http://stephensnexus.com/2006/10/05/group-purchasing-organizations-are-they-worth-it/ Dave Stephens on technology and business trends Wed, 08 Dec 2010 23:20:54 +0000 hourly 1 http://wordpress.com/ http://stephensnexus.com/2006/10/05/group-purchasing-organizations-are-they-worth-it/#comment-1708 Wed, 01 Nov 2006 18:24:40 +0000 http://procurement.wordpress.com/2006/10/05/group-purchasing-organizations-are-they-worth-it/#comment-1708 The business model of a GPO couldn’t be simpler – leverage aggregated purchasing volume to obtain discounts from suppliers. While some large integrated delivery networks are doing more self-contracting, purchasing volume through GPOs continues to rise every year (check the financial reports of Premier and VHA – both are publicly available on thier Websites). The increase is not due to medical supplies inflation or to increased patient volume. It is directly related to the fact that GPOs provide a valuable service to the healthcare industry. The core competency of a hospital is to treat patients, not negotiate discounts with suppliers – this is why hospitals belong to and own GPOs. The one-sided report from the ICCA was commissioned by the Medical Device Manufacturers Association – a disgruntled group that is having a hard time differentiating, marketing and selling their products against more established manufacturers. To be fair and balanced, I suggest you read the studies recently released by Lawton Burns of The Wharton School – completely contradicts the ICCA report.

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