Healthcare reform — Obamacare — has stuck a lot of providers and caregivers in tough positions. Whether proponents or opponent of the watershed law, most expect rocky times, at least temporarily, are ahead. But one key player sees nothing but opportunity.
As population health management becomes more prevalent, hospital-nursing home coordination has become more important than ever. It is a time to learn from one another, as perhaps never before.
That’s especially true when it comes to things that can distinctly affect the bottom line. That starts to explain the restrained grins on the faces of group purchasing organization executives.
“The Affordable Care Act hasn’t hurt the GPOs,” acknowledges Todd Ebert, the CEO of Amerinet. “It has positioned us well for what we do, and I’m not just talking about Amerinet.”
Long-term care providers have utilized GPOs for decades, but only in pockets. And to nowhere near the degree that hospitals have. Potential savings on goods and services could be as high as 12% to 16%, GPO officials say.
Now, Amerinet is ready to jump headfirst into deeper LTC waters, Ebert told me. The company recently increased its investment in personnel and resources. The hope is to drive the company’s long-term care member number higher than the current 8,300.
Overall, about 10% to 12% of Amerinet’s $9 billion business comes from long-term care. The percentage is growing, attests Ebert. He knows long-term care: He’s a trained pharmacist who once kept very busy doing a lot of long-term care clinical consulting while living in Salt Lake City.
Ebert thinks that a golden era could be at hand for GPOs. The nation’s biggest ones — Novation, Premier and MedAssets — are still clear market leaders. But there is plenty of room for all kinds of GPOs to grow, experts believe.
Value First, for example, is a GPO owned by LeadingAge and MedAssets. Other partnerships, such as Innovatix (a joint venture of Premier and the Greater New York Hospital Association) and smaller, regional-based entities dot the landscape. Big or small, long-term care providers are going to receive more calls about using better “best practices.”
“From my perspective, long-term care hasn’t recognized the value of working closely with a GPO enough,” Ebert observed. “But just as important, GPOs need to see long-term care as an important market and serve them well. I think we’ve all gotten better about putting stronger value proposition on it so long-term care doesn’t think we’re just after them as an after-thought of the acute care market.”
Time will tell. GPOs have the opportunity to create better product and service pricing, as well as data management. For the latter, GPOs like to acquire providers’ purchasing data in order to help better streamline and engineer future purchases.
That, of course, is the rub with GPOs. While double-digit savings might become available for commodities and certain other products, providers could be asked to forego previous preferences in order to comply with a GPO’s formulary.
“We believe that in this industry, size is important,” Ebert told me. “We have the critical mass. But what counts is if you’re willing to look at products and make some commitments. You can drive pretty competitive costs for products you buy. May times, you could see maybe a 12% savings if you’re able to use ‘comparables.’ A dollar off cost is a dollar to the bottom line. That’s where we see these [GPOs] can really make a difference relative to their financials.”
Thanks to the Affordable Care Act, we could be on the verge of finding out to a greater degree than ever before.
James M. Berklan is Editor at McKnight’s. Follow him @LTCEditorsDesk.