In 2019, the average hospital spent $12.1 million more than it needed to, an increase of about 22% from previous years. The costs come from purchasing medical devices and other healthcare necessities.
Although purchasing and distributing medical products is necessary, it’s not easy.
This is why many medical providers choose to hire a healthcare GPO. Hiring a GPO from a healthcare group purchasing organization is key to efficient distribution and more.
Read on to learn the benefits of a healthcare GPO.
Product Negotiation
A healthcare GPO can not only source out products but negotiate the prices as well. Healthcare providers can benefit from having a discount on medical devices, drugs, and more. They’ll negotiate for the following providers:
- Hospitals
- Nursing homes
- Ambulatory care facilities
- Physician practices
- Home health agencies
The entire purpose of a medical GPO is to promote efficiency. For this reason, the products are owned by provider members and not the GPO themselves.
Along with negotiations, these professionals can improve operations and lower costs through data analytics.
Saves Money
Healthcare GPOs can save businesses money on hospital supplies and more through negotiations and lower transaction costs.
Acquiring healthcare products is a complex process as there are thousands of suppliers out there selling items that healthcare providers need. Most of the costs come from joint purchasing which also increases the buyer’s bargain strength.
Improved Efficiency
Working with a purchasing organization benefits a hospital because they will always be fully stocked on the necessities.
Healthcare providers have enough administrative tasks to deal with that a GPO won’t add to. They handle the administrative tasks on their own time on behalf of healthcare providers.
A GPO keeps up with the latest healthcare technologies and distribution trends to constantly improve purchasing efficiency.
Consistent Prices
By buying in bulk, healthcare providers can reduce overall prices and gain consistency. The best medical and surgical purchasing providers will protect their clients from price hikes due to production or delivery problems.
A medical provider doesn’t have the time to monitor market conditions, but GPOs do. Their level of expertise allows them to recognize sudden increases in available products and scarcity of products.
When it comes to the healthcare supply chain, it is best to be protected from unexpected shortages and price hikes by having a medical GPO on your side.
If the supplier you use is demanding more money, a GPO can offer different supplier contracts that sell products at a fair price. They will even streamline the new client and supplier relationship.
Should You Hire a Healthcare GPO?
If you work in healthcare, having a healthcare GPO by your side is ideal. These are critical partners in the medical provider world.
You can rely on a medical GPO to negotiate product pricing, save you money, improve distribution efficiency, and more. If you want to reap all of the benefits outlined in this guide, finding a group purchasing organization is the first step.
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