KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Lawmakers Investigate Hospital Purchasing Practices

Health care institutions spend $60 billion a year on medical supplies, but little information is available about how that money is spent – often through "group purchasing organizations"  that hospitals join – because of opaque contracting and negotiating practices, the New York Times reports. Senators from several committees are now investigating the practices because they are concerned that the G.P.O.s may be inflating the prices of goods at the expense of taxpayers, who ultimately pay for much hospital care through the Medicare program. The senators have sent letters requesting information about G.P.O business practices, contracts and payments from the seven largest purchasers.

The Times reports: "Curtis Rooney, the association's president, said that he and the companies had met with the senators' staff members this summer and explained their business activities in full. He said he was surprised that the senators still wanted more data. 'This is probably the most transparent industry in the whole health care system,' he said ... The senators' line of questioning suggests they want to know whether vendors are using the contracting companies to quietly channel money and in-kind donations to hospitals, building brand loyalty at taxpayer expense" (Walsh, 8/13).

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