How Group Purchasing Can Help Senior Living Communities Combat Inflation

Rising inflation has been an ongoing concern in the senior living industry since 2022. Many have already tightened their belts and are looking for new ways to be more cost-conscious in this unpredictable era. While occupancy rates are predicted to rise throughout 2024, concerns about the impact of inflation continue to keep senior living providers up at night.    

That’s because Inflation has already driven up the costs of labor, services, energy and real estate, sometimes into the double digits. The cost of medical supplies and services is also increasing, jumping 8.4% in 2024. This has hit communities with assisted living and skilled nursing facilities especially hard. That said, there are still several effective strategies for managing inflation in your community.

The Power of Group Purchasing in Senior Living 

One effective method of combating inflation in senior living communities is group purchasing. Group purchasing allows communities to collaborate with others in the same industry to leverage collective buying power. This includes negotiating pricing discounts and securing more favorable terms from suppliers.

How Group Purchasing Benefits Senior Living Providers

Here’s how to counteract the impact of inflation with group purchasing, driving greater cost savings while continuing to provide exceptional value to residents.   

Access to Procurement Experts 

Procurement can be complex, especially in the senior living industry. A group purchasing organization gives you access to expert vendor account managers who navigate these complexities — such as price increases, product additions and discontinuations, and supply issues or shortages. When you join a group purchasing organization, these experts go to work for you, offering guidance on cost-saving strategies and product selection. They can also use the collective leverage of this purchasing power within vendor product categories to ensure more competitive pricing. 

This can be especially helpful during times of supply disruptions or shortages (which are often impacted by inflation). With an expert in your corner, you’re empowered to make more informed decisions for your community. As an added bonus, you’ll also reduce time spent managing multiple vendors and contracts, as your new partner will manage this for you. 

Greater Economies of Scale

When you pool your purchases with other communities, you can achieve economies of scale with bulk purchasing. Many group purchasing organizations, like Care Purchasing Services, offer a vendor portfolio that includes food services, medical supplies, therapy, pharmacy, plant operational supplies and more. This can lead to significant cost savings, so your budget goes further, helping you counteract the impact of inflation. 

Purchasing as a group also gives you greater negotiating power, meaning you can get more favorable terms and pricing with suppliers that a single community or provider simply couldn’t achieve on their own. Your vendor account managers can help with rebates, cost savings analysis, and offer advice on streamlining processes.

Improved Adaptability