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.
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