HIGPA’s Curtis Rooney weighs in on Medtronic’s decision to cancel some of its GPO contracts:
At a time when all participants in the healthcare delivery system are searching for ways to cut costs, Medtronic’s move will raise costs for hospitals. In summary, Medtronic’s decision puts price ahead of patients, not to mention taxpayers.
GPOs work on behalf of hospitals and other healthcare providers, and GPO contracts are based on strong competitive forces. Manufacturers compete with one another to win business by offering the best products and services at the best value. GPOs work hard to provide their members and clients a better, more accurate view into the cloudy world of physician-preference-item pricing. Medtronic’s abdication of this space all but assures hospitals will lose the ability to benchmark the price of these expensive products. The result is purely predatory. Medtronic’s contract cancellations will raise costs for everyone but Medtronic. Wall Street has already signaled its support by reacting positively to this news. Medtronic is a publicly traded company, not a charity, and the notion that circumventing GPOs will decrease healthcare costs does not withstand the slightest bit of scrutiny.
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