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March 21, 2006
FOR IMMEDIATE RELEASE
Media Contact: Michael McShane
Vice President, Government Relations, HIGPA
(202) 367-1237
mmcshane@smithbucklin.com

The Health Industry Group Purchasing Association (HIGPA) stated today how pleased it was with the outcome of last week’s Senate hearing. On March 15, the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights heard testimony on the issue of Group Purchasing Organizations and their effectiveness in promoting fair competition and cost savings for healthcare providers. The Subcommittee heard from Richard Bednar of the Healthcare Group Purchasing Industry Initiative (HGPII) and Mina Ubbing, CEO of the Fairfield Medical Center in Ohio, whose testimony effectively discounted that of Mr. Mark Leahy, Executive Director of the Medical Device Manufacturers Association (MDMA) and Dr. S. Prakash Sethi, Baruch College in New York.

In his testimony, Richard Bednar, Coordinator of the Healthcare Group Purchasing Industry Initiative (HGPII) stated “The testimony of Mr. Mark Leahy, Executive Director of MDMA, fails to disclose any detail in support of his sweeping allegations; much of what he alleged occurred years ago. The HGPII has been inspired by the Subcommittee, and holds strong promise for success, and deserves the chance to prove its effectiveness in assessing competition and quality healthcare products and services.”

In response to the testimony of Dr. S. Prakash Sethi, Mina Ubbing, said “As a hospital CEO that buys 63% of our products from a GPO, I know the true value that GPOs bring to helping keep the cost of medical supplies down. Last year my GPO saved my hospital $1.1 million. I also understand and rely upon the other services that the GPOs bring to me and my colleagues in other hospitals. It is unfortunate that Dr. Sethi does not understand the true and important role the GPOs play in our health care system.”

During the hearing Sen. Chuck Schumer (D-NY), a member of the Subcommittee on Antitrust, Competition Policy and Consumer Rights, voiced very strong support for GPOs and the role they play in helping hospitals pool their purchasing power so they are able to purchase products at the lowest possible cost. This combined purchasing power plays a key role in helping hospitals keep their costs of products and services manageable.

HIGPA chairman, Al LoBiondo, stated that he was, “glad that this subcommittee got to hear first- hand what an important, positive role GPOs play in the healthcare supply chain.” LoBiondo continued, “Group Purchasing Organizations that support the Healthcare Group Purchasing Industry Initiative will continue to move forward with our strong and independent self governing model. The Initiative was created and implemented earlier this year. We call on the Congress to take no action that will disrupt this new Initiative. Let’s give it time to work. Creating a new set of government regulations and a new bureaucracy to oversee group purchasing organizations is not the right course for Congress to take.”

In reaction to Dr. Sethi’s criticism of the HGPII initiative Richard Bednar observed that the witness was unfamiliar with the group purchasing Industry Initiative. “He criticizes the Industry Initiative yet it would appear that he has not looked at the Industry Initiative in depth. To our knowledge, he has not discussed his observations with any GPO and certainly not with me. If he had, he would have come to a different conclusion. If he had examined the Initiative in depth, he would have applauded its transparency and ethical leadership.”

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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