by
Loren Bonner, DOTmed News Online Editor | November 01, 2012
From the November 2012 issue of HealthCare Business News magazine
How relevant are group purchasing organizations in today’s changing health care environment? We gathered responses from a variety of stakeholders and opinion leaders to see what the future might hold for GPOs.
As hospitals continue to face mounting financial pressure, their GPO partners are more relevant today than ever, both in terms of helping hospitals stretch their budget dollars and in the evidence-based sourcing of medical products and services. A recent survey of hospital purchasing managers by L.E.K. Consulting indicated that more than 60 percent of survey respondents are increasing their GPO use in 2012, which is up from more than 50 percent last year. The independent L.E.K. survey also showed that smaller hospitals anticipate even greater adoption than larger hospitals, and that the variety of products that hospitals are purchasing from GPOs is also expanding from low-cost, high-volume product categories with minimal perceived product differentiation to high-cost, low-volume equipment. L.E.K. suggests that med tech companies should foster strong relationships with GPOs and develop strategies to work with this growing market channel. Those knowledgeable about health care spending understand the value of having a strong relationship with their GPOs.
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Curtis Rooney, president of the Healthcare Supply Chain Association.
I’ve given up trying to predict what the future holds for GPOs. All I do know is what should happen. The 1987 Medicare anti-kickback “safe harbor” exemption must be repealed in order to restore integrity and free market competition to this corrupt industry. When a 2001 60 Minutes segment and the 2002 New York Times investigative series “Medicine’s Middlemen” (I assisted on both of these projects) prompted the Senate Antitrust Subcommittee to hold hearings on anticompetitive GPO practices and other abuses, I felt certain that Congress would move quickly to do that. I was wrong. What I didn’t reckon on was the immense financial clout of the GPO lobby. By buying Congress, they’ve managed to dodge every bullet—at least so far.
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Phil Zweig, financial journalist and author who has long-standing interest in the GPO issue.
