Exploring the Evolving Role of Group Purchasing Organizations in Healthcare Procurement and Value-Based Care Models

Group Purchasing Organizations are groups that make deals for their member healthcare providers. They buy medical supplies, drugs, and equipment at lower prices. Because many hospitals, clinics, and medical practices join together, GPOs can get better prices than if each provider bought alone.

In the past, GPOs mainly helped reduce supply costs. Supplies usually make up about 15% of hospital expenses. In some hospitals with complex surgeries, this can be as high as 40%. Saving money on supplies through GPOs can directly affect a hospital’s budget. For example, one GPO helped a healthcare system save $3.6 million on implants by managing prices on similar products.

GPOs’ Expanding Role in Healthcare Procurement and Operational Strategy

While saving money is still a key job of GPOs, many now offer more services. Healthcare is moving toward value-based care models. These models focus on better patient results and lower costs. Groups like the Centers for Medicare & Medicaid Services support this change.

Value-based care means providers work together to improve health and reduce expenses. Integrated Delivery Networks (IDNs) and Accountable Care Organizations (ACOs) are frameworks that help with this. By early 2024, there were over 1,100 IDNs and around 1,800 ACOs in the U.S. These groups work with GPOs to make buying easier and save money.

Top GPOs, such as Vizient, Premier Inc., and HealthTrust Purchasing Group, work with hospitals across the country. They help IDNs standardize buying and supply chains. This leads to savings that can go back into patient care.

GPOs also use data to improve patient outcomes. For example, one GPO helped a hospital reduce deaths from sepsis by 45% using a tool created from data analysis. This shows GPOs now help with both clinical and business improvements.

GPOs and Managing Supply Chain Challenges in Healthcare

The healthcare supply chain faces many problems like sudden demand increases, product shortages, and disruptions from events like natural disasters or pandemics. In 2018, shortages of healthcare products rose by 36%, worrying providers about having enough supplies.

GPOs play a key role during these times. During the COVID-19 pandemic, they kept track of scarce items like personal protective equipment (PPE). They worked with agencies like the FDA and CDC to reduce shortages. Past epidemics, such as H1N1 and Ebola, led GPOs to create programs to bring shortage drugs back and help providers prepare for future problems.

To get ready for supply risks, many GPOs use predictive analytics, machine learning, and artificial intelligence. These tools watch market trends, predict shortages, suggest how much inventory to keep, and help avoid over-ordering. Healthcare leaders benefit because these tools keep supply chains stable. Hospitals and clinics can keep enough stock without spending too much.

Specialty Drug Procurement and GPOs: The Example of Onmark®

Specialty drugs, used in fields like cancer treatment, rheumatology, and neurology, have special challenges. They cost a lot, need special storage, and have complex pricing. Onmark®, linked to McKesson, is a GPO that focuses on helping specialty drug practices buy cost-effectively.

Onmark negotiates prices early and offers savings based on performance. It helps specialty clinics cut drug costs while keeping access to important treatments. Programs like Onmark United for cancer and Onmark Vision for retina care connect similar clinics, giving them stronger buying power and contracts suited for their needs.

Onmark also helps with inventory management and dispensing drugs efficiently. They provide education too, like the Biosimilar Master Class, which helps providers understand FDA views on biosimilars to make good choices for drug buying.

The Role of Data Sharing and Integrated Networks in Procurement Efficiency

Sharing data between healthcare providers is important for better care and buying. IDNs and ACOs use Health Information Exchanges (HIEs) to share patient claims, clinical info, and usage data instantly. This helps providers make better clinical and purchasing decisions.

IDNs working with GPOs standardize buying and supply processes across many hospitals. This lowers costs by buying in bulk and cutting extra orders. It also helps track inventory better and share supplies within the network as needed.

Providers with value-based contracts lower readmission rates for diseases like diabetes, COPD, and heart failure. They do this by coordinating care and operations with shared data. This helps justify putting money saved from buying back into patient care.

AI and Automation in Healthcare Procurement and Workflow Optimization

Artificial intelligence and automation are changing clinical work and office tasks in healthcare. These changes help GPOs and their members buy supplies and handle front office work more smoothly.

AI-Driven Procurement Analytics:
Using machine learning, GPOs study buying patterns, predict supplier changes, and spot possible shortages early. This stops extra stock or urgent last-minute buys at high prices. AI also finds best reorder points, checks contracts, and finds ways to save money.

Automation of Ordering and Inventory Management:
Automated tools linked to electronic buying systems let healthcare managers set routine orders that trigger when inventory is low. These systems send purchase requests or alerts automatically. This keeps supplies coming on time and cuts down mistakes and delays.

Front-Office Phone Automation with AI:
Companies like Simbo AI use AI to automate phone answering and scheduling for healthcare. This helps handle patient calls, appointments, and info quickly. It lets office staff focus on harder work. Better communication helps run offices more efficiently and improves patient experience.

For medical administrators and IT managers, AI-powered buying and office systems link supply processes to daily work. This lowers costs, smooths workflows, and uses resources better.

How U.S. Healthcare Providers Can Benefit from Strengthened GPO Partnerships

Healthcare is getting more complex and budgets tighter. Medical practices, hospitals, and networks need to work with GPOs that offer more than just discounts. Providers should find partners that provide data tools, AI, specialty drug programs, and ways to reduce supply risks.

Big GPOs in the U.S., like Vizient, Premier Inc., and HealthTrust, cover large hospital networks and have strong buying power. Providers working with them get contracts that cut costs on many products, from implants and surgery supplies to specialty drugs.

GPOs also help share data for better decisions and resource use across networks like IDNs and ACOs. When combined with AI and automation tools for buying and office work, these partnerships improve operations throughout healthcare.

Summary

Group Purchasing Organizations in the U.S. healthcare system have changed a lot from just making deals on prices. Now, they provide smart buying services that connect with population health and value-based care goals. They use data, AI, and automation to predict needs better, manage supply chains well, and buy specialty drugs at good prices. Working with advanced GPOs and using shared data systems helps medical managers handle buying faster, cut extra work, and improve patient care. This support is more important now as costs rise, supplies become uncertain, and demand for quality and accountability grows.