Equine & Livestock

15 Spring/Summer 2020 | Livestock Solutions The power of GPOs for veterinary practices Leveraging group purchasing organizations can earn veterinarians a powerful seat at the buying table, especially for single and small-group owner practices. Think of it like a David and Goliath kind of situation. What is a GPO? A study by The Hackett Group defines a GPO as "an entity that is created to leverage the purchasing power of a group of businesses in order to obtain discounts from suppliers based on the collective buying power of its members." In simpler terms, a GPO is an organization that pools the buying power of its individual members to help get group pricing on products and services. Think of GPOs like Costco or Sam's Club, but for the supplies you need for your veterinary practice. GPOs also provide benefits to the suppliers that members purchase from, like an expanded market, access to industry insights and ability to build better buyer relationships. Why should my practice use a GPO? There are several major benefits to being part of a group purchasing organization. • Some come with no additional cost. While some GPOs charge a fee, some provide free memberships. This means you get access to all the perks, at no additional cost for your practice. • There is less risk with purchasing. GPOs want to keep their members, which means they need to provide access to the best quality vendors. Most GPOs will fully vet the credibility and value of potential suppliers before partnering with them. • You get great networking opportunities. A GPO brings together many different veterinary professionals and suppliers, so your organization gets access to a broad range of other people in your field. Share best practices, recent experiences and challenges with people that you wouldn't have had access to before. • Speaking of networking, GPOs keep you connected with suppliers. GPO members will still receive deliveries straight from the supplier and be able to call on the supplier if there are any issues. • Stay up to date. Being a part of a GPO means you're a part of a giant network of people in your field. GPOs stay on top of trends and new products and can inform their members of changes in the industry. The growth of GPOs GPOs aren't new, they've existed in human healthcare since 1910 and have been growing since that time. The number of GPOs grew from 10 in 1962 to 40 by 1974, before tripling between 1974-1977. The oldest veterinary GPO is the Veterinary Hospital Association (VHA), which was started in 1985. Fast forward to present day and GPOs are still growing. In 2017, almost 40 percent of veterinary practices belonged to a GPO, which was up from only 19 percent in 2015. The GPO landscape changed quite a bit from 2013 to 2019. Three new veterinary GPOs entered the playing field, three existing GPOs merged with others and at least two went out of business. There are now roughly eight major players in the market and membership more than doubled across those providers. Even the structure of GPOs is starting to change, with a focus on hybrid groups that can also offer marketing support, analytics for your practice's performance and business/clinical education opportunities. One of the largest veterinary GPOs does just that. PSIvet goes beyond the ability to purchase supplies at a discount. They also provide access to education and technology solutions that help you understand how to run your practice more efficiently, meaning you can better serve your clients. If you're interested in how a group purchasing organization can benefit your veterinary practice, contact your Covetrus representative at 855.724.3461 or visit us online at northamerica.covetrus.com to learn more. Sources: http://blog.covest.com/news/8-benefits-of-joining-a-group-purchasing-organizations https://www.ibisworld.com/united-states/market-research-reports/group-purchasing-organizations-industry/ https://www.aaha.org/publications/newstat/articles/2018-06/trends-in-your-inbox-gpos-play-a-critical-role-for-independent-veterinarians/

• Cover