Group purchasing organization

yeah that's that's so great and And so for listeners, Brian, who may not be familiar with the sector, can you explain what a purchasing services company does and the role it plays in supporting health care and seniors living organizations?

So group purchasing organizations or GPOs, as they're known, they're really there to provide procurement expertise and provide scale to get people to be able to buy smarter and much more cost effective than people trying to do things on their own.

Yeah.

So it's really about thinking about outsourcing or having an expert provide that procurement service so you don't necessarily have to have a team of people behind you doing that.

I agree.

We've got We're recognizing in the supply chain that we've now got to form group purchasing organizations, GPOs, because a hospital on its own does not have the volume to be able to keep prices down and build the long-term relationships.

So we're seeing group purchasing organizations.

The challenge we have from a supply chain standpoint and in the hospital systems, let's take surgical knives, for

Okay.

So the cost of shipping goes up.

And so the GPOs have an issue of how do we, first of all, source it all? Or do we go, and we talked earlier about outsourcing, or do we outsource the assembly of these packs? And that's exactly what they're doing.

Outsourcing it to a third party to do the packs.

And I think what we really want to do is shine a spotlight on a story that has blown under the radar a little bit.

I know I hadn't heard about it until Matt brought it to my attention, but we've got a pretty major dispute between one of the larger long-term care PSAO GPOs, MHA, and Optum, our favorite, PBM.

And I thought we could start maybe with just giving a little bit of an overview of how LTC pharmacy is different from brick and mortar pharmacy on the independent scale.

Yeah, sure.

John has spent more than two decades in medical device sales and executive leadership, building high-performing commercial teams and helping some of the industry's leading organizations navigate an increasingly complex healthcare landscape.

Throughout John's career, having been in sales pretty much the whole time for over 30 years, including 20 of those years at Gettinga and now here at Terumo, he's led corporate accounts across GPOs, integrated delivery networks, government, and distribution channels.

Today, John and I are going to discuss how the role of corporate accounts has evolved, what it takes to succeed in today's MedTech commercial environment, and of course, the leadership principles that have helped shape John's career.

So without further ado, John, welcome to the show.

Did it still save money? Did the staff actually use it?

And the successful playbook also heavily involves leveraging channel partners and group purchasing organizations or GPOs to bypass certain procurement bottlenecks.

Can you give us the explanation on how GPOs actually function in this context? Because they seem like a sort of cheat code if used correctly.

A group purchasing organization acts essentially as a massive wholesale buyers club for hospitals.

Hospitals join a GPO to leverage collective buying power and secure discounts.

Nobody's checking whether what came out matches what went in until somebody audits it after the fact.

And, you know, this can be exacerbated when you add more people into this game of the telephone, right? So if you've got consultants or you've got GPOs or you've got third parties who are also communicating any pricing changes or working on any rebates over any of that period, that's going to involve more complexity.

And I think that also leads to a good follow-up, which is what does that tell us about the data infrastructure most operators are relying on today if, you know, it seems to be more of a synchronization issue than anything else?

Yep.

That took us both a long time to iterate on, but we also wanted to see not just the product evolve, but also our trust in the community evolve, so that then once we started developing other types of partnerships, it was on a really solid footing.

And, you know, if you think about what's helped us then build partnerships across those other players you mentioned, where now we have relationships not just with life sciences companies, with pharmacies, with payers, with other organizations, GPOs, all of whom are involved in the ecosystem.

You know, many of those relationships are important.

not you know commercial in nature but simply partnership it's where there's opportunities for two different organizations to work together to make the experience better and easier and faster for patients and physicians and you know that actually ends up serving everyone's need everyone's goals are actually quite aligned most of the time on just making the process faster because the types of complexity that we're trying to abstract and eliminate with ai are the types that none of these people want to be spending time on and none of them want you know to be associated with their organizations they don't want people to think oh if you have to interact with this payer or this pharmacy or or um this gpo that there's a ton of paperwork and complexity they want it to feel easy and straightforward and so as our product got uh traction across providers that actually ended up being a huge credibility booster for us and is what actually attracted a lot of those other players to want to work with us because like hey what you're doing is clearly working it's clearly rising in the community and it's obviously been able to scale and so now we think there's an opportunity for us to work together and that's gonna be a win-win for everyone involved

And the faster we're growing, the more quickly we see more people kind of coming in the door.

And each of these spaces also are also themselves, you know, have that same word of mouth dynamic.

Was that same word of mouth also used for like GPOs? I see that you guys have a GPO with like Medico CX and that's like a really interesting and sometimes a classic distribution play.

Was that also through organic word of mouth or how did that come to be?

Sure.

We were formed, um, in the hospitality space as a, a group purchasing organization, which really leverages collective purchasing power and allows multiple properties and hotels to purchase at, um, you know, at scale.

Uh, we do a lot more than just your typical group purchasing organization.

We're really a professional procurement organization because we provide a lot more value than just a contract and a price.

We have people that visit hotels, we have people that work with client level, management company level, and really help people, uh, improve their procurement department and operations.

And so that's what Avendra really has set out to do, to be a leader, initially just really in hospitality, and we've expanded beyond that over 25 years and geographically we've expanded as well to be more of an international, uh, company.

Uh, but that's, that's where it started.

It, it's really about group purchasing and providing added value around procurement.