Leroy Schwarz, a professor of operations management at West Lafayette, Ind.-based Purdue and one of the researchers, described game theory as a “laboratory study” and noted that the study addressed group purchasing in a situation with one GPO, one manufacturer selling a single product and multiple providers.
The study found that providers' total purchasing costs are not affected by contract administrative fees, or CAFs, which vendors pay GPOs they contract with. “Among other things, we conclude that although CAFs affect the distribution of profits between manufacturers and GPOs, they do not affect the providers' total purchasing costs,” wrote the researchers.
The study also looked at the effect of GPOs on the manufacturers they contract with, finding that a company's profit “does not change or decrease as the GPO's CAF increases” and that a company's profit and profit share “does not change or increase as the GPO's contracting efficiency increases.”
The Health Industry Group Purcashing Association, a trade group, promoted the finding and hosted a phone call for reporters featuring the lead author of the study, which was funded by Purdue and described by HIGPA as "independent of industry."