Both healthcare and non-healthcare related businesses have faced unprecedented challenges due to the ongoing COVID-19 pandemic, as well as digital innovations that are transforming the way businesses operate. Whether you’re considering joining a Group Purchasing Organization or you’re one of our current members, here are a few trends to watch out for in the coming year.
Consolidation of regional GPOs into larger national GPOs.
As Amazon continues to transform its own business practices, larger national GPOs are acquiring more regional GPOs in anticipation of what Amazon might do. Healthcare-based GPOs have the greatest cause for concern, especially due to Amazon’s move to make Alexa HIPAA-compliant, as well as their foray into pharmacy services.
Increased healthcare companies making GPO purchases
Within healthcare companies, purchases made through GPOs are expected to continue increasing due to higher levels of regulation regarding reimbursements. Regulations on healthcare reimbursements are expected to increase due to the new presidential administration, pushing healthcare facilities to consolidate more spend through GPOs while managing tighter operating budgets.
Transition to value-focused negotiations, rather than just price
GPOs will continue to grow service offerings and focus more on the total value they bring to both members and suppliers. In doing so, the way contracts are negotiated may also change.
Instead of constantly focusing on price, negotiations may be more centered around quality products sourced in a partnership that benefits both GPO members and suppliers. Quality products that cost slightly more, improve patient outcomes in healthcare, or need less maintenance in a manufacturing setting may be more beneficial to a company’s bottom line in the long run.
Increased GPO involvement in sourcing of PPE supplies.
The COVID-19 pandemic has put the spotlight on the manufacture of personal protective equipment (PPE), and the inability to avoid production disruptions for products that are primarily produced in a few areas of the world. GPOs like Premier are partnering with manufacturers and health systems, shifting production across multiple regions and leveraging automation to remain price-competitive.
With all these changes, there’s never been a better time to join a GPO. Schedule a discovery call today and find out how HE Co-op can help you save on supplies and services.