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Unsung Heroes of Health Care Reform?: $36 Billion in Annual Savings Linked to 'Group Purchasing Organizations' in Major Survey of Over 400 Hospitals
Date:4/29/2009

GPOs Are a Proven "Solution at Hand" as President Obama, Congress Explore Health Care Cost Cuts; With Financial Woes of U.S. Hospitals Worsening, More Savings from GPOs Are Possible

WASHINGTON, April 29 /PRNewswire-USNewswire/ -- When President Barack Obama and Congress weigh health care reform options to rein in runaway medical costs, they should take a close look at the largely unheralded work of "group purchasing organizations" (GPOs), which already are achieving over $36 billion in annual health care and related costs savings in the United States, according to a new study of 429 hospitals and over three million hospital admissions by Dr. Eugene S. Schneller, principal, Health Care Sector Advances, Inc. and professor at the Arizona State University School of Health Management and Policy.

Dr. Schneller is Dean's Council of 100 Distinguished Scholar at Arizona State University and co-director of the Health Sector Supply Chain Research Consortium. He has held teaching and research posts at Montefiore Hospital and Medical Center, Duke University Medical Center, Union College, Albany Medical Center, and Columbia University. Dr. Schneller is the author of over 35 journal articles as well as the co-author of Strategic Management of the Health Care Supply Chain (Jossey-Bass).

Group purchasing organizations are large national organizations and smaller regional entities that achieve health care cost savings by aggregating their health care buying volume and then using that leverage to negotiate discounts with manufacturers, distributors and other vendors. GPOs negotiate on behalf of hospitals and affiliated health care providers to contract for the best value in their purchase of supplies and services.

Titled, "The Value of Group Purchasing 2009: Meeting the Needs for Strategic Savings," the new Health Care Sector Advances report by Dr.
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SOURCE Dr. Eugene S. Schneller, Arizona State University; Health Care Sector Advances, Inc.
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