How GPOs Can Use Tax Automation to Improve Healthcare Outcomes

The medical industry is one of the most dynamically evolving sectors, with rapid advancements in technology and a growing demographic that demands comprehensive solutions. However, alongside these opportunities come significant tax challenges that require precise navigation to ensure compliance and operational efficiency.

Complexities of Indirect Tax in the Medical Industry

Tax rules vary widely for diagnostic equipment, treatment devices, and medical supplies. While many healthcare purchases are exempt from sales and use tax, evolving regulations, business growth, and new technologies add layers of complexity. Often, innovation in healthcare moves faster than tax laws can keep up. Each product stock keeping unit (SKU) needs to be carefully categorized for tax purposes, which makes manual processing overwhelming. 

The Role of Healthcare Group Purchasing Organizations (GPOs)

GPOs play a pivotal role in the procurement process for healthcare providers. By pooling the purchasing power of multiple hospitals, GPOs negotiate both quality and discounts with manufacturers and distributors—helping reduce costs while ensuring access to essential medical equipment.

However, their influence goes beyond pricing. GPOs also put together contracts that hospitals can use when making purchasing decisions, though the final say on which supplies to buy always rests with the healthcare providers themselves. In fact, GPOs are so essential to healthcare that 97% of U.S. hospitals use at least one—often several—to cut costs and stay agile as clinical services and regulations shift, per the Haslam College of Business. 

Vertex O Series for Medical Helps GPOs Reduce Costs and Improve Medical Quality

Vertex O Series for Medical automates and streamlines tax determination for medical equipment, devices, and supplies across global markets—aligning with GPOs’ mission to lower healthcare costs and enhance care quality. Covering over 430 global taxability categories—including consumer use tax, VAT, GST, and sales tax—this solution helps manufacturers and wholesalers confidently manage complex regulations.

Here’s how Vertex O Series for Medical delivers value:

• Cost Predictability: Automatically updates tax content to ensure accurate calculations and reduce the risk of over- or underpayment.
• Exemption Management: Applies stored exemptions during ordering and billing to minimize manual work and avoid overpayments.
• Compliance & Efficiency: Keeps organizations aligned with tax rules through automation and real-time content, improving audit readiness.
• ERP Integration: Connects seamlessly with leading healthcare ERPs to unify tax visibility and streamline operations.

Addressing Indirect Tax Challenges Together

By integrating Vertex O Series for Medical, GPOs help healthcare organizations automate tax determination, reduce compliance risk, and boost operational efficiency. With industry-specific content and automated updates, healthcare organizations stay audit-ready and focused on delivering quality care—instead of getting bogged down by tax compliance. Together, Vertex and GPOs offer a strategic solution for cost control, regulatory alignment, and better healthcare outcomes.