Cost-efficient spine practices may appeal to group purchasing organizations
Spine surgeons and practices should be aware of opportunities possible through group purchasing organizations that are changing the landscape of health care, a presenter at the North American Spine Society Annual Meeting said.
“A GPO is a group purchasing organization. It is a company that negotiates prices for drugs, devices, medical products, as well as medical services, as well as health care providers,” Chester J. Donnally III, MD, said at the meeting, which was held virtually.
Some large organizations are becoming GPOs, like Walmart, Citibank and Amazon, and these are a force in health care that spine surgeons and practices must recon with, he said.
“The formation of these larger health care providers and GPOs is not just a matter of time. It’s already happening. It’s important and inevitable that specialty practices must prove that they provide cost-efficient care or else they will be excluded from these providers,” Donnally said.
Also known as purchasing alliances or pooling alliances, GPOs “don’t actually own anything. They don’t own the facilities. They don’t own medications. They don’t own spine bracing, pedicle screws – they don’t own any of that,” he said.
Donnally, of Texas Spine Consultants LLP, said the strength of GPOs is the thousands of potential negotiations these organizations can make with buyers and vendors and innumerable transactions that are possible. They profit from “administrative fees that are solicited by the vendors,” which is a legal and fully acceptable practice that is not considered a kick-back per past investigations by governmental agencies, he said.
Haven Healthcare, the health care organization formed after Amazon, Berkshire Hathaway and JP Morgan Chase joined forces and became a GPO in 2018, is being trialed by about 30,000 workers in Arizona and Ohio, Donnally noted. The goal, he said, is to see whether such an organization is possible and to determine the savings that might be had by the companies when these are self-insured and own their own health care company.
Based on his review of the Haven Healthcare website, Donnally said it states Haven Healthcare is “interested in working with clinicians, as well as insurance companies, to improve the health care, but they will only be an ally of those who work to make health care better for patients.”
Collapse
Donnally III CJ. What is a GPO (group purchasing organization) and are Amazon and Walmart the next ones? Presented during Healthcare disruption and finance: To brace or embrace at: North American Spine Society Annual Meeting; Oct. 6-9, 2020 (virtual meeting).
Read more about