Ex­pand­ing their hori­zons

GPO sur­vey shows pur­chasers ven­ture into new di­rec­tions, such as ed­u­ca­tion

Modern Healthcare - - Special Feature - Shawn Rhea

Mod­ern Health­care’s sev­enth an­nual Group Pur­chas­ing Sur­vey shows that GPOs con­tinue to di­ver­sify their of­fer­ings of ser­vices be­yond tra­di­tional sup­plier con­tract­ing in an ef­fort to ad­dress the grow­ing de­mands of their mem­bers, who are grap­pling with a health­care sys­tem un­der re­form.

Among the non­tra­di­tional ser­vices that group pur­chas­ing or­ga­ni­za­tion sur­vey par­tic­i­pants in­di­cated they now of­fer are con­tin­u­ing med­i­cal ed­u­ca­tion, en­vi­ron­men­tally pre­ferred con­tract­ing, technology as­sess­ment and clin­i­cal qual­ity bench­mark­ing (See chart, p. 26).

“We’ve ex­panded our ser­vices into ar­eas like pro­duc­tiv­ity and la­bor man­age­ment, con­sult­ing ser­vices like rev­enue-cy­cle im­prove­ment, IT im­ple­men­ta­tion—any­thing that would ad­dress cost con­cerns,” says Randall Wal­ter, ex­ec­u­tive vice pres­i­dent of en­ter­prise so­lu­tions for St. Louis-based GPO Amer­inet.

This year Mod­ern Health­care made re­vi­sions to the an­nual sur­vey in re­sponse to rec­om­men­da­tions made by GPOs through the Health In­dus­try Group Pur­chas­ing As­so­ci­a­tion. The ques­tion­naire was sim­pli­fied and re­duced to 18 mul­ti­part ques­tions from 43 mul­ti­part ques­tions. In ad­di­tion, the new sur­vey in­cludes a sec­tion where GPOs are asked to iden­tify the range of ser­vices they pro­vide to mem­bers. Re­spon­dents were also asked to pro­vide ver­i­fi­able doc­u­men­ta­tion to sup­port the fi­nan­cial fig­ures re­ported in their sur­vey re­sponses.

The sur­veys were sent to GPOs and were also made avail­able on­line be­tween April 26 and July 9. Six GPOs com­pleted the sur­vey, and 11 de­clined to par­tic­i­pate (See chart, p. 28).

“There wasn’t a need for us to par­tic­i­pate in the sur­vey be­cause Premier makes vir­tu­ally all of this in­for­ma­tion avail­able on our pub­lic web­site,” Mike Alkire, Premier’s pres­i­dent, said in a writ­ten state­ment. “More­over, we’re un­com­fort­able with the method­ol­ogy but look for­ward to work­ing with Mod­ern Health­care to im­prove it.”

Eleven GPOs com­pleted sur­veys in 2009 and 16 par­tic­i­pated in 2008.

In ad­di­tion, Mod­ern Health­care hosted a con­fer­ence call on Aug. 9 with the sur­vey par­tic­i­pants to dis­cuss their re­sponses.

Of this year’s six par­tic­i­pat­ing GPOs, MedAs­sets had the high­est mem­ber pur­chas­ing vol­ume in fis­cal 2009, ac­count­ing for some $24 mil­lion in goods and ser­vices bought by health­care providers com­pared with $19 mil­lion in 2008 (See chart, p. 27). Amer­inet, which had the sec­ond-high­est pur­chas­ing vol­ume among sur­vey par­tic­i­pants, ac­counted for $7 mil­lion in mem­ber-pur­chased goods and ser­vices com­pared with $6.6 mil­lion in 2008.

Only one of the re­port­ing six GPOs—Hos­pi­tal Pur­chas­ing Ser­vice—is a not-for-profit or­ga­ni­za­tion. Four are pri­vate, for­profit com­pa­nies and one— MedAs­sets—is a pub­licly traded, for-profit com­pany.

Re­gard­ing ser­vices, Amer­inet and MedAs­sets in­di­cated of­fer­ing the widest va­ri­ety of ser­vices with some dis­tinc­tion be­tween the two com­pa­nies. Amer­inet, for ex­am­ple, does pub­lic pol­icy work on be­half of its mem­bers where MedAs­sets doesn’t. MedAs­sets, how­ever, pro­vides ware­hous­ing ser­vices where Amer­inet does not.

Based on post-sur­vey con­ver­sa­tions with par­tic­i­pat­ing and non­par­tic­i­pat­ing GPOs, a broad­en­ing of ser­vices be­yond con­tract­ing ap­peared to be a sig­nif­i­cant goal of GPOs dur­ing the past year. Many pointed to health­care re­form as the cat­a­lyst for their ex­pan­sion into new ser­vice ar­eas such as com­par­a­tive ef­fec­tive­ness and ac­count­able care or­ga­ni­za­tion devel­op­ment.

Even be­fore the pas­sage of health­care re­form, leg­is­la­tors sent a strong sig­nal that com­par­a­tive ef­fec­tive­ness—us­ing post­mar­ket pa­tient-out­come and cost data to guide treat­ment de­ci­sions—would play a sig­nif­i­cant role in the new health­care sys­tem. To date, ap­prox­i­mately $3.7 bil­lion has been al­lo­cated un­der the Amer­i­can Re­cov­ery and Rein­vest­ment Act of 2009 and health­care re­form leg­is­la­tion to the devel­op­ment of com­par­a­tive ef­fec­tive­ness re­search. Some of that money will be used to con­tract with agen­cies to per­form such re­search.

Eu­gene Sch­neller, a pro­fes­sor of sup­ply-chain man­age­ment at Ari­zona State Uni­ver­sity’s W.P. Carey School of Busi­ness, says he ex­pects to see GPOs not only us­ing com­par­a­tive-ef­fec­tive­ness data to guide their mem­bers’ ac­qui­si­tion of med­i­cal prod­ucts, but also de­vel­op­ing re­search for the na­tional data­base that will even­tu­ally be cre­ated. “If they don’t do it, they’ll be at a real dis­ad­van­tage,” Sch­neller says of GPOs.

The need for providers to build new care­de­liv­ery sys­tems is pre­sent­ing a chal­lenge to GPOs—one that sev­eral say they are gear­ing up to tackle.

“GPOs will need to look at how hos­pi­tals can deal with bun­dled pay­ment,” says Ni­cholas Sears, chief med­i­cal of­fi­cer for the Al­pharetta, Ga.-based GPO MedAs­sets. Sears says he be­lieves providers will look to GPOs for guid­ance in set­ting up work­able ACOs, which will share payer re­im­burse­ment and re­spon­si­bil­ity for a pa­tient’s care. “We’ve gone down the path of look­ing at the rev­enue side of things, which is why I think we’re par­tic­u­larly well-suited to help hos­pi­tals with ef­forts to form ACOs,” Sears says.

Wal­ter: “We’ve ex­panded our ser­vices into ar­eas.”

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