Myth:
FACT: |
GPOs save the healthcare system money.
Based on multiple reports, GPOs’ “savings” are questionable at best. supporting documentation In fact, a recent economic analysis determined that if the anti-kickback exemption was eliminated, hospitals would save nearly $5 Billion annually. supporting documentation
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Myth:
FACT: |
GPOs don’t influence what products physicians use on their patients.
Some GPOs prohibit a physician from utilizing a product that in not on contract UNLESS they receive permission from the GPO AND the incumbent vendor. supporting documentation
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Myth:
FACT: |
GPOs don’t choose products based on the fees paid by vendors.
GPOs consider fees as part of their selection process. In fact, many say that so long as the fee level is acceptable, price is not a concern. supporting documentation
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Myth:
FACT: |
The vendor fees are based on the GPOs’ cost of administering a contract.
The GPOs’ fees have little to do with the cost of administering a contract and everything to do with buying exclusivity. supporting documentation
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Myth:
FACT: |
Excess fees collected by the GPOs are returned to its member hospitals.
Over a 3-5 year period, 6 GPOs alone siphoned nearly $500 million from members towards the GPOs’ for-profit ventures. supporting documentation
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Myth:
FACT: |
The fees that go back to hospitals help reduce the cost of healthcare.
A government audit of the fees found that the majority of the hospitals receiving the GPO fees did not properly account for them in Medicare cost reports. supporting documentation
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Myth:
FACT: |
GPO Codes of Conduct and the Industry Initiative have fixed the problems with the GPO industry.
The Codes and Initiative are all self-policing, voluntary and include no penalties for non-compliance. A preeminent scholar stated during a congressional hearing, “I don’t think this Initiative amounts to much of anything.” supporting documentation
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Myth:
FACT: |
GPOs will go away if the GPO anti-kickback safe harbor is repealed.
GPOs have existed since the early 1900s and they operated for decades (until 1986) with funding from hospitals paying a nominal membership fee. Furthermore, repealing the exemption only addresses a GPO’s ability to collect fees from suppliers. GPOs would still be able to collectively bargain and operate under the current antitrust “safety zone”.
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