Sponsored: Provista
How GPOs and distributors can work with end users to add new value
Once distributors realize that group purchasing organizations (GPOs) are not their competitors but rather can serve as partners to provide advantages for their businesses, they can join forces to work with their customers to enable new benefits. For example, streamlining the relationship allows distributors to remove some of the administrative burdens that typically fall on reps by having the GPO handle them.
In this Q&A, Patrick Turner, Senior Director, Contract and Program Services for Provista, a non-acute GPO, explains how GPOs and distributors can complement each other’s strengths to grow their businesses—and drive enhanced value to their end users.
Q.What’s been the cause of tension between GPOs and distributors? Have those issues been resolved?
Turner: Historically, there’s been a perception that GPOs and distributors have interacted in a competitive fashion to win customer favor. Over the past several years, that perception has evolved. I believe both parties now realize the value the other offers. GPOs recognize the service that distributors bring our members, and distributors realize that GPOs can help them bring value to the market and grow their business.
Q.What’s the best approach for GPOs to remove administrative burdens from distributor sales reps?
Turner: As the customer-facing entity in this dynamic, distributor reps are currently saddled with many of the administrative burdens associated with utilizing GPO contracts. Recently, GPOs have been successful in reducing some of this workload with programmatic offerings that focus on certain market segments or particular distributors. GPOs can continue to improve, but it starts with including procedural requirements in our vendor negotiations. Cost is not the only value GPOs should negotiate. “Ease of use” is also a value GPOs need to bargain for and provide.
Q.In what ways can GPOs and distributors work together, and work with customers, to streamline relationships?
Turner: The complexities of contract access, tier optimization, chargeback success, etc., are difficult to navigate. Fully utilizing a GPO contract takes two parties: the GPO to write and activate the contract, and the distributor to vend it. The ongoing operational cooperation between both parties to effectively access GPO-negotiated value is essential to truly delivering customer value. Furthermore, as our members become more engaged and educated, both distributors and GPOs gain additional influence to effectively advocate for our mutual customers.
Q.How can distributors leverage GPOs’ purchasing power?
Turner: In many ways, distributors are already leveraging the purchasing power of GPOs. Over the past few years, distributor utilization of GPO agreements has risen significantly. By utilizing GPO agreements, distributors can go to market with a much more competitive price point than they could otherwise. That said, there are always ways to dive deeper. The next evolution of how distributors partner with GPOs to leverage our complementary strengths could prove the most impactful to our customer base.
Q.How should GPOs and distributors work together to enable new value for each other and for customers?
Turner: In very tangible and significant ways, our world is driven by data. Thus far, both GPOs and distributors have taken a proprietary view of their own data—and rightfully so. However, tailored ways likely exist in which both parties could become more transparent with one another to unearth new sources of value for our customers.
Q.Are there specific or unique benefits that Provista brings to distributors?
Turner: Provista has been a market leader in recognizing the value of a strong GPO-distributor relationship. We have invested in programs that are tailored to individual distributors to cater to their unique operational needs. We have made huge strides to ensure that our membership process is as simple and easy as possible for distributor sales reps and non-acute members. We have worked closely with our contracting partner, Vizient, to prioritize automatic contract eligibility. Provista has tremendous value to offer our membership. We readily recognize that much of this value is delivered through distributors and we have invested accordingly.