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FOR IMMEDIATE RELEASE
Contact: Michael McShane
Phone: 202-367-1237

Today the Health Industry Group Purchasing Association (HIGPA), released findings from a study conducted by Muse & Associates which used the example of the Medical Device Competition Act of 2004 (SB 2880) - a bill that was submitted but not enacted upon by the 108th Congress - to study the impact such a bill would have on the healthcare system. The Muse study found that such legislation would add additional costs to the healthcare supply chain, making it more expensive for providers and patients to obtain needed supplies and equipment.

In 2005, HIGPA commissioned Muse & Associates to study the impact legislative intervention in the group purchasing industry would have on the costs/savings GPOs provide to the healthcare supply chain. The Muse study entitled, Estimates of Costs/Savings of Various Legislative Proposals to Regulate Health Care Group Purchasing, found that:

• Full implementation of the Act would increase total direct U.S. health care spending by between $29.3 billion and $34.6 billion over the ten year Congressional budget scoring window.
• Full implementation of the Act would increase spending for Medicare and Medicaid programs between $1.2 billion and $9.7 billion.
• A one point, decline in savings providers were able to realize using GPOs would have increased Medicare expenditures an additional $613 million to $725 million in 2004.
• There are no savings to the healthcare system associated with the Act

HIGPA Chairman, Al LoBiondo says of the study findings, “The reality is that America’s healthcare system faces a demand for its services that is already becoming overwhelming. An aging population, uninsured patients and many other factors add to the skyrocketing cost of providing quality care to those who need it.” LoBiondo goes on to state, “This study reinforces just how much the group purchasing industry helps providers realize substantial savings in their supply and equipment purchases. If legislation were enacted that hinders our industry’s ability to continue to do so, it would put additional financial strain – to the tune of hundreds of millions of dollars - on an already overburdened healthcare system.”

HIGPA will continue to monitor Congress’ interest in introducing legislation to regulate the group purchasing industry. A copy of the complete report of the study conducted by Muse & Associates is attached or visit http://www.higpa.org/pressroom/pressrm_2006.asp.

The Health Industry Group Purchasing Association (HIGPA) is a broad-based trade association that represents 31 purchasing organizations (Industry Members) and over 120 of their trading partners (Affiliate Members). HIGPA's group purchasing industry members include for-profit and not-for-profit corporations, purchasing groups, associations, multi-hospital systems and health care provider alliances. Trading partner members span the range of the supply system, including all types of manufactures, as well as distributors, wholesalers, and organizations involved with e-commerce.

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