Group Purchasing Organizations in Veterinary Medicine

By VHMA Admin posted 09-25-2020 22:49

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Group purchasing organizations (GPOs) help member organizations save money on the purchase of drugs, medical supplies, and other items by aggregating purchasing volume to negotiate discounts with vendors. The primary benefit for most practices is the lower prices, but some GPOs also offer practices resources such as continuing education, marketing services, a peer community, and more. There may be limitations to using GPOs, such as the requirement for a minimum purchase quantity, the inability to get all desired products through the group, and exclusivity arrangements. The September Insiders’ Insight survey asked managers about their participation in GPOs and the benefits.

Eighty percent of responding managers indicated that they belong to a GPO.

About 43% of the practices that are members in a GPO just belong to one group while the others belong to 2 or more. Most GPOs do not bar participation in groups outside of their own.

More than half of those practices that belong to GPOs have done so for 4+ years; the rest have joined within the last 0-3 years.

When asked which GPO do you belong to, managers responded:

35.29% - PSIvet
31.18% - Veterinary Growth Partners
30% - VMG
24.12% - MWI
21.76% - The Veterinary Cooperative
15.88% - AAHA Advantage
4.12% - Veterinary Hospitals Association
2.35% - Verticalvet   
1.76% - The Veterinary Club

Most practices that belong to a GPO are making a significant (>50%) of their purchases through their GPO, and they rely on the GPO to track their savings. 

About a third of the respondents don’t know how much they save per year through their GPO membership, with another 41% saying they save $10,000 per year or less. About 6% save over $50,000 per year; these are likely larger practices.

Most practices feel they generally get the best pricing from their GPO, but over 40% either didn’t know or felt this only held true for limited products. A large majority of practices feel their GPO can provide most of the brands the hospital needs.

Managers were asked about resources beyond product purchasing they rely on from their GPO. The top three responses included: education, peer community, and KPI benchmark reporting. 

Read the full report, VHMA Insiders’ Insight September 2020.