Health care organizations face the balancing act of managing supply chains and controlling costs while maintaining quality care provide ongoing challenges. Group purchasing organizations (GPOs) offer hospitals and health systems a way to counteract rising medical supply costs and supply chain disruptions.
But health care leaders are looking for more from their GPO in 2025. They crave technology and data to drive financial insights and value analysis. Forward-thinking GPOs will deliver more than just savings — they will transform your supply chain into a strategic business function.
>> Here’s how Advantus differs from your typical GPO >>
What is a GPO in health care?
GPOs serve as strategic partners for health care providers, leveraging collective buying power to secure better pricing and terms for medical supplies, equipment and services. With approximately 97% of U.S. hospitals now utilizing GPO contracts for their purchasing needs, these organizations have become fundamental to modern health care operations.
Core benefits of joining a health care GPO
Sustainable management of cost
The most immediate and tangible benefit of GPO membership is significant cost reduction. Through consolidated purchasing power, GPOs negotiate favorable contracts with suppliers, typically delivering savings of 10-18% across various spending categories. These savings extend beyond just product costs:
- Bulk purchasing advantages apply across a wide range of supplies and equipment.
- Pre-negotiated contracts eliminate the need for individual price negotiations.
- Streamlined purchasing processes reduce administrative overhead.
- Smaller facilities benefit from volume-based discounts they could not otherwise access.
Reduce purchasing risk
In an era of supply chain volatility, GPOs provide crucial risk management benefits. Their diverse supplier networks and intelligence enhance supply chain resilience. Thorough vendor vetting and ongoing performance monitoring ensure products meet high standards of quality care. Health systems can also leverage a GPO’s expertise in regulatory compliance and documentation.
Operational advantages
Modern GPOs offer far more than just purchasing support. They provide comprehensive operational solutions that transform supply chain management:
- Streamlined procurement processes: Automated ordering systems, consolidated billing and simplified contract management reduce administrative burden and improve efficiency.
- Inventory management solutions: Advanced tracking systems and demand forecasting help optimize inventory levels and reduce waste.
- Data analytics and spending visibility: Detailed spending analysis and benchmarking tools provide insights for better decision-making.
- Access to industry best practices: Shared knowledge and standardized procedures improve operational efficiency.
Strategic value beyond traditional purchasing
Modern GPOs have evolved to offer better intelligence and comprehensive consulting services. Select GPOs like Advantus have become essential partners for health care providers seeking to optimize their operations and control costs while maintaining quality care. The benefits extend far beyond simple cost savings, encompassing comprehensive support for supply chain management, operational efficiency and strategic planning.
Clinical transformation
- Clinical advisory teams
- Evidence-based product evaluation
- Best practice guidelines and value analysis
- Quality improvement initiatives
Purchased services optimization
- Management of large cost categories
- Specialized knowledge in a wide range of product categories
- Vetted partners for hospitality, transport, nutrition, EVS, HTM and more
Sustainability
- Waste reduction and reprocessing programs
- Sustainability metrics to achieve ESG goals
- Savings through sustainability
Insights and technology
- Custom analytics dashboards
- Benchmarking and market intelligence
- Actionable insights
Getting started
Consider these first steps to help you evaluate potential GPO partners:
- Assess your organization’s specific needs and challenges. What does your supply chain need beyond cost savings?
- Research potential partners’ service offerings and specializations. Do any of them have deep expertise in your areas of need?
- Check if a GPO requires an exclusivity agreement, which can limit your ability to use secondary GPO partners for best-in-class programs.
- Consider long-term strategic alignment. Is this a partner that can deliver strategic value beyond traditional GPO purchasing?
Contact our team today to learn more about how Advantus’ GPO can help your health care organization transform its supply chain into a strategic driver of success and resilience.
