H-Source Blog


Savings Beyond GPOs

by H-Source on 05/16/2019

The Healthcare Supply Chain Association (HSCA) commissioned a study on the cost savings and analysis of the group purchasing industry. "GPOs generate savings by reducing costs across sales and supply chains to providers using economies of scale, increased negotiating power, expertise in purchasing high value supplies, and by reducing the administrative costs to providers for purchasing these products."

The study estimates that GPOs will generate hospital and nursing home savings to the entire U.S. health care system of $34.1 billion for 2016 and $197.9 billion for 2017-2021.

Nearly all hospitals use at least one GPO to negotiate contracts and minimize purchasing costs. Still, hospitals have financial concerns. Supply chain will soon overtake labor as the number one overall expenditure, making it a target for continued scrutiny and new cost-saving measures.

Even with consolidated buying power and negotiated pricing, hospitals and nursing homes are still challenged with overstock and excess supplies for a variety of reasons, including the abandonment of physician preference items when physicians leave, product outdates and conversions, and restrictive manufacturer return policies, to name a few.

By collaborating to buy and sell excess supplies, devices, equipment, and pharmaceuticals directly with each other, hospitals can reduce spend and recover costs while minimizing supply chain waste. H-Source provides a cloud-based platform that makes this easy and streamlined, easing the burden on already busy staff.

Request a demo to see how H-Source can help you gain efficiencies in supply chain.

View "A 2018 Update of Cost Savings and Marketplace Analysis of the Health Care Group Purchasing Industry" commissioned by the Health Care Supply Chain Association.