34
The Journal of Healthcare Contracting recently published an article by HIGPA President Curtis Rooney that further examines the findings of a recent Purdue University academic analysis entitled “The Impact of Group Purchasing Organizations on Healthcare-Product Supply Chains.”
Key conclusions of the study and of its lead author, Professor Leroy Schwarz, include:
• GPOs decrease overall purchasing costs for hospitals and providers, particularly for small providers; • If GPOs were removed from the healthcare marketplace, hospitals would pay higher total purchasing costs; • GPO contract administrative fees have no effect on the total purchasing costs of any provider, large or small; • Competition among GPOs in the same market for hospital business likely lowers per-unit prices for hospitals; • Many large hospitals are part-owner of their GPO and experience lower per-unit and total purchasing costs as a result.