Why a GPO?

What is Amerinet?

Amerinet is a leading national group purchasing organization (GPO), and with Advantage Healthcare Net, they strategically partner with healthcare providers – such as hospitals, long-term care facilities, surgery centers and physician offices – to reduce costs and improve quality. GPOs realize savings and efficiencies by aggregating purchasing volume and using that leverage to negotiate discounts with manufacturers, distributors and other suppliers. Amerinet serves one-third of our nation’s hospitals, over 3,000 nursing homes and thousands of clinics and surgery centers.

Through its Total Spend Management Solutions and operational performance improvement tools and services, Amerinet assists providers in reducing costs, improving efficiencies and creating new revenue streams. Based in St. Louis with offices in Salt Lake City, Providence, R.I., and Warrendale, Pa., Amerinet serves acute and non-acute healthcare providers nationwide.

How is group purchasing used in healthcare?

Hospitals and other healthcare providers use group purchasing to obtain the products they need at the best price. Overall, about 72 percent of purchases that hospitals make are done using GPO contracts.

How do GPOs save money for healthcare facilities?

Because they represent many healthcare facilities, GPOs offer economies of scale to the healthcare supply chain. By aggregating the purchasing power of its members, GPOs help balance the negotiating equation between providers and suppliers.

How much money do GPOs save its members?

GPOs save its members from 10 to 15 percent off their purchasing costs. Overall, this means GPOs enable members to save as much as $33 billion each year through lower product prices.

Additionally, GPOs provide valuable cost-avoidance savings to its members and other providers by helping them standardize and streamline their purchasing, as well as reduce the number of F.T.E employees that healthcare providers must dedicate to negotiate competitive purchasing agreements.

How does group purchasing work?

Amerinet uses healthcare providers to qualify group purchasing selections in a committee setting comprised of healthcare professionals, such as doctors, nurses and other clinicians. These committees help determine which medical supplies are most appropriate from a clinical standpoint. Once quality decisions are made, GPOs work to negotiate contracts with healthcare manufacturers, distributors and other suppliers.

After a group purchasing contract is created, it is still up to the member to decide which product is most appropriate in each circumstance and make the most appropriate purchase. GPOs do not purchase any products. They negotiate contacts that members can use when making their own purchases.

What healthcare entities utilize group purchasing services?

All types of healthcare organizations use group purchasing. Nearly every hospital in the U.S. (approximately 96 to 98 percent) chooses to utilize GPO contracts for their purchasing functions. Additionally, estimates are that hospitals nationwide use, on average, at least two and as many as four GPOs per facility. A growing portion of the long-term care, ambulatory care, home care and physician practice markets is using group purchasing to help lower costs and improve efficiency.

Are there different types of GPOs?

If you have seen one GPO, you have really only seen one GPO. They vary greatly in size, type of ownership and the services they offer their members. Established in June 1986, Amerinet has set the standard for integrity and customer service, maintaining it for over two decades. Amerinet is 100 percent privately owned by two investor-owner organizations: Administrative Resources Inc., based in Warrendale, Pa., and Intermountain Healthcare, a Salt Lake City-based system of nonprofit hospitals, clinics and health plans.

What services do GPOs provide beyond volume discounts?

Hospitals and other healthcare providers are increasingly relying on GPOs to help manage the complex system of purchasing. Many GPOs offer members e-commerce solutions to help manage their purchasing. The GPO community is also a leader in the effort to reduce medical errors by helping to standardize some of the product use in healthcare facilities, educating clinicians on best practices and leading the drive to institute bar coding for medical products.

Amerinet provides a variety of value-added products and services, including educational tools through Inquisit and a full suite of benchmarking solutions. A division of Amerinet, Inquisit provides healthcare professionals with important continuing education units and continuing medical education through its innovative technologies that include iQast, a Web casting service, Learning-On-Demand and additional services through its influence, a customized education program.

How are GPOs financed?

Generally GPOs rely, in part, on fees paid by suppliers to finance the services the GPOs offer healthcare providers. “Administrative fees” are generally based upon the purchase price that the healthcare provider pays for a product purchased through GPO contracts. The fee is paid only after a GPO's provider-member has been credited through the vendors for utilizing a GPO contract. Individual members may also pay a membership fee. In the Amerinet region served by Advantage Healthcare, most members recoup all or most of a membership fee through rebates, allowances or an administrative fee partnering program called “shareback”. Most Advantage members recoup more than their membership fee and the rate of return is available to the member in the form of a “Value Report”.

What is Advantage Healthcare Net?

Advantage is a Strategic Marketing Affiliate of Amerinet. Advantage Healthcare Net was originally founded in 1969 under the name of Commodity Association Purchasing of North Dakota (CAP-NO-DAK).

How long has Advantage been affiliated with Amerinet?

In 1986 Advantage joined several regional organizations to affiliate with several larger groups who were founding Amerinet. In August of 1990 a restructuring necessitated Advantage fulfill a contractual obligation to a founder group. After fulfilling that obligation, Advantage embarked on an exhaustive review of all major GPO’s compatible with the types and sizes of facilities in the Advantage Healthcare “family” of members. In May, 1997, Advantage re-affiliated with Amerinet and introduced our members to outsourced contracting through Amerinet’s group purchasing program.

What is Advantage’s servicing territory?

Advantage was one of the original pioneers of group purchasing for both long-term care facilities and hospitals. Advantage now serves well over 200 healthcare facilities in the Dakotas, Minnesota, Eastern Montana and NE Wyoming.

How does Advantage communicate with its members?

Advantage members often have on-site visits and regional meetings that address specific issues that require member input or education. Annually, our convention and vendor trade show, “UPDATE” is held which offers many educational offerings for attendees of all areas in a healthcare facility. Both Advantage Healthcare Net and Amerinet use multiple forms of electronic mediums to communicate with the membership.

How do I contact Advantage/Amerinet?

Advantage employs a staff of five. Two additional field support personnel are employed by Amerinet in the Twin Cities area to enhance member service capability. Each healthcare member is assigned an Advantage/Amerinet representative. The best way to reach them is to call the Advantage 800# which is 800-548-2744.

Credit: HIGPA, Amerinet & Advantage Healthcare Net