The Healthcare Leadership Experience
Healthcare Supply Chain Series: Re-Thinking Your GPO Strategy with John Reese | E.14
John Reese's John’s GPO (Group Purchasing Organization) and Supply Chain survey and how you can benefit from changing yours.
In this episode, Lisa and Rich are joined by John Reese, Senior Director of Health Solution at FTI Consulting.
John has a wide range of experience with a focus on supply chain and expense reduction initiatives including pharmaceutical, IT, and other purchased services. John also has experience in workforce optimization including productivity improvement and KPI standardization as well as other EBITDA improvements.
John shared results of an annual survey his company conducts and one of the questions they asked respondents was about their GPO—how are they performing overall?
“One is not performing, five is very well. Three is neutral. So in the second year of the survey, that answer, how's your GPO doing? It was up to a 3.8 from a 3.4… Aside from that question, though, there's a bunch of other interesting data points that came out. So 55% of the respondents said they wanted better pricing.
“Now, I get that, that's kind of like, why did you leave your job for more money? That exit interview question, it could be similar. Everybody wants better pricing and always, but to have 55% say that the GPO wasn't performing there is very interesting takeaway. 33% said better services… Two other interesting components that came out of the question really around strategy, what are you going to do differently in the post pandemic world? In this GPO environment in 2021/2022?
“13% said they were going to bid out their GPOs, so looking at changing. 13%, they're going to move to more local contracting. And then we also had 15% actually say that they were looking to start their own thing.
“So I think we're going to, if I had to prognosticate and think through what we'll see in next year survey, I think that's going to gain momentum and probably continue.”
Today’s episode is sponsored by Invoice ROI™, the only patented purchased services and indirect spend technology to manage, monitor and benchmark line item details.
In this episode, we discuss topics on GPO strategy:
John’s GPO (Group Purchasing Organization) and Supply Chain survey Some surprising feedback from this year’s survey Direct contracting The role direct contracting plays in cost savings PPI (Physician Preference Item) Sentiment towards PPI and the conflict with hospital cost savings Management of PPI Why two-way conversation is important The purpose of GPO GPOs are meant to provide favorable agreements, but is it costing you more money? GPO optimization When to use GPO strategically in your organization and when to carve it out Purchased Services and your GPO strategy The importance of analysis when it comes to purchased services and how it plays a role in your overall GPO strategy Ratio Benchmarking How ratio benchmarking can be very misleading
Connect with John:
📱https://www.linkedin.com/in/johnreeseiii/
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