The Senate Judiciary antitrust subcommittee warned the Department of Defense to be cautious in its effort to contract out medical and surgical supply purchasing to a private hospital group purchasing organization. In a May 2 letter to Defense Secretary Donald Rumsfeld, subcommittee Chairman Mike DeWine (R-Ohio) and ranking minority member Herb Kohl (D-Wis.) said that based on the subcommittee's yearlong investigation of the hospital group purchasing industry, GPO cost savings are in dispute. They also said GPOs often use contracting tools that limit choice and flexibility and that not all GPOs rebate savings to all participating hospitals. The senators advised the department to consider the results of the subcommittee's investigation but also noted that several GPOs have agreed to eliminate sole-source contracts and adopt other pro-competitive business practices. GPO industry sources were uncertain what prompted the letter. Premier's senior vice president for communications, Pat Poston, said the alliance had "moved proactively over the past two years to further assure its group purchasing program is not subject to the concerns expressed in the letter." -- by Cinda Becker
Senators warn Rumsfeld about working with GPOs
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