PBGs vs. GPOs

First, some clerical housekeeping: 

• PBG = Physician Buying Group
• GPO = Group Purchasing Organization 

The difference between PBGs and GPOs is a frequent topic of confusion, so today we’re going to set the record straight. 

PBGs & GPOs have the same function

Both of these types of organizations help medical practices gain previously unrealized saving by aggregating purchasing volume and using that leverage to negotiate discounts with suppliers. 

Medical practices can become members of either type of organization in much the same way, and the financial structures at play in both cases are extremely similar. 

So PBGs and GPOs do essentially the same things. But there is one major difference in their capabilities. 

PBGs & GPOs have different capabilities

The Limitations Of GPOs

GPOs specialize in aggregate purchasing for large medical practices, such as hospitals. They do not accept new member practices unless they meet certain size requirements. These, of course, vary from one GPO to another, but generally, only large practices are able to work with GPOs. 

The Flexibility Of PBGs

PBGs can also meet all of the needs of large hospitals and healthcare centers, but their powers do not stop there. PBGs can also serve the needs of even the smallest medical practices. 

PBGs can aggregate the supply needs of a large group of small practices to negotiate volume discounts with suppliers. These are the very same discounts that larger practices enjoy. 

So, to put it simply, PBGs do everything that GPOs do, except that they can work with small businesses too