Group purchasing organizations see $36B savings for US hopsitals

When US President Barack Obama and Congress weigh health care reform options to rein in runaway medical costs, they should take a close look  at the largely unheralded work of "group purchasing organizations,"  which already are achieving over $36.0 billion in annual health care and  related costs savings in the USA, according to a new study of 429  hospitals and over three million hospital admissions by Eugene  Schneller, principal of the US firm Health Care Sector Advances and  professor at the Arizona State University School of Health Management  and Policy.

Group purchasing organizations are large national groups and smaller  regional entities that achieve health care cost savings by aggregating  their health care buying volume and then using that leverage to  negotiate discounts with manufacturers, distributors and other vendors.  They negotiate on behalf of hospitals and affiliated health care  providers to contract for the best value in their purchase of supplies  and services.

Titled, The Value of Group Purchasing 2009: Meeting the Needs for  Strategic Savings, the new Health Care Sector Advances report by Dr  Schneller with data collection by Mathematica Research, finds the  following results from GPOs as part of the $36.0 billion in projected  direct price savings: