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A Final Word on GPOs

Executive Summary

Changes will likely come as a result of the intense public scrutiny that the GPO industry has been under for the past year, a scrutiny encouraged and to a large degree prompted by small medical device companies. The question of precisely in what ways leading GPOs will operate differently is, itself, an important part of the public debate. Yet, it's hard not to conclude that, no matter how GPOs reform themselves, the debate itself has left some fundamental questions on the table.

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Reforming Group Purchasing: How Far is Far Enough?

For the past year, hospital purchasing groups have been under a spotlight, as Senate investigators and major media investigate charges that groups have done more harm than good in favoring large product companies. One of two groups at the center of the crisis, Premier, says it is cleaning up its act-and even hired an ethicist to help-but its take on necessary reforms embraces a broad, big-picture view of hospital/GPO relationships. MedAssets is taking more of a back-to-basics approach that stresses flexibility and choice in contracting options while helping members address the escalating costs of physician preferred products. The challenge for GPOs: the pressure to reform comes at a time when competition for hospital customers is fierce, in part because the financial pressure on hospitals has never been greater.

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