Group purchasing: Useful tool or maligned rep?

In short: Both.

Actually, few, if any, can argue realistically against the concept of group purchasing. Economically, fiscally and logically, it just makes sense. Purchasing products in larger volumes should reduce their prices and save you money; the larger volumes come from pooling together multiple purchasers.

This was recognized and understood as a useful tool as far back as the late 1800s in the manufacturing and transportation industries; it debuted in healthcare in 1910.

So if it’s not the function itself earning the bad rep by some, then what is it? The only other option, unfortunately, is the organizations actually doing it.

What about group purchasing organizations (GPOs) bothers some people so much?

More than likely, the bad feelings can be traced to the GPO business models that have emerged within the last 50 years — that is, how some make money and spend money — as well as how they promote themselves and the personalities that have represented them over the years.

Is that fair? Well, um, no. Every business, industry or even social network contains its share of organizations and people that take advantage of others, whether under dubiously legal grounds or questionable ethical considerations. But these examples clearly don’t comprise the majority, nor should they cast aspersions on an entire industry segment rooted in noble causes and populated by people who truly care.

In short, you shouldn’t judge or stereotype an entire industry segment representing $250 billion to $300 billion in annual spending because of a small number of bacterial operators that thankfully haven’t gone viral.

Many GPO professionals take their careers, companies and customers very seriously — and not always in that alphabetical order. To wit, a tiny cadre of snake oil salespeople-types should not needlessly tarnish everyone, convincing the public majority to condemn them all. Such chutzpah! What hubris! And it’s unfair, unfortunate and unfounded.

Readers might criticize some of the media coverage of GPOs as swiveling between grassroots activist progressivism and silver-lined, smoke-filled marketing superlatives.

Legislation, regulations, marketing stunts and political theater temporarily may satisfy knee-jerk emotional responses, but they also can waste copious amounts of resources.

No, both the cause of — and solution to — this challenge burrows much deeper into familiar territory.


Beneath the small number of culprits the industry chastises as GPO opportunists are their enablers propping them up. These provider executives wield their purchasing power to a degree, but also second-guess and minimize their supply chain leaders and professionals, and effectively outsource their control, decisions and market influence because it’s convenient. Then when a smaller non-contract supplier wants to meet to promote its wares those enablers hide behind the specter of perceived GPO commitment mandates — if you’re not on contract you’re not allowed in contact — thereby making the GPO the scapegoat in this passive-aggressive game of flirt-and-skirt accountability.

Yes, some GPOs require compliance to contractual commitment levels or apply pricing tier qualifications to actual purchasing performance. But that control actually hinges on you as the buyer.

Deep down, the provider customer can, must and should control this process and their purchasing power, regardless of financial incentive or fiscal entitlement. Your GPO shouldn’t be used as a gatekeeper when it proves convenient. Such a mindset seems clinically and fiscally irresponsible, short-sighted and transparently naïve. Depending on the specific business model, of course, the GPOs, by and large, work for you and with you, the provider. In those few cases where that model may be flipped, two things are certain: Clinical and operational aims remain congruent, but access and open-mindedness should be universal.



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