In what could be the start of a trend of providers flocking to smaller group purchasing organizations, ROi has inked a deal with a network of 20 acute-care hospitals across Arkansas, Missouri and Texas that previously worked with mega-GPO Vizient.
Plano, Texas-based TPC, formerly known as the Texas Purchasing Coalition, is moving to ROi after its most recent contract expires with Vizient. In an agreement that begins Dec. 1, ROi will be the network's preferred GPO and will provide consulting services, house-brand supplies and other products and services.
TPC, a regional GPO that represents about $1 billion in supply spend, is made up of providers who say they want to aggregate their business volume without sacrificing their status as independent facilities. It's known for having strong contracts in purchased services such as insurance and food service.
St. Louis-based ROi has more than 100 GPO members, as well as other customers who only purchase its services and products. It's 90% owned by the St. Louis-based Mercy health system, and manages that organization's day-to-day supply chain operations.
TPC's move from Vizient to a smaller GPO is an early sign of what most experts have said would happen after VHA-UHC Alliance acquired MedAssets and created a mega-GPO now known as Vizient. Both companies were already the result of multiple mergers and acquisitions, and many providers, including TPC's membership, have expressed frustration that the GPOs' cultures haven't successfully merged as the businesses combined.
TPC CEO Geoff Brenner said he understood that MedAssets had a fiduciary responsibility to its shareholders to sell but contends members' interests in some cases got lost in the process. TPC has been a member of the GPO since 2010, from an initial MedAssets agreement.
“As a customer pulled into that, it really leaves you as a taste, of, I don't want to do that again,” Brenner said. “I wouldn't be surprised if you see more organizations look at the mega-GPO trend and try to find a culture that looks more like their own.”
Irving, Texas-based Vizient said in a statement that gains and losses are expected in the ordinary course of any business and that TPC made its decision "within months" after the MedAssets deal. The GPO said that integration of operations, portfolios and corporate cultures is taking place "well ahead of expected pace."
"Overall, Vizient continues to have strong member relationships and has a positive track record of member retention," the statement said. "Throughout this integration, our highest priorities are driving market-leading value and pricing for the providers we serve and achieving the highest possible member satisfaction."
Brenner said ROi was primarily chosen for cost savings and that TPC's members appreciated the company's provider-centric model, since it was borne out of a health system. Many experts have predicted that provider-led GPOs will come out strong.
“There's this gravitational pull toward more provider-centric cultures that are emerging as viable GPO candidates,” Brenner said. “I do think that you're going to see that from more and more Vizient customers, especially from MedAssets' side, who watched the transaction happen.”
Regional GPOs like TPC have become an increasingly popular trend in the healthcare supply chain space, as providers look for more local contracts and more personalized services. Several regional purchasing collaboratives have been formed in the past year, mostly supplemented by the large, national GPOs.
