September, 2013:

Healthcare Supply Chain Costs & Group Purchasing Organizations-GPO’s

Healthcare supply chain costs and its relationships with group purchasing organizations (GPO’s) are a trending point of interest specifically as it relates to an institution’s revenue cycle.  There are hundreds of GPO’s to select from to help reduce the expense of medical supplies, surgical supplies, office supplies and pharmaceuticals but there are particulars points of interest that should be researched to help optimize cost savings prior to finalizing and signing a contract with a GPO.

 Below are few helpful tools to help assist clients in selecting a GPO:

 Size and reputation of the GPO

  • How many clients does the GPO represent?
    • The larger the size of a GPO does not mean the greater their ability to achieve greater cost savings for your institution. The ability to achieve greater cost savings is dependent upon your institutions volumes of products and purchasing those items within the GPO. Additionally, you should also obtain references of the GPO from other institutions who obtain their services.


  • Who are the GPO’s strongest vendor relationships with to help reduce cost?
    • Sometimes the larger the vendor is not equal to the quality of care the providers of an institution want to provide to their patients.  An example might be a particular suture or a type of surgical instrument.  It might be helpful to set up a clinical group to discuss the products that are offered by a vendor through the GPO relationship to see if they fit the clinical mission statement of your institution.
  • Are the vendor relationships in your back yard?
    • It can be very beneficial to have the vendor of a GPO located close to your institution. Delivery of products can be expedited, the cost of shipping can be reduced and a strong relationship with the vendor representative can be established.


  • What type of monthly, quarterly, bi-annual and annual informatics do they provide?
    • As in any relationship, communication is key; it is essential to have consistent communication between your institution, GPO, Primary and Secondary vendor.  Informatics should be provided on a monthly, quarterly, bi-annual and annual basis. 
    • Informatics helps the GPO, Primary and Secondary vendor know that you’re monitoring what they’re doing as well as allowing the institution to know what trends are occurring industry wide as well as the spending trends of your own institution. 


 The process of selecting a GPO can be long and tedious, however; in the end the cost savings will help your institution’s bottom line and provide a healthier and more stable relationship between the purchasing department and accounts payable department in relation to the standardization of vendors and the reduction of outside vendors. 


GE Clients : Prepare for ICD-10

ICD-10 requires the healthcare community to capture information at more granular and accurate levels to better represent what’s going on with the patient diagnostically and procedurally.  It enhances precise communication throughout the continuum of care and focuses on outcomes.

For GE applications, ICD-10 will require changes to every asset utilized to bill and collect for patient services including but not limited to TES, Claims Manager, and BAR.

 Below are examples of how GE clients can prepare for ICD-10:

  • System updates and/or upgrade (ex. Medcin, SNOMED, templates, TES & Claims Manager, electronic and paper claims/remits, and reports)
  • Interface modifications & testing
  • Physician documentation training
  • HIM and coding training
  • Revenue cycle staff training
  • Unit testing
  • Integrated testing:  interfaces, clearinghouses, EDI partners
  • Modifications to reports (DMBS, AES, month-end reports)


The plethora of government regulations and initiatives has challenged organizations to prioritize where to invest their limited resources. Programs including 5010, Meaningful Use, Healthcare Reform and Accountable Care Readiness are all important, however none of these presents a greater risk to your organization’s cash flow than ICD-10.