HIGPA – An Opportunity in an Inquiry

By Curtis Rooney

Prior to leaving for the Congressional “August Work Period,” Senators Herb Kohl (D-Wis.), Bill Nelson (D-Fla.) and Charles E. Grassley (R-Iowa) sent seven of the major GPOs, all members of the Health Industry Group Purchasing Association (HIGPA), a letter requesting information on their current business practices. In summary, the senators want to know more about GPO bid processes; sole source, dual source, multi-source contracting; bundling; administrative fees and more. The companies involved have made it clear to the Senate that they welcome the opportunity to provide this information because they believe that they have a great story to tell about healthcare cost savings, supply chain efficiency and patient safety. The senators may be surprised to learn that the GPO industry is one of the most transparent industries in healthcare today.

In fact, the senators will find that most of the information they’ve requested is available to them and others on a public Web site (www.healthcaregpoii.org). The Healthcare Group Purchasing Industry Initiative (HGPII), a stand-alone organization coordinated by Richard Bednar, is devoted to ethics and principles of good business practices. Its 14 member organizations have agreed to govern themselves by using a set of principles that require each member to have their own code of conduct that is published and available to the public.

In addition, HGPII understands that codes of conduct are not always enough. As a result, it has created an annual questionnaire, available online, that addresses over 100 individual questions and sub-questions concerning the GPO business. For example, individual companies must provide answers to questions concerning bid processes; sole source, dual source, multi-source contracting; bundling; fees, etc. All are public.

To enforce these matters, the GPO industry adopted the public transparency route as the primary method. Because the details in those questionnaires contain so much information, if a GPO isn’t being honest or accurate in its disclosure, anyone can call them on it. HGPII members also understand that another element of an effective compliance program is to look for areas for clarification and improvement. HGPII has consistently invited any comments or suggestions, and annually holds a Best Practices Forum for this purpose. In fact, it has become a common practice for HGPII to invite members of the Senate and their staff to attend this annual event in Washington.

At the same time the Senate issued its letter, the New York Times ran a story by Mary Williams Walsh entitled “Senators Investigate Medical Supply Purchasing.” Unfortunately, the story resurrected old claims against GPOs, and aside from the Senate letter, did not actually contain “news.” It is apparent from the piece that Walsh chose not to contact the people most knowledgeable about GPOs, including hospital CEOs, respected researchers or satisfied suppliers. For example, had the Times contacted Lawton Burns, a well-regarded professor at the Wharton School, Walsh would have learned that in a recent report published on behalf of the National Science Foundation, Burns concluded that these claims by a very small number of medical device manufacturers were “more smoke than fire.” She also failed to contact Professor Gene Schneller from Arizona State University, who found in a new study of over 420 hospitals that GPOs have a significant role in supply chain efficiency and provide hospitals with over $36 billion in annual savings. Finally, Walsh mentions a “whistleblower” who worked in the industry for six months a decade ago. The only “news” here – and what she failed to note – is that the Department of Justice wouldn’t touch the whistleblower case.

While Americans around the nation debate various elements of healthcare reform, the GPO industry is leading the way in reducing costs, improving quality and allowing healthcare providers to help their patients. When the Senate looks at the GPO industry, it will probably like what it finds.