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July 20, 2006
For Immediate Release
Contact:
Michael McShane
HIGPA Vice President, Government Relations
202.367.1237
mmcshane@smithbucklin.com

July 20, 2006 ~ Lawton R. Burns, Ph.D., Director of the Wharton Center for Health Management and Economics at the University of Pennsylvania, recently released the preliminary summary of a survey he conducted that asked 4,500 hospitals to share their experience with the performance of their Group Purchasing Organizations (GPOs). Funded by the National Science Foundation, Dr. Burns’ study is among the only sources of truly current, objective data on the GPO industry that is available today.

Dr. Burns' research, which received no funding from group purchasing organizations, was based on a national survey of hospital materials management executives to query their views of group purchasing organizations and their business practices. Some of the questionnaire topics included:

• Areas where the GPO provides savings to the hospital
• Satisfaction with 37 different GPO activities and services
• Assessment of GPO contracting for physician preference items
• Assessment of GPO compliance with the industry Code of Ethics

Preliminary results of this survey show that hospitals reported overall satisfaction with their GPO and agreed that their GPOs provide them with "demonstrable cost savings and margin improvements." Dr. Burns’ data comes directly from hospital executives and shares their first-hand experience with GPOs. "I applaud Dr. Burns and the National Science Foundation for their efforts to go straight to the source - hospitals - to get an accurate picture of the value GPOs bring to the table in helping them manage the costs of providing care," says HIGPA Chairman, Al LoBiondo.

Respondents to the Burns survey also had the opportunity to express their views on the effectiveness of the Code Of Conduct for GPOs that was developed by HIGPA and delivered to the U.S. Senate. Roughly three-quarters of hospital executives who responded to the survey indicate they have reviewed the Code of Conduct that was developed by HIGPA. More than 80 percent feel the Code is strong enough in regulating conduct within the industry and more than 90 percent of executives believe that their GPO always or nearly always complies with the Code.

Wharton researchers are currently analyzing the survey findings in greater detail and will release a comprehensive report of results when it becomes available.

The Health Industry Group Purchasing Association (HIGPA) is a broad-based trade association that represents 30 purchasing organizations (Industry Members) and over 120 of their trading partners (Affiliates). 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 partners span the range of the supply system, including all types of manufacturers, as well as distributors, wholesalers, and organizations involved with e-commerce.

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