New Survey from the American Hospital Association Shows Hospitals Rely on GPOs to Reduce Costs & Ensure Patient Access to Life-Saving Products

The Healthcare Supply Chain Association (HSCA) and its group purchasing organization (GPO) members are applauding the release of a new independent survey from the American Hospital Association (AHA) and the Association for Healthcare Resources & Materials Management (AHRMM) which found that hospitals rely on GPOs to reduce costs, that hospitals are overwhelmingly satisfied with their GPOs, and that GPOs increasingly offer services beyond traditional chain management to help meet hospital needs.

The survey, whose lead author is a professor from the Department of Health Care Management at The Wharton School of the University of Pennsylvania, polled more than 1,200 hospital supply chain executives for their perspectives on GPOs and asked them to evaluate their GPOs based on a series of performance and utilization measures.

“The American Hospital Association survey reaffirms that hospitals rely on their GPO partners to be critical cost-savings engines and to help source life-saving medical products for the patients they serve. Hospital purchasing executives are sophisticated shoppers in a competitive market and they continually turn to GPOs to help deliver the best products at the best value,” said HSCA President Curtis Rooney. “Hospitals are facing mounting pressure to bend the healthcare cost curve. Every GPO offers a unique value proposition and competes with other GPOs for hospital business, to further reduce hospital costs and to help meet evolving hospital needs.”

“This important report shows GPOs provide a valuable service for the hospital field,” said AHA Executive Vice President Rick Pollack. “By helping them manage supply costs, hospitals utilize GPOs as a very important tool in their supply chain toolbox.”

Top-line findings of the AHA/AHRMM survey include:

  • Hospitals are overwhelmingly satisfied with their GPOs. Approximately 90 percent of all hospital respondents reported being satisfied or very satisfied with their national GPO; 
  • GPOs reduce hospital costs. 88 percent of hospital respondents agreed or strongly agreed that GPOs reduced costs through lower product prices;
  • The role of GPOs is increasing. Two-thirds of respondents agreed or strongly agreed that the role and impact of their national GPOs has grown over the past five years;
  • Hospital satisfaction has translated to long-term GPO relationships. In 2014, the average tenure of a hospital with its national GPO is roughly 11 years, which is an increase over the 2005 average of roughly 9 years;
  • GPOs are expanding services to meet hospital needs. Although hospitals continue to lean heavily on GPOs for producing cost savings, GPOs have also expanded their offerings to help hospitals with services beyond supply chain management, including clinical improvement and value analysis activities. 
“In terms of performance, the national GPO succeeds most in obtaining price discounts and achieving savings via lower product prices. Such savings come about through lowest market pricing, contract standardization, and provision of the market pricing point. They also contribute to savings via rebated administrative fees and information technology,” said the AHA report authors.

To read the full AHA/AHRMM report, “Hospital Supply Chain Executives’ Perspectives on Group Purchasing: Results from a 2014 National Survey,” click here.

To read a literature review evaluating the performance of GPOs, click here

To read the full AHA survey press release, click here.


Final Day of the Healthcare Supply Chain Expo

Today the Healthcare Supply Chain Expo comes to a close, but not before two great sessions are offered at the JW Marriott in Washington, DC.

The opening session is a state of the industry panel featuring top executives from group purchasing organizations (GPOs) and healthcare suppliers. Former Amerinet President and CEO Bud Bowen will moderate the panel, which includes Presidents, CEOs and Chairman from industry leaders BD USA, Dynatronics, Amerinet, Premier, Johnson & Johnson and Bracco Diagnostics.

Discussion on this panel will focus on the relationship between suppliers and GPOs and how to strengthen business practices. The experts will also address how healthcare reform legislation has influenced the industry, and look toward what lies ahead for the healthcare supply chain.

Following this session is the final event of the Expo, a segment concentrating on how to further promote transparency and ethics in the supply chain. This analysis will bring up pertinent issues affecting ethical business practices in the supply chain, and explain how to best manage them.

Moderating this session is former U.S. Senator Bob Bennett. Contributing to the panel is former Pennsylvania Congressman Phil English, who is a coordinator for the Healthcare Group Purchasing Industry Initiative (HGPII), as well as Terry Chang, MD, JD, the Associate General Counsel and Director of Legal and Medical Affairs for AdvaMed.

Mike Copps, the Executive Director of the Healthcare Industry Supply Chain Institute (HISCI), the organization co-hosting the Expo with the Healthcare Supply Chain (HSCA), will deliver closing remarks.
To see a full schedule of events for the final day of the Healthcare Supply Chain Expo, click here.  


HSCA Announces ‘Total Visibility Project” to Improve Patient Safety and Increase Accessibility and Accuracy of Medical Product Information

The Healthcare Supply Chain Association (HSCA) today announced the launch of the Total Visibility Project at its annual Expo in Washington, DC.

The new program, which HSCA’s Committee for Healthcare eStandards developed in collaboration with GS1 and the Healthcare Industry Supply Chain Institute (HISCI), is a data synchronization best practice for product information that will improve the accuracy and accessibility of product information available to the healthcare supply chain. As part of the program, suppliers may publish a set of common, minimum product attributes to the Global Data Synchronization Network (GDSN), which will then be immediately available to GPO hospital and provider members.

“The Total Visibility Project will help ensure that hospitals and healthcare providers have timely access to reliable product information, and that the right product gets to the right patient at the right time,” said HSCA President Curtis Rooney.

To provide hospitals access to accurate product data information, HSCA and its GPO members engage in data synchronization through the Global Data Synchronization Network (GDSN). The GDSN is an automated, standards-based global environment for the electronic transfer of standardized product information between trading partners. The GDSN helps enable secure, continuous data synchronization over time. The Total Visibility Project will enable an initial one-time publication of product data for all participating GPOs and their hospital and provider members. GDSN Certified Data Pools also play an important role partnering with GPOs and suppliers in assuring data verification and continuous synchronization of updates. 

To read more about the Total Visibility Project, read the HSCA press release here.

Day 2 at the Healthcare Supply Chain Expo: Workshops, Panels & Presentations.

Day two at the Healthcare Supply Chain Expo kicks off with a keynote presentation from Siobahn O’Bara, Senior Executive Vice President at GS1 US. O’Bara will discuss the importance of standards in regulating the supply chain.

A healthcare panel will follow this presentation, where industry experts will report on key issues such as the Drug Quality Security Act, unique device identifiers, and meaningful use.  The panel includes Dirk Rodgers, a consultant and founder of; Karen Conway, the Industry Relations Director for GHX; and Jim Scott, President and CEO of Applied Policy. This session will be moderated by Healthcare Supply Chain Association (HSCA) President Curtis Rooney. 

This group will subsequently lead a breakout roundtable conversation that will give the audience a shot at a voicing their questions or comments. The half day workshop concludes with a panel discussion lead by senior executives at HDMA and AHRMM, who will offer their perspectives on the morning’s presentations and tie in how each relates to the supply chain.

Make sure to take advantage of the networking lunch and reverse tradeshows before attending the next session, which provides lessons on leadership from the Bellwether League. The panel will explain how to navigate the perpetually changing marketplace and why leadership is paramount in the healthcare supply chain. All panelists are Bellwether League honorees or are on the Board of Directors, and each has a keen understanding of the industry. 

Next, leading health policy research firm Applied Policy will present the findings of their latest report, “GPOs: Helping to increase Efficiency and Reduce Costs for Healthcare Providers and Suppliers.” The session will include a panel of GPO senior executives from Novation and Premier, Inc., as well as a healthcare expert from Venn Strategies. The discussion will be moderated by Applied Melissa Andel.

Today will provide Healthcare Supply Chain Expo attendees many opportunities to network, learn from healthcare experts and understand the newest and best methods for success in the industry. 


Healthcare Supply Chain Leaders Kick Off 2014 Expo in Nation’s Capital

Healthcare experts, group purchasing organization (GPO) executives and leading policymakers are coming together today at the JW Marriott in Washington, DC to kick off the Healthcare Supply Chain Expo. The Expo runs through Friday, October 17, and will provide attendees an inside look at how the industry’s most important business and policy decisions are made while also offering extraordinary educational and networking opportunities.

Opening remarks will be given by Healthcare Supply Chain Association (HSCA) President Curtis Rooney, followed by welcomes from CEOs Jody Hatcher of Novation and Todd Ebert of Amerinet. Delivering the keynote address this morning at 10:15 AM is the former Governor of Mississippi, Haley Barbour. Barbour will share his insights on healthcare and use his unparalleled knowledge of the political landscape to deliver hard-hitting policy analysis—all while blending in his trademark Southern charm. This 45 minute address is sure to be both informative and entertaining, and will set the Expo in motion for a great week.

Following Governor Barbour’s keynote, a state of the GPO industry panel will be held. The session will include executives from GPOs and hospitals, including MedAssets, Advanced Care Pharmacy, the Greater New York Hospital Association (GNYHA), Broward Health, Novation, Intermountain Healthcare, Amerinet and Parkview Health. Gary Gustafson, President of Preferred Marketing Solutions, will moderate the executive panel. They will focus on how each organization likes to do business as well as describe industry best practices. Further discussion will involve healthcare reform and how it has impacted the industry, followed by a lively Q&A session.

Rounding out the first day of the Expo are presentations from healthcare consultant Harry Glorikian and SSB Solutions CEO Dr. Jacque Sokolov. Glorikian will talk about the future of supply chain technology and explain how innovations in this realm can affect both business and care. Sokolov will discuss how to optimize fee-for-service medicine as the country transitions to value-based care and reimbursement.

Throughout all of these enlightening panels, other activities such as reverse tradeshows, roundtables, networking events and receptions will be available for attendees.

For more information on the Expo, click here, or follow HSCA on Twitter here


Guest Post: 2014 Expo Panelist Harry Glorikian on a Health Cost Turning Point—How Payers are Getting Creative

There is a transformational shift occurring in our healthcare system. The days of a fee-for-service structure are subsiding and we now see a movement to a value-based payment system that rewards good outcomes. This movement is not happening quickly enough, however, which is why the following tactics are being used by payers to innovate healthcare and accelerate this shift. 

One major tactic is reference-based pricing—a method where the payer determines a fair price for a procedure and the patient covers the difference if they prefer an operation that costs more. This strategy is a real game changer because it fosters competition among providers and encourages patients to find the most cost effective deals. Another tactic is setting standards of care, such as WellPoint’s recent initiative that convinces doctors to treat cancers according to evidence-based standards. This helps patients receive better quality care and often results in less expensive treatments. There has also been a surge in limited network health plans, which offer substantial appeal to small businesses or individuals because premiums for such plans are between 10 to 25 percent lower than traditional plans. 

What makes each of these tactics more likely to succeed than past attempts at moving toward a value-based system is that each promotes competition based on cost and value. Payers see the benefits of this focus, but now even patients are beginning to realize how this comes into play for healthcare decisions. Additionally, these strategies help eliminate unnecessary services that account for almost half the estimated $750 billion the U.S. wastes annually on healthcare. This increases efficiency and streamlines treatments, an important step in reaching the ultimate goal of healthcare reform: Improving patient outcomes. 

I recently explored these concepts in greater detail in “A Health Cost Turning Point? Payers Get Creative – The Reboot Part 2,” the full text of which you can find here.

Harry Glorikian is a healthcare consultant and a guest speaker at this year’s Healthcare Supply Chain Expo, presenting on “Innovation in Supply Chain Technology,” October 15, 2014 at 3:15 PM. Register here  for the Expo to see Harry’s presentation and many others.