Making the Switch

3 secrets your GPO isn’t telling you.

Sponsored – Premier May 2023- The Journal of Healthcare Contracting

As the U.S. healthcare system has undergone a tremendous amount of change over the last few years, many IDN supply chain leaders are taking stock of their supplier relationships and contracts, including GPO partnerships. The perception is that any change will be too laborious on the supply chain team and the clinicians they support. The reality, though, is far different. In fact, the question supply chain leaders may want to ask themselves is, “What are we missing by not doing a reset?”

The following are 3 secrets your incumbent GPO won’t tell you about making a switch:

1. Control-Alt-Delete

When was the last time your GPO examined every single contract to uncover opportunities to optimize pricing, fit into the overall portfolio and alignment with organizational goals? The process of switching GPOs shines a light on all facets of the supply chain by looking at everything.

By switching, many health systems see upwards of a 30% uptick in contract compliance that the supply chain team didn’t even know should be under contract and was missed by the incumbent GPO. Contract compliance is important now more than ever since supplies not covered under contract can see 250% higher inflation than those covered by your GPO contract.1

Unless your partner has the analytics, SMEs and field team to consistently identify opportunities and operationalize changes, you could slowly and imperceptibly lose that edge. Every hospital and health system would benefit from a systematic evaluation of its supplier contracts. The GPO is your number-one advocate for the best pricing, tier management, and value. And, through the evaluation, you’ll get free consulting services to make the best decision no matter who you pick.

2. Switch and save

With the right partner, your pricing won’t be disrupted during the switch. A grandfather clause will hold your pricing in line with where it is today while you explore savings opportunities amid all categories. Perhaps even more important, you won’t lose any of your supply chain team’s time, staff and capacity, nor that of your clinicians.

Your GPO partner should do the heavy lifting on the front and back end of the evaluation, reset and implementation process, freeing up internal staff for more value-add work. Once you establish key stakeholders within the organization and selection criteria, engage GPO partners in a 5-step comprehensive GPO assessment process, describe your goals, speak with or visit reference sites, and review the implementation plan to ensure that your team doesn’t get stuck babysitting, filling gaps in contract coverage or having to join another regional aggregator to achieve the portfolio price you deserve.

3. Create value beyond supplier contracts

Think beyond the market basket. While it is a useful quantitative tool, your GPO should be able to go far beyond the price point. Health systems don’t need more solutions. They need a partner that will come alongside and demonstrate an understanding of your goals – a partner that can not only tell you what your score is but provide rapids insights and a support model to achieve your goals without a herculean lift internally.

Indeed, the right GPO partnership moves beyond fee share and into being a transformation engine for hospitals and health systems. The view is well worth the climb. Through this partnership, supply chain can become a chief driver of culture change, leading to better financial and clinical outcomes for patients and the organization.

1 Inflation and Purchased Services,

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