With Growth Slowing, GPOs Under More Pressure to Show Value

While revenues for nationwide group purchasing organizations are expected to exceed $2 billion for the first time in 2010, the GPOs' growth is slowing, according to a release from Peasner Healthcare Research and Advisory.

GPOs' predicted 3.1 percent increase in 2010 revenues over 2009 would be relatively small, due to industry cost pressures, increasingly influential regional GPOs, supplier pressures, hospital self-contracting and constrained hospital admissions growth.

GPOs also face a long-running Senate investigation into their practices that is expected to gain momentum in 2010.

The two national GPOs not owned by hospitals, Broadlane and MedAssets, share a lower percentage of revenues with customers than the other GPOs and are under pressure to share more.

The large provider-owned GPOs, HealthTrust Purchasing Group, Premier and VHA, are also under pressure to deliver more value to customers and will continue branching out into other activities, such as clinical utilization programs, safety initiatives, consulting services and regional service centers.

Read Peasner Healthcare Research and Advisory's release on group purchasing organizations.