findings

Group purchasing organizations reduce healthcare costs, increase competition and drive transparency, among other advantages, according to a new report from the Healthcare Supply Chain Association.

To assess the value group purchasing organizations hold in the healthcare supply chain, HSCA gathered data from its member GPOs through a survey.

Here are six main findings from the report.

  1. GPOs reduce costs. GPOs are projected to save between $392 billion and $864 billion in healthcare costs over a 10-year period. HSCA also expects GPOs to save customers an average of 10 to 15 percent across most expense categories and provide $1.8 billion annually in human resource savings.
  1. GPOs increase competition. Health organizations' decision on whether to use a GPO drives competition, innovation and lowers costs, not only within the GPO sectors, but in the healthcare system at large, according to the report.
  1. GPOs drive transparency. GPOs offer a direct line of sight across a large span of products and services, adding predictability to purchasing decisions, visibility into pricing and value for their members, reports HSCA.
  1. GPOs propel health process and system transformationGPOs unite supply chain experts and providers to share best practices and create beneficial communities of knowledge, according to the report. GPOs also offer a new model for reducing spending by aligning cost, quality and outcome.
  1. GPOs add value to suppliers. GPOs help develop supplier-customer relations, lower the cost of sales through greater efficiencies and enhance supplier credibility by providing data, growth opportunities, education and collaboration, reports HSCA.
  1. GPOs are on the front lines of key health trends and challenges. GPOs  helped healthcare providers confront several key trends and challenges in 2016, including emergency preparedness, energy management, drug utilization management and value-based purchasing.

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