Hearings

Since 2002, the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights has held four hearings on the issue of hospital group purchasing organizations (GPOs). Under the bipartisan leadership of Senator Mike DeWine (R-OH), Chairman of the subcommittee, and Senator Herb Kohl (D-WI), ranking member of the subcommittee, many of the GPOs’ most questionable practices have been exposed.

"Hospital Group Purchasing: Lowering Costs at the Expense of Patient Health and Medical Innovation? "
April 30, 2002
The antitrust subcommittee criticized representatives from the country’s two largest GPOs – Premier and Novation – for the conflicts of interest inherent in their contracting practices. Lawmakers threatened Congressional action if companies did not reform themselves. “We have heard startling allegations of scandal and conflicts of interest,” said Sen. Kohl. “These practices are appalling and cannot be tolerated.” Despite assertions from GPO execs that the process is open and transparent, members of the subcommittee expressed concern regarding the sole-source contacts awarded to manufactures, saying that innovation was being stifled and patient safety threatened. Chairman DeWine said GPOs, in their quest for pure profit, had missed the original intent of why they were formed originally – to obtain the best products and the lowest prices for hospitals.
To read witness testimony and member statements, click here

"Hospital Group Purchasing: Has the Market Become More Open to Competition? "
July 16, 2003
During this hearing, lawmakers criticized GPOs for doing little since the first hearing to seriously reform their anticompetitive behavior, despite the subcommittee’s calls for change. Representatives from smaller device companies testified that they continued to have market access problems. Chairman DeWine commented that he was “puzzled’ by the rosier situation described by Premier and Novation, compared to complaints from smaller manufacturers. GPOs argued they would need more time to make proper changes.
To read witness testimony and member statements, click here

"Hospital Group Purchasing: How to Maintain Innovation and Cost Savings "
September 14, 2004
The third hearing conducted by the Senate’s antitrust subcommittee focused on whether a legislative fix in the form of continuous Congressional oversight would be required to keep GPO behavior in check. Sen. DeWine said he remained “concerned” about the possibility that certain GPOs would not adequately reform without the threat of penalties. Witnesses testified that while some progress had been made, anticompetitive contracting practices continued to deny patients access to cost-effective, life-saving technology, and once the spotlight on the industry faded, GPOs would likely revert back to their unfair business practices.
To read witness testimony and member statements, click here

"Hospital Group Purchasing: Are the Industry’s Reforms Sufficient to Ensure Competition? "
March 15, 2006
The fourth hearing sought to determine whether the self-policing code of conduct implemented by the GPO industry had gone far enough to curb anticompetitive practices. Three legislative proposals were discussed, including the repeal of the GPO “safe harbor” from the Medicare anti-kickback statute. Although invited to testify, no GPO executives chose to participate. Evidence presented during the hearing, including testimony from a business code of conduct expert, showed that the code has had little impact and would not be enough to keep GPOs in check. Evidence presented also detailed how GPOs continue to compromise the cost and quality of healthcare.
To read witness testimony and member statements, click here