What is a GPO?

A healthcare group purchasing organization (GPO) assists in promoting quality healthcare relief and assists diverse providers in effectively managing expenses. A GPO aggregates the purchasing volume of its members for various goods and services and develops contracts with suppliers through which members may buy at group price and terms if they choose to. GPOs typically provide contracted discounts on drugs/biologicals, medical supplies, pharmacy and laboratory. Some of the large GPOs have expanded contract portfolios to also offer discounts on office supplies and non-medical related services.

GPOs submit that their services allow for improved operating margins for healthcare providers, and that members enjoy value added benefits like clinical support, benchmarking data, supply chain support and comprehensive portfolios of products and services to address specific needs.

GPOs vary in their strategy for negotiating discounts with suppliers – from requiring that its members not join other GPOs (exclusivity) to requiring compliance to awarding single source contracts.