What is a GPO?
A group purchasing organization (GPO) is an entity that helps organizations in various markets realize savings and efficiencies by aggregating purchasing volume and using that leverage to negotiate discounts with manufacturers, distributors and other vendors. CHV has partnered with Provista, one of the nation’s largest group purchasing organizations, with more than $43 billion in annual purchasing power.
What types of services do GPOs provide?
Organizations from all industries are increasingly relying on GPOs to help manage the complex system of purchasing. Many GPOs offer various solutions to help manage their purchasing.
GPOs provide a unique mechanism for organizations to coordinate not only their purchasing power, but also their brain power. By drawing upon their broad-based memberships, GPOs give individuals from similar organizations a pathway for evaluating new products and services.
Are there different types of GPOs?
If you’ve seen one GPO, you’ve really only seen one GPO, as they vary greatly in size, type of ownership and the services they offer their members. Some GPOs are owned by hospitals, while others do not have such a link to the facilities they serve. Some GPOs only serve not-for-profit organizations, while others serve just proprietary facilities, and some serve a mix of the two. Some GPOs offer members the ability to purchase nearly every conceivable type of product, while others focus on specific product categories. In addition, some GPOs specialize in certain markets.
Our GPO partner, Provista provides performance improvement services to nearly 70,000 members in the health care, education, corporate and hospitality markets. Provista is owned by VHA and its contracts are managed by Novation, the nation’s largest group purchasing organization.
How many GPOs are there in the U.S.?
There are more than 600 organizations in the United States that participate in some form of group purchasing. About 30 of the 600 are very large GPOs that negotiate sizeable contracts for their members. The remaining organizations may offer their members access to larger groups’ contracts and negotiate agreements with regional vendors for some services. ViP/Provista and its supply contracting company, Novation, represent the largest purchasing volume of any group purchasing organization in the country with nearly $40 billion.
What are the benefits of group purchasing?
Because GPOs represents many facilities, they are able to offer economies of scale to the members that they serve. By aggregating the purchasing power of many organizations, GPOs help balance the negotiating equation between purchasers and vendors.
GPOs produce substantial savings by removing costs from across sales and supply chains, not by simply contracting for the cheapest products. GPO members receive financial benefits through up-front pricing discounts, patronage dividends and distributions, and reduced administrative costs.
In addition, GPOs provide valuable cost-avoidance savings to organizations by helping them standardize and streamline their purchasing, as well as reduce the number of staff that facilities must employ to negotiate purchasing contracts.
Who is the largest GPO?
Novation, Provista’s supply contracting company, is the largest group purchasing organization in the country with more than $43 billion in annual purchasing volume. Provista members benefit from the power of Novation and receive industry leading pricing on the broadest portfolio of products and services available.
What is the cost to me to be a ViP member?
Nothing! Unlike other group purchasing organizations, ViP/Provista does not charge a membership fee. There is no cost to join and begin accessing the powerful competitive advantage of ViP’s contracts.
If ViP doesn’t charge a membership fee, how do you make money?
ViP relies on fees paid by vendors to finance the services we provide to our members. These contract administrative fees are generally based upon the purchase price that the member pays for a product purchased through a GPO contract. There is no cost to join ViP and membership participation is completely voluntary.
Do the suppliers charge me more by going through Provista instead of direct from them?
Absolutely not – you will actually pay less than going direct to a supplier. Since ViP is able to leverage the purchasing power of all of our members, suppliers see value in partnering with us to offer our members a lower price. In addition, ViP and its supply contracting company Novation are taking aggressive measures to help members reduce overall supply expenses and ensure that the value received from contracts remains best-in-class.
Enrollment in ViP is free and easy. To learn more about ViP and to help get started, contact:
Toll Free: 1-888-299-0324