GAO report: GPOs keep costs of medical products and services down

by Heather Mayer, DOTmed News Reporter | September 28, 2010

But some argue that the report had no empirical evidence of cost savings provided by GPOs.

"The reports are troubling in that they provide no evidence that GPOs reduce costs or improve a hospital's purchasing power," said Mark Leahey, president and CEO of the Medical Device Manufacturers Association, in prepared remarks e-mailed to DOTmed News. "While MDMA supports the ability of hospitals to aggregate their purchasing power, if GPOs are funded by kickbacks from suppliers, this creates an inherent conflict of interest for the GPO, harms patient care, thwarts innovation and increases the cost of care."

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Sen. Chuck Grassley (R-Iowa) also said there is not enough empirical evidence to determine whether GPOs help to achieve significant savings for hospitals and others buying medical products.

"Whether group purchasing organizations are able to help save money on medical supply costs, or not, impacts federal health care spending," Grassley said in a statement. "There's no data with which to independently verify the effect, one way or another, and that's a shortcoming in the current system."

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