The healthcare industry spent $3.5 trillion dollars in 2017 and that number is expected to grow by 5% in 2018. That is why cutting costs, while demanding quality, is one of the top priorities of supply chain teams around the country. We are not just talking about hospitals, but also physician groups, surgery centers, labs, long term care facilities, community and student health and even ambulance and fire departments all trying to create better outcomes and experiences for patients while obtaining savings goals for their organizations.
How do they have the time? Many look to GPOs or Group Purchasing Organizations to help carry the heavy burden. GPOs play an active role in driving costs down for both providers and patients. One way they create savings is in the reduction of transaction or operational costs. The supply chain is vast. If 1,000 suppliers want to sell 10 products to 2,000 hospitals, about 2 million negotiations would have to take place. GPOs dramatically decrease the number of negotiations needed by doing much of the work upfront through RFP processes and value analysis teams. Thus, allowing providers to focus their precious resources on direct patient care. GPOs also increase the volume of orders for a supplier allowing them to negotiate with manufacturers on behalf of the providers for lower overall prices on products and services.
A Group Purchasing Organization supports your organization beyond just when a transaction is needed. GPOs like CNECT offer detailed analytics and benchmarking and help your company build forward looking strategies, and create money saving efficiencies by optimizing your supply chain. GPOs allow you to make smarter decisions to achieve the goals of your business; always putting the patient first and foremost.
The future of healthcare is the connected nature of the supply chain. Don’t get left in the past. Join a GPO and let it start working for you. Streamlining your supply chain can make all the difference.