A new study shows group purchasing organizations lower overall purchasing costs for U.S. hospitals and other providers, particularly small ones, according to a release by the Health Industry Group Purchasing Association.
The study, conducted by faculty at Purdue University and sponsored by the university, also found that:
- If GPOs did not exist, hospitals would pay higher total purchasing costs.
- GPO administrative fees have no effect on the total purchasing costs of any provider.
- Competition among GPOs for hospital business in the same market likely lowers prices.
- Large hospitals that are part-owners of their GPO receive lower per-unit and total purchasing costs as a result.
The study, which used game theory to explore the impact of GPOs, will be published in Manufacturing & Service Operations Management, the journal of the Manufacturing and Service Operations Management Society.
"As the president, Congress and all parties to the health care delivery system search for ways to contain healthcare costs, group purchasing organizations continue to demonstrate that they are a critical piece of the cost-savings solution," said HIGPA President Curtis Rooney.
Read the HIGPA release on the study of group purchasing.
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