The Food Service GPO – Best practices to maximize your purchasing power

Each year, millions of dollars are spent on food purchases to feed Patients, Visitors, and Hospital Employees.  Every Hospital Food Service department across the US has the same concerns when it comes to using a Group Purchasing Organization (GPO).  Whether the department is outsourced or self-op, there are opportunities for free money from the distributors that are not taken advantage of.

The Food Service GPOThe main distributors all carry similar items from the brands they represent.  When the department buys items, they often come with a rebate back to the GPO.  The more they buy, the more that the GPO gets back from the brand.  So, what is the issue?  Most food purchases are not based on rebates, but based on the items they like or continue to purchase because it is what they always buy.

In the current Healthcare market, Hospitals and Health Systems cannot afford to turn a blind eye to money that is being “left on the table”.  When Hospitals partner with Soriant Healthcare, we will take a deep look into purchasing.

SELF-OP:

Our team will first assess the top items purchased and work with the client’s supplier to identify options to current purchases.  In many of the top categories of meat and dairy, we find the most money available.  For example, a client that partnered with Soriant was earning $2K per month in rebates.  By changing their buying practices, this client is now earning $24K in monthly rebates.  Before we make the change in items, Soriant asks the supplier to provide the nutritionals for any of the items that we are thinking of switching so the Registered Dietitians can give their input for the new item.  Once identified, we work with the supplier to work down inventory they brought into stock for us and plan the change over to the new items.

The vendors offer more than just the rebates for buying specific items, they also have incentives for quick pay, drop size, and even private label.  Soriant will look at how effectively the departments are taking advantage of all that is offered.  We will look at any purchase they make from any vendor to see if there is a possibility of moving it to the main supplier.  This will help with drop size and unlock additional dollars that are available just for making the purchase.

If the department has a contract service, we will also look at the purchases to determine what level of participation they have with their own program.  Soriant will also identify if the vendor is sharing any rebates with the client.  If the vendor is keeping all the rebates, we can renegotiate the contract on behalf of the client to get a share of the rebates.

The food service department has many decisions to make when it comes to recipe, food selection, and patient needs.  When Soriant is engaged, we help train the department to change their purchasing practices to maximize their purchasing power.

By |July 9th, 2018|Food & Nutrition|

About the Author:

Matthew Sedor has experienced a long and successful career in Support Service operations. Currently serving as a consultant, he has guided large hospital systems through systematic change, driving substantial supply chain and workforce results for his clients.