Healthcare GPOs: Critical Partners to America’s Providers and the Patients They Serve

By Khatereh Calleja, J.D.

KHATEREH CALLEJA, J.D.

The COVID-19 pandemic has impacted every aspect of the American healthcare system, placing unprecedented pressure on hospitals, nursing homes, physicians, and the healthcare supply chain. Throughout this tumultuous time in healthcare, one thing remained constant: the critical role that healthcare group purchasing organizations (GPOs) play in supporting hospitals, other healthcare providers, and the patients they serve.

HSCA, which represents the nation’s leading healthcare GPOs, recently released its 2020 Annual Report detailing the impact of GPOs and it confirms what hospitals, healthcare providers, suppliers, and policymakers see every day: GPOs improve healthcare quality; reduce costs; increase competition; drive transparency, visibility, and predictability; and add value to all supply chain stakeholders.

For example, GPOs have taken a number of innovative steps to support COVID-19 response efforts, including supply coordination efforts to help medical teams obtain much-needed supplies and support surge capacity, adding new manufacturers to contracts to rapidly increase supplies, and working with non-traditional and adjacent industries to fill supply gaps for essential products such as hand sanitizer, isolation gowns, and surgical caps. Multiple GPOs launched programs to strengthen the resiliency of the supply chain of essential drugs and shore up domestic manufacturing, helping enhance competition, mitigate shortages and increase supplies of critical drugs for patients.

GPOs are supply chain leaders in quality assurance and take a comprehensive approach to purchasing that considers not only the competitive pricing offered, but also the quality of the manufacturer and the reliability and stability of supply as well as key FDA inspections as part of the contracting process. GPOs’ fierce commitment to quality helped to protect member hospitals from purchasing counterfeit or inferior goods during the COVID-19 pandemic, working around the clock to field thousands of inquiries and vet new manufacturers for compliance with standards set by the FDA and National Institute for Occupational Safety and Health (NIOSH) and ensure safeguards for product quality. 

As organizations moved to virtual
operations, GPOs played a key role in helping member providers swiftly transition to telehealth. According to a GPO’s data, provider use of telehealth skyrocketed from fewer than two percent of providers prior to March 2020 to more than seventy percent by the end of April. GPOs took several steps to support acute and non-acute healthcare providers’ rapid transition to virtual visits, including weekly education and training sessions, providing timely updates on policy developments supporting telehealth adoption, and helping members apply for telemedicine funding from The Coronavirus Aid, Relief, and Economic Security Act (CARES).

GPOs are actively involved in policy efforts to strengthen supply chain resiliency, enhance upstream visibility, and drive quality throughout the healthcare system. HSCA supports measures like those included in the CARES Act, which strengthened reporting requirements for manufacturers, including certain information about active pharmaceutical ingredients and other raw materials, to better prevent, assess, and address shortages of medical products. HSCA also issued a series of principles and recommendations to further strengthen supply chain resiliency and enable an effective response to public health crises.

GPOs’ unique line of sight across the entire healthcare system enables them to help providers anticipate and respond to rapid changes and unprecedented situations like the COVID-19 pandemic. As we look ahead to 2021 and beyond, HSCA and its members remain committed to helping hospitals and healthcare providers deliver the most effective and affordable care possible to the patients they serve.

Khatereh Calleja, J.D., is the president and CEO of Healthcare Supply Chain Association (HSCA).