News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel

News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel
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Medical Device Manufacturers Association (MDMA) Claims Hospitals and Clinical Laboratories Don’t Get Best Pricing from GPO Contracts

Researchers Offer Evidence that Hospitals and Pathology Labs Often Negotiate Lower Prices on Their Own


Even as Congress shines a spotlight on the business activities of group purchasing organizations (GPOs), the Medical Device Manufacturers Association (MDMA) has made public a research study it initiated about GPO contract practices. This report says an inherent conflict of interest prevents GPOs from obtaining the lowest possible prices for its hospital and clinical pathology laboratory members.

On December 3rd, Dark Daily reported on the report published by the General Accountability Office (GAO) in response to a Congressional directive. The GAO determined that, during 2008, sales made under GPO contracts by members, including hospitals, clinical laboratories, and other types of healthcare providers, totaled $109 billion.

The six GPOs studied by the GAO earned a bit more than $2 billion in revenue for 2008. Of this, $1.7 billion came from administrative fees generated by contract purchases. The balance of $320 million was from fees generated by supply chain outsources, revenue cycle management, and consulting.

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Do GPOs Help Hospitals and Clinical Laboratories Save Money? GAO Report Answers That Question

GAO investigates certain business practices of group purchasing organizations


For years, hospitals and clinical pathology laboratories have wondered exactly how much money is saved when they use the services of group purchasing organizations (GPOs). Now a newly-published government report provides interesting details about the financial activities of GPOs.

In response to a Congressional directive, the Government Accountability Office (GAO) recently studied GPOs and released a report on their findings. The GAO’s report will be of particular interest for pathologists and medical laboratory managers working in hospital laboratories.

GAO Report Looks at GPO Activities in 2008

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