ABSTRACT
Collective buying power has been the premise and promise of group purchasing organizations (GPOs) since the first healthcare GPO was created in 1910 by the Hospital Bureau of New York. The Healthcare Supply Chain Association, which is a national association of GPOs, provides this definition of their purpose: A GPO is an entity that helps healthcare providers—such as hospitals, nursing homes and home health agencies—realize savings and efficiencies by aggregating purchasing volume and using that leverage to negotiate discounts with manufacturers, distributors and other vendors. The GPO industry began with many small, regional GPOs that collected administrative fees from suppliers, generally at or below 3% of the dollar volume. The key factor for suppliers is how fast a GPO can convert on a certain level of committed volume. The strategy described in the original spirit of GPOs is the foundation of the development of the SharedClarity model.
