New analysis finds GPOs save healthcare industry and taxpayers up to $34.1 billion annually

The Healthcare Supply Chain Association (HSCA), which represents healthcare group purchasing organizations (GPOs), has announced a new analysis of data from the Centers for Medicare and Medicaid Services (CMS) which found that GPOs save the healthcare industry up to $34.1 billion annually and will reduce healthcare spending by up to $456.6 billion over the next ten years. The report found that GPOs reduce supply-related purchasing costs to nursing homes and hospitals by 13.1 percent compared to providers who do not use GPO services.

Dobson DaVanzo & Associates analyzed the National Health Expenditure (NHE) data published by CMS along with data collected from a survey of healthcare providers that use GPO services and reached the following conclusions about the value of GPOs to the U.S. healthcare system:

·   GPOs save the entire healthcare system up to $34.1 billion annually, and will save the healthcare industry $456.6 billion over the next ten years (2017-2026).

·   GPOs reduce supply-related purchasing costs to hospitals and nursing homes by 13.1 percent compared to providers who do not use GPO services.

·   GPOs generate $8.7 billion annually in Medicare cost-savings and will save Medicare $116.3 billion over the next ten years.

·   GPOs save Medicaid $6.8 billion annually and will generate $90.1 billion in Medicaid cost-savings over the next ten years.

To help determine GPO cost-savings, the authors surveyed hospital and nursing home provider networks that used GPO services in their purchases and received responses from stakeholders representing 530 facilities with a total business volume of $59.7 billion. The report combined the survey data with the National Health Expenditure (NHE) data published by CMS and incorporated updated estimates from the Federal Register on the non-labor proportion of hospital and nursing home spending to ensure an accurate representation in the data.