HIGPA: GPOs Continue to Lead on Supply Chain Transparency

Healthcare reform doesn’t always have to come from Capitol Hill. In fact, sometimes it doesn’t have to come from government at all. The Healthcare Group Purchasing Industry Initiative (the “Initiative”) was formed in 2005 by nine of the nation’s leading GPOs to promote and monitor best ethical and business practices in purchasing for hospitals and other healthcare providers. Recently it announced plans to establish two new important reforms in the group purchasing industry:

  • Creation of an independent process for healthcare suppliers to file business grievances in connection with the GPO contracting process.
  • Convening of an independent ethics advisory panel to provide objective and independent guidance toward continued compliance with the highest ethical standards.

Following these developments, the Initiative called upon other industries in the healthcare supply chain to follow the lead of the GPO industry and improve their efforts regarding transparency.

The Initiative completed its fifth annual Best Practices Forum in Washington, D.C., in early March. The purpose of this annual event is to gather industry leaders and hear from members of Congress, Capitol Hill staff, ethicists and outside industry experts, and to discuss how the GPO industry can work to further demonstrate its commitment to continuous improvement. At the recent forum, industry leaders discussed how they could advance supply chain ethics and compliance regardless of the outcome of healthcare reform efforts, including the Physician Sunshine Payments Act, which would require manufacturers of medical devices and pharmaceuticals to report on payments to physicians and physician-owned entities.

The Initiative was assisted in developing the independent ethics advisory panel and an independent grievance process by esteemed ethics experts, including:

  • Patricia Harned, Ph.D., president, Ethics Resource Center, Arlington, Va.
  • Michael Hoffman, Ph.D., founder and executive director, Center for Business Ethics, Bentley University, Waltham, Mass.
  • Lori Tansey Martens, founder and president, International Business Ethics Institute, Washington, D.C.

The Initiative also accepted a proposal developed by the Health Industry Group Purchasing Association to create a dues category for dual membership for small GPOs (that is, those with annual sales volume of under $100 million). This new dues structure is a three-year package deal, which allows the nation’s smallest GPOs to receive assistance in filling out the Initiative’s required questionnaire and attend the Best Practices Forum, while receiving all HIGPA membership benefits.

These latest steps will provide an additional layer of ethical oversight in the healthcare sector and reinforces the idea that the GPO industry is the most transparent industry in health care. That much is evidenced by the fact that the Initiative maintains:

  • A core set of principles to which every member commits.
  • A requirement that each member maintain a code of conduct.
  • An annual questionnaire signed by the chief executive officer of the GPO.
  • A Web site that makes these answers public www.healthcaregpoii.com.
  • The annual Best Practices Forum, which members are required to attend and which invites participation from outside of the organization.

About the Author

Curtis Rooney

Curtis Rooney is president of the Healthcare Supply Chain Association, www.supplychainassociation.org