GAO examines group purchasing practices

The Government Accountability Office has reported that group purchasing organizations (GPOs) that buy tens of billions of dollars of supplies for the nation's hospitals have taken some small steps toward transparency.

The 24-page report examined the nation's six largest GPOs, which combined buy nearly $109 billion in supplies every year. In 2008, the GPOs collected contracting fees based on purchasing volume that ranged from 1.22 percent to 2.25 percent of the total amount. However, in some instances, fees went as high as 10 percent of the contract price for specific items.

The report analyzed the GPOs' efforts since the start of the decade to promote transparency and eliminate conflicts of interest, including the formation of the the Healthcare Group Purchasing Industry Initiative in 2005--which requires all members to fill out an annual disclosure questionnaire with more than 100 questions. According to the GPOs, this has prodded them toward negotiating more multi-vendor contracts and keeping fees down.

However, "no customers and only one vendor we interviewed commented on the impact of GPOs' codes of conduct on the potential for GPO conflicts of interest," the report noted. "A representative of this vendor said that he has not seen a lot of change regarding conflicts of interest."

For more:
- read the GAO report
- read the Healthcare Finance News article
- here's the HealthLeaders Media article

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