The small and medium sized medical practice is finding its profit margin shrinking with every new compliance regulation and insurance readjustment. The opportunity to save money on the operations side may help grow a bottom line without having to levy new fees on patients or giving up office services. A group purchasing organization (GPO) leverages the power of numbers to lower prices for members without having to give up on the quality of the product.

Volume Means Discounts

The most obvious benefit of joining a GPO is volume purchasing power. Vendors and medical suppliers will be much more likely to provide discounts to a group of physicians making large purchases than to an individual office. The GPO gives each of its members leverage to negotiate other concessions outside of pricing as well. For instance, GPOs may be able to upgrade its supplies to include extras that are usually behind paywalls.

Market Knowledge

Aside from price, the leverage of a GPO improves the insight of its members. Managed volume offers a better perspective into market data, and the GPO may be able to predict better pricing based on trends.

Inventory and Procurement

Small offices may have issues getting certain products at the scale that it needs them, because vendors may not consider a smaller order worth filling. A GPO may be able to help with these kinds of procurement issues, ensuring a steadier inventory and a lower per unit cost on each order.

Related Article: Improve Practice Profitability by Reducing Costs of Medical Supplies

Compliance

The right GPO will have legal staff on hand to ensure that all purchases are in compliance with relevant laws. This is an especially important issue for providers of health care because of the complexity of the regulatory framework.

Membership

Not all GPOs are free, but some of them are. However, most GPOs will pay for themselves after the first order. If you can find a GPO with free membership, it may be an advantage to consider, but it should not be your top priority.

Quality Services

Your GPO will pre-screen vendors to reduce the risk of working with a problematic supplier. Each office saves time and manpower, because in house staff does not have to screen each vendor for every purchase. GPOs generally have a lower purchasing risk, because members will send up reviews of companies that the organization worked with previously.

The Office of Inspector General Advisory Opinion on GPOs

The Office of Inspector General has issued several opinions on GPOs. The Office issues opinions in response to requests on the structure of GPOs. GPOs can be structured in many ways, with different benefits prioritized in each structure. Depending on the nature of the GPO that you are thinking of joining, you may be able to find an opinion on that type of GPO.

The Office of Inspector General can offer opinions as to the legality of a GPO structure as well as its commercial validity. However, it can only create this opinion on the facts given to it, and its advice should not be considered an unassailable word about the legality or the validity of a GPO.

Should Your Medical Practice Join a GPO?

There are many advantages to a GPO, and small offices have the ability to save a great deal of money and time under its protective wing. Price is definitely the factor everyone talks about, but there are many other features to consider as well. You have many options for research when it comes to vetting any GPO you join – use the experiences of other medical practices and the professional opinions of the Office of Inspector General to make an informed choice.

M-Scribe leveraged our client base to partnered with a large national Group Purchasing Organization (GPO) to offer a significant savings without any additional cost! Call me today at 770-666-0470 or email me at patrick.dougherty@m-scribe.com to know how you can reduce your cost of supplies as well.

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