Hospitals today cannot afford to overspend or waste resources, yet facilities must stay at the cutting-edge of surgical technology. For hospital administrators, maintaining the facility, managing the staff and coordinating product contracts can become overwhelming. In such cases, many hospital administrators may consider a group purchasing organization for additional support. Additionally with the implementation of healthcare reform, GPOs will be an important component to how healthcare organizations will drive down costs to survive economically.
"The bases for all GPO services are around developing contracts for their members to use. The hospitals are looking for a GPO to provide support for them through contracts and products," says Randy Walter, executive vice president of Amerinet. "Additionally, a lot of GPOs have started looking at other ways to help drive down costs across the enterprise of healthcare providers." Here, Mr. Walter discusses what hospitals should be looking for as they select the appropriate GPO.
1. Contract portfolio flexibility. Hospitals should be aware of how flexible the GPO is with portfolio contracts. If the GPO only offers contracts with a single supplier, this eliminates contract options for a provider and can be problematic if a physician needs/requires products and/or equipment from another supplier. The GPO should be able to offer a flexible contract portfolio with multiple suppliers in the portfolio in order to provide options for the hospital staff. Once the contract is set, the GPO needs to provide tools to ensure the hospitals are billed for the contracted rate based on the GPO contract.
Additionally, some GPOs offer hospital officials the opportunity to draw up a customized contract for working with a product or supplier outside of the GPO's base portfolio. This is an important feature for hospitals administrators wanting to drive savings or meet specific organizational goals in a specific area.
"There are certainly hospitals that like to do their own contract negotiations and maintain their own agreements and Amerinet supports those facilities that choose to take that path. The advantage we can provide is that if an organization wants to do their own contracts they can work on the strategic contract categories for the facility while Amerinet works on the other contracts in areas that are not a high priority for the internal staff," says Mr. Walter. This allows the hospital procurement staff to focus on contracts that are important to their facility and allows Amerinet to be an extension of their internal teams to augment the contracting team.
2. Benchmarking and standardizing capabilities. GPOs offer analytical tools for benchmarking data and exploring revenue improvement options at the hospitals. The reports often use hospital data in order to consider standardization options one example of these standardization efforts might be surgical implant products. The GPO can also examine products purchased in all departments and ensure the products are purchased at the same price across all divisions. If there is variation in the product price, the GPO employs price leveling techniques in order to standardize purchasing.
3. Collaboration potential. It is essential for hospitals to remain competitive within the community which means providing the highest quality of care to the patients as possible. GPOs should provide services that aggregate the best practices from other clients and hospitals around the country and then devise similar plans catering to the individual hospital's situation. In addition to searching websites for information, the GPO should be able to host collaboration events and networking opportunites where clinicians and hospital staff can discuss standardization, patient safety or quality improvement initiatives. These collaboration efforts can be the basis for discussing best practices in helping organizations become ACOs (Accountable Care Organizations).
"A lot of people (hospitals and healthcare providers) are doing some great work and what Amerinet likes to do is be a collaboration point between our members so we can effectively share best practices between members," says Mr. Walter.
4. Understanding physician preference. The GPO must be willing to work with physicians and understand the tools each physician needs for his or her procedures. Many surgeons have a preference in products, such as orthopedic or cardiac implants, and the GPO should be able to coordinate contracts for the specific devices. GPOs can also help the organization write agreements for the products physicians prefer.
5. Energy management program. Some GPOs look past the traditional service of working with hospital contracts to continue cost-saving methods outside of the traditional supply chain in areas such as energy demand. Amerinet for example provides programs that can advise hospital administrators on methods to drive down the demand of energy and develop effective procurement strategies. GPOs should be able to counsel their clients in lighting usage and conduct energy audits for the hospitals in order to save money.
Additionally, the GPOs should work on geothermal energy contracts with heating and air conditioning companies that have high energy star ratings.
6. Labor management education. The ability to maintain an efficient workforce is important for top hospitals. GPOs should provide access to several consulting firms with services for educating and mentoring administrators on employee management. The GPO should also have the ability to analyze the workforce and collaborate with the hospital administrators to coordinate services and educational events, such as webinars, focused on developing an advanced skill set for the managers. Mr. Walter stressed the importance of these online capabilities due to a continued reduction in travel for continuing education.
"During the economic downturn, it's going to be harder and harder for individuals to leave the campus for education," says Mr. Walter.
7. Community needs. Regardless of the savings a GPO has the potential to bring, the hospital administrators should only consider a GPO that fits into the hospital's communal needs. When meeting with potential GPOs, hospital administrators should feel the GPO representative could be a strong partner with the organization, meaning the GPO should make it easy for hospital to identify and resolve issues as well as implement new projects. If the GPO cannot adapt to the hospital staff's needs, the partnership will not be as fruitful as it could be.
"You're seeing a lot of administrators looking for the price in the catalogue, the price in reduction efforts, but they're also looking for a cultural fit," says Mr. Walter.
Learn more about Amerinet.
Read other coverage on GPOs:
- Case Study: Using Data to Standardize Medical-Surgical Supplies in a Large Physician Group
- Healthcare Reform and Its Impact on the Supply Chain: Q&A With Amerinet CEO Todd Ebert
- With Growth Slowing, GPOs Under More Pressure to Show Value
"The bases for all GPO services are around developing contracts for their members to use. The hospitals are looking for a GPO to provide support for them through contracts and products," says Randy Walter, executive vice president of Amerinet. "Additionally, a lot of GPOs have started looking at other ways to help drive down costs across the enterprise of healthcare providers." Here, Mr. Walter discusses what hospitals should be looking for as they select the appropriate GPO.
1. Contract portfolio flexibility. Hospitals should be aware of how flexible the GPO is with portfolio contracts. If the GPO only offers contracts with a single supplier, this eliminates contract options for a provider and can be problematic if a physician needs/requires products and/or equipment from another supplier. The GPO should be able to offer a flexible contract portfolio with multiple suppliers in the portfolio in order to provide options for the hospital staff. Once the contract is set, the GPO needs to provide tools to ensure the hospitals are billed for the contracted rate based on the GPO contract.
Additionally, some GPOs offer hospital officials the opportunity to draw up a customized contract for working with a product or supplier outside of the GPO's base portfolio. This is an important feature for hospitals administrators wanting to drive savings or meet specific organizational goals in a specific area.
"There are certainly hospitals that like to do their own contract negotiations and maintain their own agreements and Amerinet supports those facilities that choose to take that path. The advantage we can provide is that if an organization wants to do their own contracts they can work on the strategic contract categories for the facility while Amerinet works on the other contracts in areas that are not a high priority for the internal staff," says Mr. Walter. This allows the hospital procurement staff to focus on contracts that are important to their facility and allows Amerinet to be an extension of their internal teams to augment the contracting team.
2. Benchmarking and standardizing capabilities. GPOs offer analytical tools for benchmarking data and exploring revenue improvement options at the hospitals. The reports often use hospital data in order to consider standardization options one example of these standardization efforts might be surgical implant products. The GPO can also examine products purchased in all departments and ensure the products are purchased at the same price across all divisions. If there is variation in the product price, the GPO employs price leveling techniques in order to standardize purchasing.
3. Collaboration potential. It is essential for hospitals to remain competitive within the community which means providing the highest quality of care to the patients as possible. GPOs should provide services that aggregate the best practices from other clients and hospitals around the country and then devise similar plans catering to the individual hospital's situation. In addition to searching websites for information, the GPO should be able to host collaboration events and networking opportunites where clinicians and hospital staff can discuss standardization, patient safety or quality improvement initiatives. These collaboration efforts can be the basis for discussing best practices in helping organizations become ACOs (Accountable Care Organizations).
"A lot of people (hospitals and healthcare providers) are doing some great work and what Amerinet likes to do is be a collaboration point between our members so we can effectively share best practices between members," says Mr. Walter.
4. Understanding physician preference. The GPO must be willing to work with physicians and understand the tools each physician needs for his or her procedures. Many surgeons have a preference in products, such as orthopedic or cardiac implants, and the GPO should be able to coordinate contracts for the specific devices. GPOs can also help the organization write agreements for the products physicians prefer.
5. Energy management program. Some GPOs look past the traditional service of working with hospital contracts to continue cost-saving methods outside of the traditional supply chain in areas such as energy demand. Amerinet for example provides programs that can advise hospital administrators on methods to drive down the demand of energy and develop effective procurement strategies. GPOs should be able to counsel their clients in lighting usage and conduct energy audits for the hospitals in order to save money.
Additionally, the GPOs should work on geothermal energy contracts with heating and air conditioning companies that have high energy star ratings.
6. Labor management education. The ability to maintain an efficient workforce is important for top hospitals. GPOs should provide access to several consulting firms with services for educating and mentoring administrators on employee management. The GPO should also have the ability to analyze the workforce and collaborate with the hospital administrators to coordinate services and educational events, such as webinars, focused on developing an advanced skill set for the managers. Mr. Walter stressed the importance of these online capabilities due to a continued reduction in travel for continuing education.
"During the economic downturn, it's going to be harder and harder for individuals to leave the campus for education," says Mr. Walter.
7. Community needs. Regardless of the savings a GPO has the potential to bring, the hospital administrators should only consider a GPO that fits into the hospital's communal needs. When meeting with potential GPOs, hospital administrators should feel the GPO representative could be a strong partner with the organization, meaning the GPO should make it easy for hospital to identify and resolve issues as well as implement new projects. If the GPO cannot adapt to the hospital staff's needs, the partnership will not be as fruitful as it could be.
"You're seeing a lot of administrators looking for the price in the catalogue, the price in reduction efforts, but they're also looking for a cultural fit," says Mr. Walter.
Learn more about Amerinet.
Read other coverage on GPOs:
- Case Study: Using Data to Standardize Medical-Surgical Supplies in a Large Physician Group
- Healthcare Reform and Its Impact on the Supply Chain: Q&A With Amerinet CEO Todd Ebert
- With Growth Slowing, GPOs Under More Pressure to Show Value