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GPO survival strategies.
1Health Services Corporation of America, Cape Girardeau, MO, USA.
Journal of Healthcare Resource Management
|February 6, 1997
Summary
To succeed in the consolidating healthcare market, traditional group purchasing organizations (GPOs) must prioritize five key areas: contract negotiation, electronic data, staffing, value-added services, and equity. Focusing on these ensures GPO survival and growth.
Area of Science:
- Healthcare Management
- Supply Chain Optimization
- Health Economics
Background:
- The healthcare market has undergone significant consolidation over the past 20 years.
- Most healthcare providers now participate in a limited number of group purchasing organizations (GPOs), either alliance-based or national.
- This consolidation presents challenges and opportunities for traditional GPOs.
Purpose of the Study:
- To identify critical factors for the survival and success of traditional GPOs.
- To provide actionable strategies for GPOs operating in a consolidating market.
Main Methods:
- Analysis of market trends in healthcare provider consolidation.
- Identification of key operational and strategic elements for GPO success.
- Discussion of five essential issues for GPO adaptation.
Main Results:
- GPOs must focus on five core areas to remain competitive.
- These areas include: negotiating agreements, managing electronically-formatted contract information, optimizing sales force and support staff, developing value-added programs, and considering equity ownership.
Conclusions:
- Adaptation is crucial for traditional GPOs facing market consolidation.
- Strategic focus on the five identified issues can lead to GPO survival and prosperity.
- Implementation of suggested strategies is recommended for GPOs.