Over at Spend Matters, they are starting a series focused on the history and background of healthcare Group Purchasing Organizations (subscription required). These organizations provide significant benefits to the healthcare market, particularly in cost savings. According to the Healthcare Supply Chain Association (HSCA), there are more than 100 national, regional, and local GPOs in the US.
Like any disparate procurement organization, GPO’s can benefit from a B2C-like buying experience in their Procure-to-Pay process These organizations need to help their member hospitals encourage high levels of adoption, making purchases through the GPO across the proper categories while ensuring that the GPO adheres to their various commitments to transparency and oversight. Like any other industry, it will all start with Search.
How Hospitals Can Benefit
For hospitals,working with a GPO through a B2C-style marketplace can find a simplified purchasing experience. Users will be able to log in, access the appropriate catalogs/content and make purchases much like they would buying consumer goods at home. All of the internal controls manage approvals, POs, invoices, etc.
How Suppliers Can Benefit:
Suppliers working with a GPO that provides high levels of supplier engagement will be able to quickly access and manage their catalog online. This deep level of interaction can often lead to more purchases for that supplier vs. a supplier with an offline catalog.
Competitive Advantage for the GPO
According to a 2010 GAO report, GPO’s operate in a competitive marketplace, where 2-4 are often competing at the same hospital for business. Offering a compelling value-add capability in the form of a simple purchasing interface that requires little to no training, could be what wins the business.
Group purchasing organizations are a critical component of cost savings in healthcare. GPO’s, suppliers, and hospitals can benefit from the use of technologies like BuyerQuest.