Are you on my GPO?

Are you on my GPO? - Blog

You want to know, “Are you on my GPO?”

We need to know, “Suction Regulators: Capital or Commodity?”

The answer to this simple question may determine where you find our suction regulators contracted. 

If you perceive the little plastic box on the wall as a disposable item that gets repaired and repurchased every month, suction is likely a disposable commodity item. If, on the other hand, you realize the sheer number of critical suction interventions you perform in your unit and that regulators need to be available to clinicians 24hrs a day, they are likely capital.

Strictly from a pricing standpoint, suction regulators rarely trigger a capital requisition when purchased in small numbers, categorizing them as any other consumable product. However, when hospitals are outfitting a new build or renovation, calling for hundreds of vacuum regulators, they are certainly scrutinized as capital. In many ways, vacuum regulators border the line between capital and consumables.

There is a class of products built to compete in the commodity space, with injection-molded plastic parts, repair parts available by the dozen, and a unit price well below $500. Boehringer regulators, on the other hand, are truly building for the capital market. With Boehringer, whether you buy one regulator or one thousand, we manufacture these to be in service twenty years from now.

At the most basic level, Group Purchasing Organizations (GPO’s) aggregate the needs of member hospitals and negotiate with manufacturers to provide overall value to the hospital supply chain. They can demonstrate value principally by showing discounted pricing to their members. For commodity items, where the purchase cycle is regular and items purchased in bulk, it’s easy to demonstrate transactional discounts. A hospital will buy 85% of commodity items through a GPO agreement. For capital equipment, where the purchase cycle may be ten years or more, and hospitals will bear downstream costs associated with the product in future years, GPO’s are ill-equipped to demonstrate this same transactional discount. So a hospital will buy less than half of hospital capital equipment through a GPO agreement.

You can find Boehringer suction regulators on prominent GPO agreements, mainly where GPO’s place a high value on clinical uptime and overall cost of ownership. The lack of a GPO agreement is not an absolute barrier to purchase. It is sometimes much more effective to partner with your hospital or IDN (Integrated Delivery Network) to provide you with capital that best matches your clinical need at the best price.

GPO’s come and go. If you look at the eight largest GPO’s from 2010, only two of these are still in existence less than nine years later. Our company has been producing quality medical devices in the United States for almost fifty years. Our goal is to provide you with the safest, most reliable capital equipment, so you are best able to care for the needs of your patients. We provide the best warranty in the industry and products designed to last the next twenty years to accomplish this. When looking for a partner for your clinical capital, you need to ask who has a longer planning horizon: us or your GPO?

GPO Differentiation: The Real Deal

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Kevin Klocek
Kevin Klocek
VP of Business Development
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