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A Group Purchasing Organization (GPO) agreement between companies pools their resources so that they enter into purchasing contracts as one organization. These buying consortiums are designed to leverage the purchasing power of member organizations.
Allowing Access
Buying into a GPO allows a small company to have access to large suppliers who only do business with customers of a certain size.
Analytical Tools
GPO organizations can employ a series of analytical tools that evaluate how their member companies purchase goods. These evaluations can lead to improvements on behalf of participating companies, such as letting them buy in bulk at a time of year when the cost of a needed commodity is low.
Use in the Medical Community
Group Purchasing Organizations are prevalently used in the medical community. These organizations allow small community-based hospitals to leverage access to medical supplies.
Anti-Trust Concerns
Certain GPOs and their membership have been advised to monitor the activities of federal and state antitrust agencies closely because of renewed antitrust concerns.
High Administrative Fees
Some members of GPOs have expressed concerns that GPO administrators are establishing high administrative fees that make it difficult for some companies to obtain a GPO contract.
Allowing Access
Buying into a GPO allows a small company to have access to large suppliers who only do business with customers of a certain size.
Analytical Tools
GPO organizations can employ a series of analytical tools that evaluate how their member companies purchase goods. These evaluations can lead to improvements on behalf of participating companies, such as letting them buy in bulk at a time of year when the cost of a needed commodity is low.
Use in the Medical Community
Group Purchasing Organizations are prevalently used in the medical community. These organizations allow small community-based hospitals to leverage access to medical supplies.
Anti-Trust Concerns
Certain GPOs and their membership have been advised to monitor the activities of federal and state antitrust agencies closely because of renewed antitrust concerns.
High Administrative Fees
Some members of GPOs have expressed concerns that GPO administrators are establishing high administrative fees that make it difficult for some companies to obtain a GPO contract.
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