A Senate Judiciary antitrust subcommittee expanded its sights to four group purchasing organizations that so far have flown under the radar screen of congressional scrutiny.
In letters distributed today, subcommittee Chairman Herb Kohl (D-Wis.) asked the GPOs -- AmeriNet, Broadlane, Consorta and MedAssets HSCA -- to note reforms under way at Premier and Novation and to consider implementing some of their own, in particular "new business-practice commitments similar to those made by Premier."
A congressional source said Kohl might extend his request to one or two additional GPOs at a later date.
Kohl noted in his letter that the Senate Judiciary Antitrust, Competition, and Business and Consumer Rights Subcommittee has spent the better part of 2002 investigating the difficulty innovative medical technology has in reaching the hospital marketplace. "We have learned . . . that GPOs are at the nerve center of our healthcare system," he said. "They determine what products are in our hospitals . . . They are powerful gatekeepers that can cut off competition and squeeze out innovation."
With power comes responsibility, Kohl said. While pleased with the commitments made by Premier and Novation, other GPOs must follow suit, he said. "Only if all the major participants in the GPO industry agree to such reforms can we conclude that voluntary actions will be sufficient to resolve this issue and avoid congressional action," Kohl said.
With one exception, the four letters are virtually identical. But in his letter to Consorta, Kohl said an August announcement that Consorta had struck a five-year, sole-source agreement with Tyco was "troubling." The industrywide code of conduct adopted in July should have "prompted some greater scrutiny at Consorta of the competition implications of entering into such agreements," he said.
At deadline, officials at AmeriNet and Broadlane said they had not received the letters and could not comment. Consorta officials could not be reached for comment.
"We're comfortable with our code of conduct and its focus on all the major issues raised by Sen. Kohl's office," said John Bardis, president, chairman and CEO of MedAssets HSCA. "We are happy to work with Sen. Kohl's office to ensure in the next phase of interaction that we have the proper documentation and administrative processes reflecting the key issues that the senator was focused on."
Premier and Novation reached separate but very different accords with the subcommittee in August. For one, Premier agreed to limit contracts for all products to three years and to offer a choice of contracts to its hospital members for physician-preference items. Novation, on the other hand, reserved the right to award an exclusive contract when there is no viable alternative.
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