Time to get in with the in-crowd? A new study looking at the performance of group purchasing organizations (GPOs) shows the organizations can save billions in annual health care and related costs savings. And let's be honest: Who doesn't want to save every dollar they can?
GPOs -- entities that achieve health care cost savings by aggregating their health care buying volume and then using that leverage to negotiate discounts with manufacturers, distributors and other vendors -- have the potential to save the health care system some $36 billion, according to a study of 429 hospitals and over 3 million hospital admissions by Dr. Eugene S. Schneller, a principal for Health Care Sector Advances, Inc. and professor at the Arizona State University School of Health Management and Policy.
Schneller's research, "The Value of Group Purchasing 2009: Meeting the Needs for Strategic Savings," finds GPOs can save:
* $6.8 billion in hospital pharmaceuticals.
* $8.5 billion in medical/surgical purchases.
* $1.9 billion from the cardiology implant market, either directly or indirectly by providing members with GPO purchased goods or reference pricing from directly engaging the marketplace.
* $840 million in attributed savings from the orthopedic implant marketplace.
* $1.8 billion in reduced hospital purchasing costs by eliminating the need for hospitals to comprehensively carry out strategic sourcing, contracting and other key GPO activities for inpatient pharmacy, general medical products, orthopedic products, other clinical products and housekeeping products.
With those kinds of numbers, GPOs are worth a look, no? Is your company part of a GPO or considering joining one? Comment and let me know.
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