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Any Medical Practice Can Join a Group Purchasing Organization (GPO)

November 9, 2016

GPOIt’s hard to deny that profit is getting pinched in most small and medium-sized medical practices today. Lower reimbursements, more regulatory and compliance red tape—all make it more difficult to grow your bottom line by boosting revenue alone. The changes have to come from lowering your operating expenses. 

That’s where Group Purchasing Organizations (GPOs) come in. Here’s what you need to know about GPOs and your medical practice—and why it makes sense to join one if you can. 

Exactly what is a GPO?

Simply put, a GPO is a collection of businesses who voluntary associate in order to leverage their group purchasing power to achieve discounts on the goods and services they need. Large practices who associate with a major hospital or health care network automatically get the benefit of that organization’s purchasing power, but for smaller practices, it’s difficult to achieve these economies of scale, meaning that they are often squeezed on costs for supplies and services in a way that erodes their bottom line. 

A GPO can be organized in three main ways:

  • A master buyer, which handles the vendor contracts for all members in the group. 
  • A vertical-market group, in which several organizations in the same industry band together to bargain for supplies and services. 
  • A horizontal-market group, which is organized around businesses in different industries that all use similar types of supplies. 

Most medical practices who join a GPO choose the vertical market model. 

What are some advantages of joining a GPO for medical practices?

If you’re in charge of procuring supplies and services for a smaller medical practice, you already know some of the biggest challenges. Here are three ways we’ve identified that GPOs make a difference for all but the largest health care provider groups:

  1. Doing the legwork to identify the most reliable suppliers and the best prices. As an administrator or medical clinic manager, your inbox is probably filled with information and offers from suppliers of everything from cleaning supplies to highly specialized medical equipment. Sorting through them is time-consuming and confusing—prices and inventory change, credit policies are convoluted. A GPO has the manpower and expertise to sort through all vendor offers and continually evaluate them for best prices and service guarantees. They even have connections with suppliers of hard-to-find items you may need for a specialty practice. 
  2. Leveraging purchasing power and insider market knowledge to get the best prices and service options. Due to the volume of products and services a GPO purchases, it can negotiate better prices—and it can leverage the power of the book of business it represents to wring out even more vendor concessions for in-demand supplies. Their managed volume also gives them unique insight into market data to help them predict and identify trends that may affect the price and availability of items commonly purchased for the members of the group. A GPO manages all the procurement issues, ensuring that a steady inventory is available and that no costly duplications or unnecessary purchases are made. 
  3. Handling compliance with all state and federal regulations. GPOs have legal talent on staff to review all procurement policies and issues and to ensure purchases comply with any relevant laws and statutes. This is especially important for health care providers, who operate under an extremely strict and complex regulatory regime. 

We were able to take advantage of the purchasing power of the large group of clients we represent, and saving our customers up to 40% or more on frequently used supplies and services. Call us today if you’re looking to save money on your medical and office supplies as well.


Joining GPO to enjoy these savings has no minimum, no obligation or commitment. And cost to join is absolutely nothing!

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