Maintaining financial stability is critical for healthcare organizations. The key to protecting bottom lines is ensuring the relationships with the hospital’s group purchasing organizations (GPOs) are both healthy and beneficial. While the purpose of the GPO is securing the best possible product value for hospital members, there is often room for improvement. With an average of 72% of hospital purchases being made via GPO contracts, there is a tremendous opportunity for significant cost savings by taking a closer look at these relationships.
Consolidation In The Healthcare Marketplace Is Driving Up Costs
In today’s healthcare climate it’s becoming more challenging for hospitals to remain financially viable. This is especially true for stand-alone, independent hospitals. According to Moody’s researchers, median operating cash-flow margins of 160 surveyed hospital systems dropped from 9.5% in 2016 to 8.1% in 2017.[1] What’s causing the decrease in profitability? Higher labor and supply costs, higher drug costs, and lower reimbursement from commercial and government payers. If you’re a small hospital with a tight budget, then you’ve probably entertained the idea of consolidating with a larger system with hopes of controlling costs and growing margins. But the data suggests that both financially and in terms of patient care, consolidation might not be the ideal solution.
2018 TPC Fall Classic
TPC’s 2018 Value Analysis Team Summit – also known as the Fall Classic – by all standards was a huge success. At this annual event, TPC committee members have the opportunity to meet face-to-face with peers, discuss the TPC purpose and vision of working together as one, and collaborate on new initiatives and goals for the upcoming year.