Group purchasing organizations reduce costs for healthcare providers, while promoting competition, according to a new report from the Healthcare Supply Chain Association.
For the report, three industry experts — including two former Federal Trade Commission leaders — conducted an in-depth economic and legal analysis of GPO business models and how they affect the healthcare industry.
Here are three main report findings.
- GPOs cut costs for healthcare providers, patients and taxpayers. Providers usually achieve 10 to 20 percent savings by using GPOs to negotiate lower prices and decrease transaction costs.
- GPOs promote competition. The supply procurement market is highly competitive in healthcare, as providers have numerous GPOs to choose from and sometimes use multiple GPOs concurrently.
- The current GPO funding model is the most effective system. GPOs' vendor administrative fee model yields cost savings and switching to a different funding mechanism would likely raise healthcare costs, according to the report.|
To view the full report, click here.
More articles on supply chain:
5 drugmakers in the headlines
Medline enters distribution agreement for antimicrobial laundry cleaner
FDA halts production at Alabama drug compounder over unsanitary conditions