GPOs are identifying and addressing rural health vulnerabilities.
By Todd Ebert, R.Ph., President and CEO of the Healthcare Supply Chain Association (HSCA)
June 2023 – The Journal of Healthcare Contracting
Rural healthcare is in crisis. Many healthcare facilities across rural America are facing closures, staffing shortages, and strained resources. The COVID-19 pandemic exacerbated these issues, which continue to affect rural providers and patients. Approximately 57 million Americans depend on their hospitals to receive care, but with more than 130 rural-area hospitals closures in the past decade, access to care is decreasing.
According to a report from the Center for Healthcare Quality and Payment Reform, “all but seven states have at least one rural hospital at immediate risk of shutting down.” Over 600 rural hospitals, around 30% of all rural hospitals across the country are at risk of closing in the near future. The ramifications of rural hospital closures are severe. Closures impact those in need of immediate care and can affect local economies by decreasing rates of employment. Healthcare group purchasing organizations (GPOs) are helping rural healthcare providers confront the many challenges they are facing in a post-pandemic world.
Increasing equity through decreased costs
Rural healthcare facilities don’t always have adequate resources to stay open, let alone make space for additional beds and buy new equipment. By aggregating the purchasing power of hospitals and other providers, GPOs can negotiate discounts with manufacturers and vendors. This process allows GPOs to provide discounts to healthcare providers of all sizes and types, which they’ve done for decades. GPOs also reduce costs for smaller healthcare facilities by decreasing the number of negotiations that take place. It’s important to remember that these benefits are not just available to hospitals, but other types of providers in rural areas that GPOs serve such as palliative care facilities, nursing homes, and surgery centers.
Mitigating essential drug and product shortages
Rural healthcare providers face many of the same issues as other providers, including drug and product shortages. Many rural providers, however, do not have the resources or funding to track, mitigate, and prevent shortages on their own. Healthcare GPOs track data on shortages and raw materials, including active pharmaceutical ingredient (API), on a global scale to anticipate potential supply disruptions. GPOs then share this information with their member providers, including rural providers, and help them develop strategies to mitigate current shortages and avert future ones.
Additionally, the Healthcare Supply Chain Association (HSCA), which represents the country’s leading healthcare GPOs, is a member of the End Drug Shortages Alliance (EDSA), a forum for key stakeholders in the healthcare continuum to take strategic aim at drug shortages that frequently disrupt patient care. EDSA’s aim is simple; to end drug shortages by providing providers and patients with access to necessary medications. GPOs are dedicated to helping mitigate shortages through their work with EDSA and with their member hospitals.
Working with rural healthcare facilities through and beyond public health emergencies
GPOs have played a critical role in supporting healthcare providers as they delivered care during the COVID-19 pandemic. GPOs worked tirelessly to strengthen the resiliency of the supply chain by launching programs to promote domestic manufacturing and adding new manufacturers and suppliers to contracts to increase supply of necessary products and medications. These efforts, however, are not exclusive to pandemics and other public health emergencies. Increasing domestic manufacturing can be beneficial to rural healthcare providers since it decreases the distance between the provider and the product. Rural providers will also continue to benefit from the new manufacturers and suppliers who have been incorporated into the healthcare supply chain.
As part of their supplier evaluation process, GPOs consistently assess suppliers for disaster preparedness, the consistency of product availability, product quality, recall frequency and management, and redundancies and transparency in their manufacturing. Through evaluating these criteria, GPOs help rural healthcare providers access suppliers that will deliver products and necessary medications specific to their needs. Since GPO contracts have competitive prices, GPOs can help rural providers combat post-pandemic inflation and high prices. The auxiliary services GPOs offer are beneficial to rural providers and the supply chain, both in and out of emergency conditions.
Rural healthcare in the U.S. is extremely vulnerable, and our healthcare system is only as strong as its most vulnerable participants. HSCA and its member GPOs are committed to meeting the needs of providers and patients in rural areas and addressing the broad vulnerabilities of rural healthcare.