In my nine years as a materials manager, I've learned through trial and error what a group purchasing organization is and isn't. Here are six myths and misconceptions I once held about GPOs.

1. GPOs and distributors are the same, right? Wrong. Many mistakenly believe that their surgical supply distributor is their GPO. Here's how to separate the two: Your distributor (a vendor or wholesaler) supplies products and your GPO gets good contracts on everything your facility uses, not just what a distributor is able to provide. A GPO is a membership organization that negotiates contract discounts for all its members. It is the purchasing power of the combined membership that is the incentive for manufacturers and vendors to provide discounts to GPO members.

2. I buy from my GPO. No, you don't buy from your GPO. You buy from vendors — at GPO pricing. A GPO isn't responsible for getting you supplies in an emergency, creating delivery schedules and accepting online orders. This is the domain of your distributor. Many also mistakenly believe that their GPO only covers pricing for their distributed items, not such direct purchase, physician preference items as implants and other surgical devices that you buy from the manufacturer.

3. My vendors know which GPO I'm with. Wrong. Always remind your vendor which GPO you're with. Vendors may only provide GPO pricing if you ask for it. If you order a new product from your rep, be sure you remind him to load your GPO pricing and make sure your letter of commitment is signed and submitted. Otherwise you may pay list price (ouch!). You depend on your GPO to negotiate the best contracts with your vendors. To gain those benefits, do your part by notifying your vendors that you're a member of a GPO.

4. It's better to join several GPOs. This is a matter of opinion, but I think it's a bad idea to belong to more than one GPO for the simple reason that you dilute your GPO's negotiating power when you shop more than one. No single GPO has the best price on every item, but all of the bigger GPOs essentially have the same abilities to do the same basic things. It's easier to track and manage your usage with one GPO, as you're more likely to comply with letters of commitment and enjoy contract pricing from vendors, some of which provide tiered pricing based on purchasing volumes. In 2008, my surgery center did an average of 980 procedures per month. Time (or lack of it) is a factor for all of us, and going to multiple vendors for GPO-contracted pricing on the same item isn't worth the time. My efforts are better spent strengthening the connection with the supply chain members I have in place. Not everyone agrees with me. Outpatient Surgery Magazine's online poll (n=42) found that 55 percent of respondents belong to one GPO and 43 percent belong to more than one.

5. GPOs have steep membership fees. Considering the value GPOs bring, the cost to join one is a bargain. So how do GPOs make money if they don't mark the product up and charge a modest membership fee? Manufacturers, distributors and other vendors of products and services with whom GPOs have contracts pay a fixed administrative fee to the GPO. One GPO's administrative fee ratio ranges from 0.25 percent to 3 percent of the purchases its customers make through contracts with its vendors.

6. GPOs limit your freedom to purchase what you want. To save the most, you go with the GPO's best-contracted price. But you won't get arrested if you buy sharps containers, needles, syringes or breathing circuits not on the GPO's contract. A similar situation exists with local contracts. If you're able to negotiate a price through your local rep that beats the GPO contract price, go with the local contract. I've done so a few times, including for hernia mesh. If an item is not on contract, your rep can help find out if a GPO contract is available for that item or help you find an equivalent substitute on a GPO contract.