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Senators and Hospital Groups Support New GPO Transparency Initiative

PR Newswire
July 12, 2005

Initiative is Most Extensive, Voluntary Disclosure of Ethical and Business Practices Undertaken by Any U.S. Industry, Experts Say

WASHINGTON, July 12 /PRNewswire/ -- A group of U.S. Senat ors and the nation's largest hospital associations today expressed support for an industry-led initiative that encourages health care group purchasing organizations (GPOs) to abide by the highest ethical standards and business practices.
GPOs pool the purchasing needs of hospitals, health systems and other providers to lower the cost of buying drugs, supplies and medical devices, helping hospitals provide quality patient care while controlling costs. The new Healthcare Group Purchasing Industry Initiative establishes six core principles of ethics and business conduct and then tracks how participating GPOs implement those principles.

Nine of the nation's largest GPOs, representing an estimated 80 percent of the country's GPO volume, have signed on to the Initiative, which commits them to extraordinary levels of transparency and disclosure.

"This GPO Initiative is the most extensive, voluntary disclosure of ethical and business practices undertaken by any industry in the country," said Kirk O. Hanson executive director of the Markkula Center for Applied Ethics and professor at Santa Clara University who serves as the interim coordinator for the Initiative. "The steps taken by these GPOs represent a new standard in ethical business practices and challenge others in the health care supply chain to operate with similar transparency."

The result of several years of internal industry review and consultations with the U.S. Senate, the Initiative has been well received both by key Senators and by health care associations whose members benefit from working with GPOs.

Sen. Jon Kyl (R-AZ), a member of both the Senate Finance and Judiciary committees said that the Initiative's transparency and accountability will "provide important support for technological innovation in American health care, which ultimately benefits patients."

Sen. Chuck Schumer (D-NY), also a member of the Senate Finance and Judiciary committees, noted the role GPOs play in controlling health spending, "With health care costs soaring through the roof, GPOs perform an extremely valuable service for our hospitals and consumers. I am hopeful that with the steps the industry has taken, the Senate will not have to intervene."

Senate Judiciary committee members Sam Brownback (R-KS) and John Cornyn (R-TX) also offered support. Sen. Brownback noted the positive impact GPOs have in his state, "Hospitals across Kansas benefit from the low prices the GPO secures for their critical medical products and services." He said the Initiative "is a key step that will ensure the integrity of business practices in our health care system, and maintain its cost-effectiveness."

Sen. Cornyn added that, "GPOs provide cost savings to America's health care providers, which is particularly important to the many small and rural hospitals, nursing homes and clinics across my state. I am pleased that the GPO industry has launched this important project, and hope to see more GPOs join the Industry Initiative in the future."

Major hospital and health associations said they saw enormous promise in the ability of this Initiative to provide a fair and open marketplace for suppliers, which in turn gives patients access to high-quality medical products and services.

The American Hospital Association, Association of American Medical Colleges, Catholic Health Association of the United States, Federation of American Hospitals, National Association of Children's Hospitals, National Association of Public Hospitals and Health Systems, and the National Rural Health Association released a joint statement today underscoring the role GPOs play in containing health care costs and applauded the Initiative's leadership in developing such an open and transparent system.

The participating GPOs also announced the final details and timeline for Initiative action, as approved by the CEOs of the nine founding group purchasing organizations who serve on the Initiative's Steering Committee.

* Enhanced Commitment to Transparency. The industry questionnaire and
each company's individual response will be available to the public on
the Initiative's Web site ( The
questionnaire asks for extensive detail about ethical and business
practices. A summary Annual Report of all responses will be issued by
the Initiative's Coordinator and also will be available on the Web

* Accelerated Timing. Originally planned for release in the spring of
2006, responses to the GPO questionnaire will now be posted by October
1 of this year. Questionnaires already have been sent to participating
GPOs. The inaugural Best Practices Forum is planned for January 2006.

* Industry Outreach. The Initiative plans to expand industry
participation by inviting other GPOs to become involved this summer.

"As this Initiative has developed, the degree of disclosure we committed to has been ratcheted up many times," said Premier CEO Richard A. Norling, chairman of the Initiative's CEO Steering Committee. "We believe we've gone far beyond the Defense Industry Initiative and created a new gold standard for public disclosure and best practices."

About the Healthcare Group Purchasing Industry Initiative
Health care group purchasing organizations help health care providers meet one of their greatest challenges -- controlling costs while advancing quality patient care. The Initiative is a voluntary association of healthcare GPOs created in 2005 to encourage and sustain best ethical and business conduct practices in the GPO industry. The Initiative's founding members are Amerinet, Broadlane, Child Health Corporation of America, Consorta, GNYHA Ventures, Inc., Healthtrust Purchasing Group, MedAssets, Novation and Premier Inc. These companies include most of the largest group purchasing organizations in the United States, estimated to represent more than 80 percent of the volume purchased through GPOs. For additional information, please visit

CONTACT: Allison May Rosen, +1-202-339-0111,, for the Healthcare Group Purchasing Industry Initiative.

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