The group purchasing industry's trade association, the Health Industry Group Purchasing Association, reorganized its governance and finance structures in a bid to improve transparency regarding the organization's mission of representing GPOs.
But it remains to be seen if the changes will lure nonmember GPOs to the association, which has been perceived by some as too close to the supplier side of the industry.
As of Jan. 1, the association no longer allowed suppliers to be part of the board, but suppliers can join HIGPA as an affiliate member. As part of that, separate accounts for the dues paid by suppliers and by GPOs will be formed to keep tabs on what the two types of members would be funding.
The suppliers' dues won't fund any of the lobbying efforts of the association, but they will pay for a new association research arm, to be called the Supply Chain Institute, which will have its own governance structure.
With the changes, the association board includes 12 members from the GPO industry or healthcare systems and one outside director. Previously, four of the 19 board members represented suppliers, two were outside directors and the remainder came from GPOs or healthcare provider groups.
How well the changes will be received by GPOs remains to be seen.
A spokesman for Broadlane, one of the largest GPOs that is not a member of the association, said the company will discuss the new structure with HIGPA and consider rejoining. Broadlane, which hasn't been a part of HIGPA for about three years, stopped affiliating with the association because it was concerned suppliers had too much financial and governing influence over HIGPA.
Similarly, Al LoBiondo, HIGPA chairman and vice president of supply chain management at the Greater New York Hospital Association, said nonmember GPOs have indicated they'd like to see how the changes are adopted before joining.
He said there were perceptions of conflicts of interest, and changes were made to ensure the association was representing the interests of the GPOs, which maintain that their role in the supply chain is to negotiate the best price on hospital supplies.
The new structure will eliminate any ambiguity among the association's efforts, which is important because GPOs must maintain nonconflicted advocacy positions to counter external threats, LoBiondo said.
One external threat to GPOs is another hearing investigating their practices being called by an antitrust subcommittee of the Senate Judiciary Committee. A spokesman for the committee's ranking minority member, Sen. Herbert Kohl (D-Wis.), said there are still plans to hold a hearing in 2006.
At a 2004 hearing, small devicemakers raised complaints that GPOs were hampering the free-market introduction of technologies by being too closely aligned with large manufacturers.
In an effort to ward off legislation, a separate GPO alliance called the Healthcare Group Purchasing Industry Initiative was formed in 2005. A main goal of the initiative is to develop industry ethical best practices and make them transparent.
Last week, the nine GPO members that are a part of the initiative posted some of their respective ethical guidelines on the initiative's Web site, healthcaregpoii.com, and this week they are scheduled to hold their first best practices forum in Nashville.
But despite the initiative's call for transparency, members of the media and the antitrust subcommittee were not invited to attend the meeting. "The intention is that the meeting will be a transparent session, but for year one to keep it to ourselves," said Richard Norling, president and chief executive officer of hospital alliance Premier and chairman of the initiative's steering committee. "Going forward, both representatives from government and from the media will be invited."
The initiative and the trade association are separate organizations, but in the long term the groups could work together, according to Jody Hatcher, a senior vice president at GPO Novation, who's serving on the HIGPA board for the first time beginning this year.
With HIGPA's governance now restructured, the association has turned its efforts on hiring a full-time executive director, and chose SmithBucklin Corp., an association management company, to help in that search. A HIGPA contract with consulting firm Robert Betz Associates expired at the end of 2005 with Robert Betz serving as its leader.