Group purchasing organization

Group purchasing organizations (GPOs) are companies that negotiate prices for drugs, devices, and other medical products and services on behalf of healthcare providers, including hospitals, ambulatory care facilities, physician practices, nursing homes, and home health agencies. Often, GPOs are owned by their member providers. They do not take title to or possession of medical products. Rather, the central purpose of GPOs is to enhance the quality of the services delivered and lower their members’ operating costs by reducing transaction costs and negotiating lower prices for supplies than providers might otherwise obtain on their own. As part of improving efficiency in the supply chain, GPOs also provide a range of additional services to healthcare providers that may lower costs or improve operations. © Federal Trade Commission