What is a GPO? History & Evolution of GPOs in the Healthcare Industry
In the last few years, GPOs or Group Purchasing Organizations have become increasingly popular in UAE’s healthcare industry. However, the concept of GPOs has been around for over a century now.
So what is a GPO and how does it make a difference to your healthcare quality and costs? Let’s take a look.
What Is A GPO?
In the healthcare industry, a Group Purchasing Organization (GPO) is an entity that helps hospitals, clinics, and nursing homes save costs on the supplies of equipment they need to deliver care to their patients. They do so by combining the purchasing power of its members, to negotiate better pricing and terms of sale with suppliers or manufacturers.
For instance, Bridge Medical Group Purchasing is an entity that will enter into a GPO contract with different medical equipment suppliers in the UAE and stipulate terms, conditions, and pricing under which products or services will be sold to its members.
GPOs take over the administrative burden of negotiating purchase contracts on behalf of members for a fee, which can be easily offset by cost savings on procurement at discount prices.
Hence, a GPO contract can enable a leading GPO purchasing organization like BMGP to help reduce costs, improve margins, optimize supply chain operations, and curtail operating expenses (OpEx) in healthcare.
History Of GPO In The Healthcare Industry
The earliest GPOs in healthcare can be traced back to the United States of America (USA) in the early 20th century. Around this time, hospitals and other healthcare providers began recognizing the potential benefit of pooling their purchasing power to reduce procurement costs.
The Hospital Bureau of New York was the first GPO purchasing organization to be set up in 1910. These early entities were pretty informal and largely local, but they laid the foundation for developing a more formal GPO structure that we know currently.
The real growth of GPO in healthcare did not happen until the 1960s when the US federal government started pushing for health programs such as Medicare and Medicaid. These programs provided health insurance for the elderly and the poor, thereby increasing procurement costs for medical supplies, equipment, and services.
As a result, the Hospital Cooperative Purchasing Program (HCCP) was established by the Department of Health, Education, and Welfare (HEW) in 1972. Apart from this, Hospital Corporation of America (HCA) also emerged as a leading GPO that helped negotiate discounts on medical products and supplies in the early 1970s.
By the end of the decade, the concept of GPO in healthcare became popular across the United States, and was later adapted by the rest of the world. BMGP is a testament to how GPOs have become an important part of the healthcare industry, bridging the gap between healthcare providers and medical equipment companies in Dubai.
Evolution Of GPO In The Healthcare Industry
Group Purchasing Organizations (GPOs) in healthcare industry have come a long way from the early 1970s. Here’s a brief look at the timeline of its evolution over the past few decades:
- Rise of the early GPOs: During its formative years in the 1970s, hospitals and other healthcare providers in the United States started forming informal cooperatives to reduce their procurement costs.
- Emergence of formal GPOs: The concept of GPO in healthcare became more formalized in the 1980s and 1990s. Hospitals and other healthcare organizations started joining national GPOs and entered into a formal GPO contract which ensured discounted pricing on medical products and supplies.Apart from these, other services such as supply chain management, data analysis and educational resources were also being offered by GPOs to its members.
- Consolidations of GPOs: The GPO market started becoming more consolidated around the 2000s. Large GPOs started acquiring smaller ones to broaden their reach across regions in the United States.
- Globalization of the GPOs: In the last decade, GPO in healthcare industry has become popular around the world, including in the UAE.
Benefits Of GPO In UAE
GPO in healthcare such as Bridge Medical Group Purchasing are becoming very popular with healthcare providers in the UAE. Members can benefit from:
- Cost savings due to negotiated terms and pricing, as a result of consolidated purchasing needs.
- Optimized supply chain management due to access to a wider range of vendors and suppliers.
- Standardized use of medical products and supplies, resulting in improved quality at discounted pricing.
- Access to data analysis and resources, which can help healthcare providers stay up-to-date on the latest products and technologies, as well as best practices for procurement and supply chain management.
- Any chance of risk is mitigated by GPOs, which ensure that products and service meet regulatory standards and quality checks.
Apart from saving costs, a leading GPO purchasing organization in UAE such as BMGP can help healthcare providers improve the quality of care to patients by ensuring access to high-quality products and supplies. They also provide valuable insights to help them make informed procurement decisions and improve operational efficiency.
GPOs in UAE will likely continue to grow and soon become indispensable to the country’s healthcare set-up.
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