All you need to know about a GPO |
Posted: July 22, 2016 |
A GPO or a Group Purchasing Organisation is a body that is formed and organised to achieve a bargaining chip and realise a competitive advantage in terms of cost by availing discounts and rebates from dealers, thus enhancing the purchasing power of the members of the GPO.
Participation in a Gpo Healthcare may either be voluntary or contractual. While Contractual Membership is when members consent to purchase exclusively through the GPO, Voluntary Membership entitles the members to engage in group buying only to satiate their precise need. GPO’s are generally financed by the vendors who pay a fee in the nature of “Membership Fee” or “Administrative Service Fee”. Most GPO’s offer complimentary membership with the object of inducing organizations and businesses to join them and enhance their leverage and purchasing power.
Background of Group Purchasing Organisations GPO’s were originally incepted in the healthcare industry. The Hospital Bureau of New York set up the first GPO in 1910. The next 50 years saw the addition of only 9 more GPO’s to the bandwagon, making a total of 10 healthcare GPO’s in the USA up until 1962. But the next 50 years saw a tremendous expansion in that number, resulting in the presence of hundreds of healthcare GPO’s in the USA.
Benefits of Group Purchasing Organization : These days, the costs entailing medical practices are escalating every day making it very difficult for practitioners to break even. Becoming a part of a GPO does produce a positive impact as it would become possible to save funds on the equipments and services used routinely. Summarised below, are the benefits that can be realised by medical practitioners by becoming members of Group Purchasing Organisations: - Coherent Purchasing Efforts: The rapport and relationship built subsequent to becoming a member of a GPO makes the purchaser more confident and helps the transaction be carried out with ease. The purchaser is able to make an efficient purchase with the knowledge and contacts he builds after becoming a GPO Member. - Competent Buying: As the number of members in a GPO increase, the purchasing power of the group increases, thereby giving it a cost advantage and leverage with respect to the purchases made. The GPO can negotiate deals with greater efficacy than the members individually. Hence, substantial amounts of discounts are availed of, helping members achieve cost benefits on the services and equipments sourced for daily utilisation.
Types of Vendor Partners of Medical Practices GPO’s build alliances with vendors of all kind of equipments and services, so that any member needing any kind of equipment or service can be easily directed to the specific provider. GPO’s try to maintain contacts with a wide spectrum of vendors in various fields like :
- IT Services - Order Vaccines - Insurance - Postage Meters - Payroll Services - Shredding Services - Answering Services - Collection Services - Marketing Services
Whether you plan to use GPO to Order Merck Vaccines or to use other services, it is imperative to find out a few things before becoming part of a GPO. Factors like number of members, type of vendor agreements, type of membership, fee charged, management of the organisation, and potential advantages and savings that can be enjoyed must be given due consideration.
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