Group Purchasing Organizations (GPOs) can help leverage the purchasing power of hospitals and health systems, among others, to obtain discounts from vendors based on the collective buying power of the GPO members. They also save hospitals and health systems the legal and contracting work of developing contracts with hundreds of different vendors.
Similar to other healthcare market segments, GPO consolidation is increasing. Recent examples include:
HealthTrust recently completed the acquisition of Resource Optimization & Innovation (ROi), a recognized leader in healthcare supply chain management. ROi was the exclusive GPO for Mercy and other ROi partner members Orlando Health, Inc. and Franciscan Missionaries of Our Lady Health System.
ROi acquired Healthcare Purchasing Alliance, LLC (HPA), a member-driven organization dedicated to providing clinical quality and cost savings through health care group purchasing organization (GPO) services. HPA, previously owned by Orlando Health and South Lake Hospital, became a wholly owned subsidiary of ROi, operating as a separate entity to manage HPA’s legacy contract portfolio and provide custom contracting solutions throughout the continuum of care for ROi.
Premier recently acquired Acurity, Inc. and Nexera, Inc., two indirect wholly owned subsidiaries of the Greater New York Hospital Association (GNYHA). Acurity, a regional group purchasing organization, has been a customer and strategic partner of Premier for more than 24 years.
Nexera, a hospital financial improvement consulting firm, partners with healthcare organizations to improve hospital and health system performance, with a significant focus on supply chain enhancement and transformation.
Takeaway: GPO consolidation is increasing under the backdrop of Amazon’s possible role in the industry