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Group purchasing saves big bucks. (Short Takes).

One way that hospitals and health systems are trying to keep costs down is through group purchasing organizations A group purchasing organization is an entity that leverages the purchasing power of a group of businesses to obtain discounts from vendors based on the collective buying power of the GPO members. Many GPOs are funded by administrative fees that are actually paid by the vendors. . A new study conducted for the Health Industry Group Purchasing Association found that group purchasing organizations (GPOs) saved hospitals between 10 and 15 percent ($12.8 to $19.2 billion) of the $128 billion in non-labor health care costs that were channeled through GPOs in 1999.

Non-labor purchases--such as pharmaceuticals, supplies, medical equipment and food--accounted for about 44.6 percent ($179 billion) of hospitals' total expenditures in 1999. Of this amount, approximately ap·prox·i·mate  
1. Almost exact or correct: the approximate time of the accident.

 72 percent ($128 billion) was purchased using group contracts. The study found that approximately one-third of the hospitals surveyed conduct purchasing over the Internet Internet

Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the
 and about 5 percent of their purchases are made online. Hospitals spent an average of 12.5 percent ($21.9 billion) of all non-labor expenditures on pharmaceuticals in 1999.

James James, person in the Bible
James, in the Gospel of St. Luke, kinsman of St. Jude. The original does not specify the relationship.
James, rivers, United States
 A. Hawkins is Publisher of Healthcare Briefings, a newsletter available in print, on cossette Cos`sette´

n. 1. One of the small chips or slices into which beets are cut in sugar making.
, via fax, and on computer disk He can be reached at 800/338-5486.
COPYRIGHT 2000 American College of Physician Executives
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Title Annotation:report by the Health Industry Group Purchasing Association
Author:Hawkins, James A.
Publication:Physician Executive
Article Type:Brief Article
Geographic Code:1USA
Date:May 1, 2000
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