Why GPOs should standardize healthcare sourcing

Health care organizations can rely on complex systems to meet supply and delivery goals. To control spending, they might also work through a Group Purchasing Organization. Though this can already offer value, strategic sourcing can add even more to the mix, as stakeholders make better procurement decisions with lower costs in mind from the start.

The benefits of GPOs
A GPO does more for health care organizations than simply lowering prices. In January, the Healthcare Supply Chain Association published its latest annual report on the impact these groups have for health care supply.

According to this source, GPOs are indeed set to save as much as $864 billion within 10 years for healthcare, but they're also focusing on important supplier issues, including transparency, disaster management and knowledge sharing.

In a press release accompanying the report, Todd Ebert, the CEO and President of the HSCA, described the vast scope that the CPO has come to represent.

"The importance of GPOs seems to reach local groups as well as larger ones."

"GPOs are expanding their offerings to meet evolving hospital and provider needs, including data analysis and benchmarking, market research, innovative technology integration, infection control, electronic product tracking and developing and facilitating communities of knowledge among healthcare providers and supply chain experts to share best practices," Ebert said.


The importance of GPOs seems to reach local groups as well as larger ones. Modern Healthcare reported on the Michigan-based HPS and its deal with Resource Optimization & Innovation. The two are now sharing contracts, possibly affirming the strength that even smaller-level GPOs feel they have to expand in the current market.

Why use strategic sourcing?
Much of what a GPO does (or is poised to do) aligns with the benefits of strategic sourcing, something healthcare decision?-makers should recognize. The GPO is meant to support supplier value and keep the organization connected to new trends: Sourcing technology can help with the same things, with an additional focus on system standardization.

This could put it back in control of supply, cutting down on the distance between it and its business processes. The end user is important, too, and instead of simply saving money, the smartest system can maximize the final results as well as the ROI for the health care organization in charge.
That need for end results was evident in a recent interview between Becker's Hospital Review and two representatives of Cardinal Health: Senior Vice President of Supply Chain Scott Nelson and CMO Dr. Shaden Marzouk. Dr. Marzouk told the source that 57 percent of hospital staff are aware of some incident when a physician didn't have the product a patient needed.

To highlight the need for patient-centered transformation, Nelson said that automation, analytics and transparency are all elements of the ideal supply arrangement. This reflects the consistency that strategic sourcing provides.

Even when GPOs think they've already made improvements, they may actually still need the added help of e-Sourcing and other important management tools.