Small and Medium sized businesses want to compete against larger businesss. However, due to their size and purchasing volume they pay higher prices for goods and services. As a business grows so do their expenses. Vendors want to work with an established business and they are willing to offer discounts to maintain the consistent business. In many cases a vendor will give a bigger discount as volume increases. Due to their limited buying power, a small business pays a higher percentage toward expenses than large corporations. Over 100 years ago a better option started in the healthcare industry.
HISTORY OF GROUP PURCHASING ORGANIZATIONS
Group Purchasing started in the early 1900s when Hospital Superintendents in New York wanted to collaborate on laundry services. The first official Group Purchasing Organization (GPO) was created in 1910 in New York and the industry has grown ever since. Hospitals faced rising expenditures due to phenomenal advances in care and an aging population. In addition, reimbursements were decreasing and they wanted to get better control of their purchasing to improve their profitability. Hospitals would join forces to negotiate better contracts and pricing with their vendors and suppliers. GPOs really started to gain traction in healthcare in the 70s and today there are more than 600 GPOs in the United States.
ORIGINS OF MAXX PURCHASING
GPOs are not just for hospitals. Our sister company, Carepoint Group Purchasing, is a healthcare GPO serving doctor’s offices, clinics, surgical centers, Long-Term Care Centers, etc. We know the value in group purchasing. However, the need was not being met for non-healthcare businesses. We made some changes to our business and we are now able to allow non-healthcare businesses to use many of the same contracts.
The benefits of a GPO can now be accessed by any business through our new company Maxx Purchasing. Any business can become a member of Maxx Purchasing to aggregate their buying power with other businesses to realize savings and efficiencies. By joining together, we can leverage our buying power to negotiate discounts with vendors, manufacturers, distributors, and service providers.