In healthcare, group purchasing organizations (GPOs) are often seen primarily as tools for securing competitive contract pricing and lowering supply costs. While these functions are still critical, GPOs today have evolved into far more valuable allies. By understanding the full extent of GPO partnerships, hospitals and health systems can unlock strategic advantages that strengthen operations, improve clinical outcomes, and enhance financial performance across the organization.
Strategic Sourcing and Custom Contracting
Modern GPOs offer more than access to national contracts. Many provide custom sourcing solutions that reflect local priorities, whether you’re considering a product standardization initiative, a major capital purchase, or supplier consolidation. By engaging your GPO early in the planning phase of large purchases or RFPs, you can benefit from vetted suppliers or aggregated deals they may already have in place, supported by data-driven guidance, benchmarking tools, and market insights.
Spend Analytics and Decision Support
A GPO partnership can give you access to deep, real-time analytics that uncover patterns in spending, utilization, and variation across departments. These insights can reveal cost-saving opportunities, track compliance, and benchmark performance against peer organizations—making them invaluable for budget planning and governance. Requesting quarterly spend dashboards or analytics reports, rather than relying solely on pricing summaries, ensures leadership has the data needed to guide budget discussions and supply chain strategies.
Pharmacy Optimization
From addressing drug shortages to supporting 340B program compliance, GPOs bring more than pricing power to pharmacy management. Many provide access to clinical pharmacist expertise, contracting support, and utilization reviews. Working closely with your GPO’s pharmacy specialists allows you to identify high-cost formulary items and explore clinically appropriate, cost-effective alternatives, such as biosimilars, that can deliver both quality and savings.
Purchased Services and Non-Labor Spend
Purchased services—such as IT, HR, linen, waste management, and food service—often hide significant cost variability due to limited pricing transparency. A GPO can help benchmark, negotiate, and manage these categories, unlocking savings in areas that fall outside the traditional medical-surgical or pharmacy spend. By requesting a purchased services audit, healthcare leaders can uncover untapped opportunities for cost reduction and operational improvement.
Capital Planning and Lifecycle Management
Capital equipment purchases are among the largest investments a healthcare organization makes. GPOs can support every step, from budgeting to total lifecycle management, using national pricing data and supplier relationships to ensure you pay fair market value and maintain ROI over time. Asking about access to GPO capital equipment benchmarking tools provides valuable insight for making informed and strategic investment choices.
Clinical Alignment and Utilization
Clinical variation drives both costs and outcomes. Your GPO can act as a bridge between clinical and supply chain leaders to align on product standardization, utilization tracking, and evidence-based decision-making—resulting in improved care quality and cost efficiency. Leveraging your GPO to facilitate product conversion discussions and engage physician champions helps ensure buy-in and smoother change management.
Education, Networking, and Innovation
Today’s GPOs are also hubs for knowledge sharing and forward-looking solutions. Through peer networks, conferences, and educational resources, they can connect you to trends in healthcare—from supply chain sustainability and diversity initiatives to innovations in AI and cybersecurity. Taking advantage of advisory boards, innovation summits, and leadership forums offered by your GPO ensures your team stays ahead of industry shifts and emerging best practices.
A Strategic Partnership, Not Just a Contract
Leveraging your GPO as a partner is an opportunity to drive meaningful improvements within your healthcare organization. By harnessing the full range of services and expertise your GPO offers, healthcare leaders can elevate the relationship from a simple transaction to a true strategic partnership. This transformation unlocks sustainable gains across operations, clinical care, and financial health—delivering value far beyond traditional supply savings.
