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April 23, 2007

(Washington)-The following statement was issued by Curtis Rooney, President, Health Industry Group Purchasing Association (www.higpa.org):

"Today’s Medicare Trustees 2007 report brought sobering news. In declaring a ‘Medicare Funding Warning,’ the trustees projected expenditures will show for the second consecutive year that more than 45% of Medicare’s finances will come from general revenue dollars. That means tough choices lie ahead.

While we understand there will be calls to restrain all federal spending, dramatic cuts to these important programs could damage an already unstable health care system. Allowing this to happen would be devastating to hospital services for the elderly, children, the poor and disabled. At a time when hospitals are striving to improve patient safety and quality of care through investments in information technology systems, rebuilding aging infrastructure and addressing workforce shortages, every dollar is precious to our healthcare system."

"This report strongly underscores the need to increase utilization of services and practices that bring real, tangible savings to the system. In that regard, Group Purchasing Organizations (GPOs) are part of the solution to the challenges facing the program. Results from a Muse & Associates study indicate that hospitals save between 10 and 15 percent by purchasing through GPOs."

"GPOs have a proven track record of helping hospitals and other health care providers boost their purchasing power, increase savings, reduce costs, improve efficiency and protect quality of care by purchasing medical devices, pharmaceuticals and other products at significantly discounted prices."

"As Congress and the Administration work to ensure the sustainability of Medicare, HIGPA and its member companies stand ready to be part of the solution to what the Trustees called ‘enormous, but not insurmountable, challenges.’"

The Health Industry Group Purchasing Association (HIGPA) is a broad-based trade association that represents 28 purchasing organizations. HIGPA's group purchasing members include for-profit and not-for-profit corporations, purchasing groups, associations, multi-hospital systems and health care provider alliances.

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