A new Government Accountability Office study on group purchasing organizations has found that GPOs' efforts to save hospitals money is meeting with mixed success.
GPOs' savings impact mixed: GAO
The study, "Group Purchasing Organizations: Services Provided to Customers and Initiatives Regarding Their Business Practices" (PDF), was conducted at the request of Sen. Chuck Grassley, ranking member of the Senate Finance Committee.
According to the study, GPOs have adopted industrywide codes of conduct to address potential conflicts of interest associated with their vendor-contracting practices and to tackle concerns that some vendors may be locked out of opportunities to supply products and services to healthcare providers. The impact of those codes met with mixed assessments from healthcare providers and vendors, however. GAO officials found that, for example, a number of GPOs have moved away from sole-source contracting to address concerns about vendor lockout. But the move to multisource contracts has in some cases resulted in higher prices for products.
All six of the GPOs that participated in the study reported that the codes of conduct have prompted them to cap or lower the administrative fees they charge vendors on products sold through GPO-negotiated contracts. But an initiative to open contracting opportunities to vendors with innovative products has, apparently, met with less success.
In a companion report (PDF) issued by the Senate Finance Committee staff, Grassley said that GPOs lack empirical data to support the claim that they save hospitals money. "There is no data with which to independently verify the effect one way or another, and that's a shortcoming of the current system," he said.
"We urge people to read the GAO report for themselves to get unbiased, non-political information proving that GPOs operate in a competitive market that is working and bending the healthcare cost curve,” said Health Industry Group Purchasing Association President Curtis Rooney, in a news release.
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