Helping independent practices remain independent — How Gastrologix's group purchasing organization is cutting costs

Gastrologix Principal Stephen Somers spoke to Becker's ASC Review about the benefits independent gastroenterology practices can reap from group purchasing organizations.

Note: Responses were edited for style and clarity.

Question: Why is a GI-specific group purchasing organization needed? How did Gastrologix come about?

Stephen Somers: While many practices have relationships with GPOs, these tend to be large, national concerns that don’t really focus on entities that provide specialized care and non-acute care such as surgery centers and physician practices.

We heard from a lot of physicians that there wasn’t really anyone concentrating on the challenges faced by small or mid-sized independent GI practices from a GPO perspective. So, we decided to create Gastrologix — the only GI-specific GPO in the U.S. serving the needs of independent, community-based gastroenterologists.

Q: What are the challenges associated with group purchasing?

SS: We are consistently reinforcing the concept the collective is far more powerful than the sum of its parts. Our long-term objective is to align the purchasing of the independent GI community into one channel so that we can really have an impact on market dynamics. Sometimes physician practices might use our pricing to negotiate marginally better deals in one-off situations, but we try to work with our partners to minimize these sorts of deals and remain focused on the concept of big downstream wins.

Q: What advantages does Gastrologix provide to independent practices?

SS: Like national GPOs, we provide value to physician practices through price improvements, like partnering with Besse Medical for the purchase of infusion drugs. Our member groups, depending on the size of their infusion programs, have achieved significant annual savings. Earlier in 2018, we entered into an exclusive agreement with Stratis Medical that will enable our members to access Stratis products at favorable pricing levels.

Gastrologix has developed a one-stop-shop program for endoscopy center needs by contracting with companies providing medical and surgical supplies, capital equipment and other items and services. Our efforts in this area helped produced savings of between $450,000 to $500,000 for a member practice outfitting a new endoscopy center.

We also work with our partners to develop in-office retail pharmacy programs and in-office pathology labs, as well as providing cost-savings for the ongoing needs of existing pathology labs.

Where we differ from national GPOs is in the value we can provide as a true partner, bringing more to the table than simply preferred pricing on goods and services. For example, we recently partnered with New York City-based Albert Einstein College of Medicine and Montefiore to provide a free continuing medical education activity on the current and potential role of biosimilars in inflammatory bowel disease management, including how they might contribute to value-based care.

We also act as a business development organization on behalf of our membership, working together to create programs that are focused on challenges that are specific to independent practices, such as data aggregation systems, real estate, insurance, human resources and many other components of running an independent practice.

Q: How does Gastrologix challenge hospitals in terms of purchasing power?

SS: We don’t really compete with hospitals unless the hospital is providing purchasing options to an independent GI practice in conjunction with a large, national GPO. Another difference between Gastrologix and national GPOs is our ability to provide our industry partners with exclusivity. After surveying our membership regarding potential partners, we perform a detailed due diligence process and choose specific partners in various market segments. This way, we’re able to negotiate as good or better pricing on behalf of our member practices.

Q: How will Gastrologix help independent practices meet value-based goals?

SS: In an age when quality of care, cost-effectiveness and transparency are more important than ever, the high-quality, integrated care delivered in independent medical practices is a valuable alternative to more expensive care provided in hospitals.

Gastrologix is currently in the process of developing a centralized data repository among its membership and the physician network it serves. While the repository will provide a host of services, we’ll develop a use case that combines clinical, operational and financial data obtained from the participating practices for purposes of value-based and risk-based contracting.

This initiative is a key piece of the structural framework we’re creating to further demonstrate and solidify the important place that independent practices have in the healthcare ecosystem.

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