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Viewpoint
November 13, 2018

Group Purchasing Organizations, Health Care Costs, and Drug Shortages

Author Affiliations
  • 1Department of Surgery, Johns Hopkins University School of Medicine, Johns Hopkins University, Baltimore, Maryland
  • 2Department of Medicine, Johns Hopkins University School of Medicine, Johns Hopkins University, Baltimore, Maryland
  • 3Department of Health Policy and Management, Johns Hopkins Bloomberg School of Public Health, Johns Hopkins University, Baltimore, Maryland
JAMA. 2018;320(18):1859-1860. doi:10.1001/jama.2018.13604

Most medical centers today acquire supplies, medications, and devices through group purchasing organizations (GPOs) rather than directly from a manufacturer. GPOs are intermediaries that catalog medical supplies so medical centers can purchase them from manufacturers. According to the American Hospital Association, 68% of hospitals used a GPO for their main purchasing needs in 2000, and by 2014, an estimated 98% of hospitals used a GPO.1 The nation’s largest GPO, Vizient Inc, claims to own 30% of the national market for all medical supplies, and, collectively, the 4 largest GPOs in the United States account for 90% of the market for medical supplies. In this Viewpoint, we explore the role of GPOs in health care, concerns with their current payment structure, and potential solutions.

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