From the March 2011 issue of HealthCare Business News magazine
Another common misconception is that GPOs make decisions for the sake of GPOs, rather than responding to the wishes and needs of their health care facilities. Nothing could be further from the truth. hospital materials resource departments and clinicians within the hospital make the decision to go with a GPO contract or not based on the product and value, not the fact that there is or is not a GPO agreement. GPO membership is voluntary and can be terminated at any time with notice. Hospitals are not required to purchase through their GPO contracts, but most do, with 96 to 98 percent of all American hospitals voluntarily belonging to one or more GPO.
GPOs are among the most heavily studied and examined sectors within the health care industry. All independent, empirical, and non-industry studies of GPOs – including examinations by the Government Accountability Office, Federal Trade Commission, Department of Justice, various academics, and the 8th Circuit Court of Appeals – have found that GPOs save hospitals money.
Numed, a well established company in business since 1975 provides a wide range of service options including time & material service, PM only contracts, full service contracts, labor only contracts & system relocation. Call 800 96 Numed for more info.
Over my 50 years in the group purchasing sector, I’ve found the bottom line is cost savings. Congress recognized the cost savings benefits of GPOs and created regulations to protect these savings. The Safe Harbor regulation will continue to allow GPOs to benefit hospitals and other health care providers, especially during a time of reduced budgets and patient resources.
Derwood B. Dunbar, Jr. is the former president and chief executive officer of the Mid-Atlantic Group Network of Shared Services, Cooperative (MAGNET).
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