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GROUP PURCHASING ORGANIZATIONS

GROUP PURCHASING ORGANIZATIONS : How GPOs Reduce Healthcare Costs and Why Changing Their Funding Mechanism Would Raise Costs A Legal and Economic Analysis Dan O Brien, Jon Leibowitz, and Russell Anello Table of Contents I. Executive summary ..3 II. Introduction ..5 The GPO Safe GPOs reduce healthcare costs ..6 Competitiveness of the GPO Effects of vendor funding of The neutrality principle ..7 Transaction costs ..7 Addressing concerns about vendor funding.

member providers.2 They do not take title to or possession of medical products. Rather, the central ... Customer surveys show that providers realize savings of 10% to 18% by using GPOs, measured relative to the costs providers would have incurred if they negotiated prices on their own. These savings are likely to be especially

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