Joe Romano President, Sapient Health GPOs Joe Romano President, Sapient Health

GPOs – Purpose and History GPOs have long played an important role in the provision of health care services. Pressure to reduce case costs and general expenses industry wide have led many hospitals and ASCs to GPOs to reduce the costs of products and services. The vast majority of Hospitals and hundreds of ASCs belong to at least one GPO The purpose of a GPO is to allow members to join purchasing strength to leverage pricing on goods and services.

GPOs – Purpose and History This enables members to cut costs and become more competitive in the provision of their own services. This also allows providers to operate more cost effectively without having to sacrifice quality. Over the years, GPOs themselves have evolved to offer a greater suite of services to their members such as benchmarking tools, educational material for staff and doctors, Quality Improvement programs, inventory management system, and networking opportunities These programs are procompetitive and consistent with Anti-Trust policy These programs offer opportunities for members to potentially increase efficiency, cut back on administrative duplication, increase competition between vendors and manufacturers, which should in turn translate into higher quality and lower prices for consumers. GPOs historically have saved hospital and ASCs between ten and fifteen percent of what they otherwise would have spent if they had contracted locally.

Maximizing your GPO The first step in Maximizing your GPO is finding a primary and secondary GPO that are complimentary Understand your total spend prior and establishing savings projections based off of GPO contracts It is extremely important to VERIFY your GPO contract connections Customize your GPO contract portfolio to suit your site Evaluate contract performance and have an open line of communication with your GPO representative

Understanding your supply spend Important to determine where your spending is concentrated Run a descending dollar report Run an A/P report broken down by Vendor Request a usage report from your GPO rep Request spend reports by distributer Need to determine which vendors are volume drivers and which are cost drivers Evaluate alternatives, compare contracts Communication is critical!

Ancillary benefits Inquire about all the programs your GPO offers Take advantage of all the tools they provide Maintain regular communication with your GPO rep Put them to work, GPO can provide some excellent reports Sign up for group buys Scrub contracts for any rebate programs