GPOs bring bottom-line benefits to long-term care providers, other healthcare organizations: report

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Group purchasing organizations are making costs lower for long-term care operators and other healthcare providers, asserts a recent report from the Healthcare Group Purchasing Industry Initiative (HGPII).

HGPII is a 10-member nonprofit organization founded in 2005 by the chief executives of nine GPOs, and is dedicated to “the development and improvement of accountability standards.” Each year, it surveys its members and releases a public accountability report. HGPII members represent “a large percentage of total GPO purchasing,” according to the report, which was released Feb. 15.

Many long-term care providers turn to GPOs to save on supplies. The 2013 report comes about 10 months after the Government Accountability Office questioned whether GPOs receive inappropriate administrative fee payments from vendors. Because these fees “are typically calculated as a percentage of each GPO customer's purchases through the GPO contracts,” lawmakers were concerned vendor fees may discourage GPOs from negotiating for the lowest prices for their customers.  

The HGPII report contradicts this idea, saying almost all members keep vendor fees at or below 3%.

"The HGPII model is based on a fair, open, and competitive contracting process that is free of conflicts of interest and any undue influence," said former Sen. Robert Bennett (R-UT). Bennett oversaw the HGPII review with former Sen. Byron Dorgan (D-ND) and former Rep. Philip English (R-PA).

The full report is available here.

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