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GPOs Driving Up Hospitals' Medical Device Costs, Say Manufacturers

Jeff Elliott for HealthLeaders Media, October 12, 2010

GPOs are, of course, expressing their displeasure with the results of the study. "All independent, empirical, and nonindustry studies of GPOs—including examinations by the GAO, FTC, DOJ, academia, and the 8th Circuit Court of Appeals—have found that GPOs save hospitals money," said Health Industry Group Purchasing Association (HIGPA) President Curtis Rooney in a statement. "Hospital purchasing executives are smart shoppers in an aggressive and competitive market, and they voluntarily turn to GPOs to help them find the best products for the best deal."

Rooney also called the study's claims that device manufacturers would voluntarily reduce their prices under a new GPO model a "slap in the face" to healthcare providers that participate in GPOs.

The trade group representing the healthcare industry's GPOs says their efforts to improve transparency, accountability, and fair product discounting have been validated by a federal government report released last month.

A Government Accountability Office report interviewed GPOs, hospitals, and device vendors, and determined that hospitals increasingly rely on GPOs as the primary means to help keep the costs of medical products and services in check.

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