Healthcare Group Purchasing Organizations Provide Cost Savings Amid Increasingly Challenging Market Environment, 20th Annual Report Shows

Released today, the report presents an independent survey of policies, procedures, ethical standards, and current developments among healthcare group purchasing organizations (GPOs), including an assessment of best business practices and cost-related issues within the American healthcare supply chain. The survey is conducted annually by ArentFox Schiff LLP. 

A link to the report can be found here.

“From sudden supply shortages and logistical snarls to natural disasters and rapidly evolving trade policy shifts, the challenges facing the American healthcare system and its supply chains continue to impact the quality, availability, and cost of care at all levels,” said former Congressman Phil English (R_PA), HGPII National Coordinator. “Our comprehensive survey shows that GPOs are reprising their historic role as advocates for health institutions of all sizes in today’s highly dynamic system, drawing on institutional experience – and, increasingly, AI technology – to link providers with suppliers of medical goods and services with high standards and competitive pricing.” 

AI and the Healthcare Supply Chain

GPOs continue to pave the way to market for innovative and sustainable medical products, leveraging their purchasing power to create opportunities for suppliers and promote desirable environmental outcomes while limiting patient exposure to hazards. 

For instance, the report discusses the significant potential of AI to transform and benefit the healthcare supply chain. Healthcare GPOs play a critical role within this process given their ability to assess AI tools for their members and vet breakthrough products and new medical technologies. AI has ongoing applications for a wide range of activities that support the operations of GPO networks, including demand planning, inventory visibility and optimization, and disruption forecasting.

Impact of Trade Policy Changes on Group Purchasing

Based on the survey findings, the report concludes that trade policies – including tariffs, sanctions, and other restrictions on international trade – have so far had only a limited impact on prices in the healthcare supply chain and on the operations of GPOs. 

However, this may change if policies remain unstable, with survey respondents citing volatile tariff levies and other policy ambiguities as the cause of complications for supplier cost modeling and pricing.

GPOs Maintain High Standards and Transparency

Finally, the report finds that healthcare GPOs are maintaining active compliance systems aligned with best practices, demonstrating strong commitments to sustaining ethical culture in their operations, and meeting high standards for transparency in their group purchasing practices. Additionally, the HGPII team concludes that GPOs are providing market savings to their customers in the healthcare system.  

“Our findings show that healthcare GPOs are strengthening transparency and accountability at a time when the US healthcare supply chain is experiencing significant distress,” said former Senator Byron Dorgan (D-ND), HGPII National Co-Coordinator. “Persistent shortages, mounting costs, and heightened regulatory scrutiny are testing the resilience of the healthcare supply chain. As stakeholders and policymakers search for solutions, our survey provides timely insight into the obstacles reshaping the industry and the critical decisions ahead.”

HGPII was established in 2005 by nine major healthcare group purchasing organizations (GPOs) that pledged to adopt and implement a set of principles for business ethics and conduct centered on the healthcare supply chain industry. These best practices are shared at the HGPII Annual Forum and independently evaluated annually with the HGPII Annual Report.