Consumer groups push for antitrust investigation of hospital suppliers

A coalition of nine consumer advocacy groups sent a letter to the Federal Trade Commission Nov. 22 urging it to open an antitrust investigation into group purchasing organizations.

If accepted, the FTC would open a 6(b) study, which would allow the agency to take action if it believes abuses are taking place.

The advocacy groups argue that group purchasing organizations are stifling competition among medical suppliers, artificially raising costs and unnecessarily making the country dependent upon unreliable overseas supply chains.

A release from the American Economic Liberties Program, one of the nine advocacy organizations, points to procurement contracts and government-sanctioned exemption from the federal Anti-Kickback Statute as two of the ways GPOs are abusing the system. The GPOs' practices may contribute to the skyrocketing healthcare costs and hospital and drug supply shortages. It also states these practices jeopardize patient safety and national security.

"Three GPOs – Vizient, Premier, and HealthTrust – manage procurement for 90 percent of medical equipment today, leaving health care providers and small producers with little bargaining power," the letter to the FTC said.

An industry group, the Healthcare Supply Chain Association, responded on behalf of the GPOs.

"Group purchasing organizations play a critical role in the healthcare supply chain, identifying and sourcing high-quality products at the best value for healthcare providers so that they can deliver safe and effective care for patients," Todd Ebert, president and CEO of the association, said in an email to the Ohio Capital Journal. "GPOs operate in a voluntary, competitive environment where their members drive contracting decisions and portfolio development. Key federal agencies including the Federal Trade Commission, Department of Justice, and Government Accountability Office have reviewed GPO practices many times and have consistently reaffirmed their value to the healthcare system. The organizations who signed the letter are focused on exhuming decades-old literature and criticisms rather than highlighting the wealth of studies and reports available on GPO cost-savings and competitive practices."

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