By Kacie Bemmels, Caresfield Director of Strategic Partnerships
COVID-19 changed the environment for healthcare facilities. Many organizations, whether acute or long-term, can improve vendor relationships and leverage the benefits of GPO membership to help stabilize the supply chain and manage costs.
“Facilities have been streamlining operations for years, adopting just-in-time inventory practices,” said Barry Marquardt, director of medical products & services at Managed Health Care Associates, Inc. (MHA), the country’s largest alternate site GPO. “The pandemic didn’t just stretch that supply chain, it broke it in many respects.”
Caresfield has worked with MHA since 2017. The organizations recently worked together to present the Caresfield CaresTalk webinar, How to Overcome Breaks in Your Supply Chain: How to Diversify Vendors while Leveraging Your GPO Contract.
Provider/Supplier Bridges and Barriers
One barrier between healthcare facilities and suppliers is information transparency. Many suppliers cashed in during the pandemic with opportunistic price increases. When paired with uncertainties in the operating environment, it became difficult to manage costs.
Next is the influence clinicians have on procurement. Ideally, the supply chain supports the best outcome for patients or residents with the fewest resources spent. This can be difficult in non-acute settings, where it’s typically a single person reviewing costs and product alternatives.
Ordering items made or stored in the U.S. poses a lower risk. Suppliers should invest in research and development to optimize costs and produce quality products. Partners without backup suppliers or raw material sources run into back orders and disruption.
Quality matters, too. Suppliers with a quality management system hold products to a certain standard. There is little to no material waste which helps control the cost of raw materials and ensures dependable products.
If a supplier works with GPOs, you can save thousands of dollars annually. Typically, GPO contracts come with discounts on purchases, rebates for compliance and other value-adds like free freight.
GPOs are Diversifying Vendor Sources
GPOs are always working to provide better value to members. During the pandemic many items were suddenly in high demand. Many GPOs expanded product categories and worked with suppliers to find strong manufacturers with a high market share and healthy supply chains.
Additionally, GPOs work to understand forecasting challenges and drive price transparency. By communicating what’s available and what sourcing needs to change, GPOs and vendors can help you keep crucial supplies stocked.
GPOs vet suppliers and conduct contract negotiations. GPOs save members significant money by negotiating value-adds like free freight, on-site support and rebates. Some GPOs even offer different revenue and value-based programs to enhance your membership.
How Suppliers Support GPOs and their Members
Suppliers and GPOs can work together to collaborate on new product opportunities. Suppliers can also share transparent information on current inventory. This includes relaying market conditions back to GPOs with quarterly and annual budgeting.
“The bottom line it comes down to communication,” Marquardt said. “As a supplier, proactively engaging with your customer base drives comfort and confidence in your operation.”
Partnering with GPOs can provide a wealth of benefits aside from contracted pricing. As a supplier or as a GPO, the goal is to give you the tools to make your operation successful with a focus on positive clinical outcomes.
If your current distribution partner, supplier or GPO doesn’t do that for you, reach out to Caresfield to see how we can help! You can call our main line and talk to a real person at 952-890-7100 or use the live chat feature on www.caresfield.com.