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Power in purchasing

July 15, 2011
by Sandra Hoban, Executive Editor
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Group purchasing organizations (GPOs) have been around for a long time. The first healthcare GPO for hospitals was created in 1910 by the Hospital Bureau of New York. In the late 1960s, Medicare and Medicaid were triggers in the growth of GPOs. In 1983, the Medicare Prospective Payment System focused on an organization's cost efficiency, which led to the inclusion of LTC organizations. Basically, a GPO is a conglomerate of members banding together to leverage its buying power to secure goods and services at negotiated prices, offering them value, quality and savings. A GPO enlists industry-focused vendors and other GPOs to step under its umbrella of opportunity.

On January 1, 2011, Value First became the official GPO of LeadingAge (formerly the American Association of Homes and Services for the Aging). LeadingAge and 25 of its state affiliates partnered with MedAssets, a healthcare supply chain source, to develop Value First and to provide LeadingAge members the opportunity to acquire the goods and services they need, cost efficiently. “Value First helps LeadingAge's members have ready access to everything they need to operate their businesses,” says Steven Nielsen, CEO of Value First. “Our mission is to help LeadingAge members carry out their mission,” he adds.

Briefly, here's how it works: If a Value First member is interested in purchasing a lift, he or she has several options. The member could go to the website, www.valuefirstonline.com, to see what lift products are available. If interested in purchasing, the buyer then contacts the Value First Service Center for personal attention, assistance and advice on available selections. Alternatively, the member could make arrangements directly through the vendor and their sales force to access Value First prices. “Although Value First is in its infancy,” says Nielsen, “plans are under development to provide numerous customer service functions such as online ordering and a full cadre of reports for customer use.”

Announced at LeadingAge's April Future of Aging Services Conference in Washington, D.C., Board Chair Win Marshall explained that Value First potentially gives members the combined purchasing power of more than 7,000 members whose total annual “spend” is in excess of $6 billion. And attendees were interested, as they should be: The activities of Value First are overseen by a board of directors drawn from the 25 LeadingAge owner affiliates. Although Value First's primary clients are not-for-profits, all organizations are welcome to join. There is no cost to become a member.

Be thorough. Check out various GPOs to find the one that fits your organization's goals and strategies. LTC GPOs include: