How Group Purchasing Can Boost Practice Revenue

This article appears in the January 2013 issue of Managed Care Contracting & Reimbursement Advisor.

Physician practices don't typically devote much time to purchasing and inventory management because, after all, it's a doctor's office and not a warehouse. But some focus on purchasing and inventory can pay off with reduced costs big enough to affect your bottom line, says Dena Kitchens, senior director of physician services with Provista, a consulting company based in Irving, Texas.

One of the first options to consider is buying supplies and equipment through a group purchasing organization (GPO), which can give you more buying power than going it alone, Kitchens says. Her company offers a GPO to physician practices.

"A GPO can offer you significant savings in the supply chain when it comes to med-surg, pharmacy, or anything else that a physician's office purchases," Kitchens says. "Virtually anything that a physician practice would need to purchase, a GPO is going to have on contract already."

Some practices are already using a GPO but might not know it, she says. Sometimes a distributor will direct the practice's med-surg purchases through a GPO to provide a better price, but then the practice is not taking advantage of other potential savings from the GPO.