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February 26, 2008

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

"Today's report by the Centers for Medicare and Medicaid Services (CMS) Office of the Actuary and published in the journal Health Affairs reinforces the already foreboding news that the future of healthcare spending in the United States is a problem that can't be ignored. With healthcare growth projected to be 6.7 percent annually for the next decade, and 19.5 percent of the gross domestic product (GDP) in ten years, healthcare executives and policy makers will need to utilize everything at their disposal to ensure the right choices are made."

The CMS analysis states that growth in health spending is expected to outpace that of GDP by an annual average of 1.9 percent. Hospital spending growth is expected to accelerate from 7.0 percent in 2006 to 7.5 percent in 2007 and prescription drug spending is projected to accelerate through 2017.

"The CMS analysis clearly shows the need to increase the role that Group Purchasing Organizations (GPOs) play in aggregating products and services for hospitals and other healthcare providers which effectively increase healthcare savings or at the very least reduce the rate of growth of healthcare spending. The GPO industry stands ready to provide solutions to the challenges facing the nation. Recent studies show that hospitals save between 10 and 15 percent by purchasing through GPOs. GPOs have strong record of providing both public and private sector savings."

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