Group Purchasing Organizations (GPOs) have been assisting hospitals, clinics, and other healthcare entities in purchasing supplies and services since 1910. Today, there are over 600 GPOs nationwide, and about 96% of healthcare providers are members of at least one.
By joining a GPO, healthcare providers have access to a list of contracted vendors and are able to purchase supplies and services using a streamlined, hassle-free process. There are a variety of vendors in a GPO that offer products and services ranging from medical supplies to x-ray recycling or medical waste disposal. Many healthcare providers make purchasing decisions based on a committee composed of doctors, nurses, and other members of the hospital/clinic. From there, GPOs are able to understand the needs of the healthcare providers they represent and negotiate with their vendors to devise the best prices for the hospitals and clinics in the GPO.
It is free for healthcare providers to join GPOs and often times, hospitals and clinics are members of multiple GPOs. GPOs make their revenue by charging their vendors administration fees. Some GPOs will even earn revenue from each sale a vendor makes. Healthcare providers are then able to purchase the supplies and services they need at a discounted price. On average, GPOs save hospitals and other providers 10-15% on all purchases which amounts to $33 billion annually.
Here are the top 5 GPOs by number of hospitals based on a study done in 2015 by Becker’s Hospital Review:
- Irving, Texas
- 5,200 health system members and affiliates
- Vizient (formerly known as MedAssests)
- Based out of Alpharetta, Georiga
- 4,500 hospitals
- Intalere (formerly known as Amerinet)
- Based out of St. Louis, Missouri
- 3,488 hospitals
- Based out of Charlotte, NC.
- 3,400 hospitals
- HealthTrust Purchasing Group
- Bentwood, Tennessee
- 1,400 hospitals