The Journal of Healthcare Contracting

HIGPA Harnesses Healthcare Debate
By Curtis Rooney

Every day seems to bring a new report suggesting that the end is near for the Medicare program. For example, the Henry J. Kaiser Family Foundation recently issued a document that stated "persistently high rates of growth in national health expenditures combined with demographic trends pose a serious challenge to the financing of Medicare in the 21st century." Typically, these reports fail to mention the work that group purchasing organizations do to save hospitals and other healthcare providers billions both now and in the future. These documents rarely, if ever, explain that GPO-created savings are ultimately passed on to vital government programs such as Medicare and Medicaid – and, more important, to taxpayers and patients.

As a result, the Health Industry Group Purchasing Association (HIGPA), the industry’s leading trade group, has embarked on a series of efforts aimed at ensuring that the GPO "savings" message is heard in Washington and around the nation.

First, HIGPA itself has been noticeably strengthened with the recent addition of HealthTrust Purchasing Group and Broadlane to its membership.
Second, HIGPA has been holding monthly meetings with industry government and public relations experts for over a year to craft its strategy and message for policymakers in Washington. Included in this effort are regular visits to House and Senate offices, opinion polling, and the development and active use of HIGPA’s new Political Action Committee. These meetings regularly involve in-depth discussions regarding political challenges as well as important legislative matters, such as proposed changes to the 340B Drug Pricing Program and the GPO safe harbor.
Third, HIGPA has reinvigorated its work with the Centers for Medicare and Medicaid Services to obtain greater clarity on potential issues arising from the Average Sales Price drug payment system.
Fourth, HIGPA has focused on developing better press relations. The most recent example of this is a "Letter to the Editor" published in the New York Times that demonstrated the value of GPOs in aggregating their purchasing power to contract for an annual 10 to 15 percent savings to government programs such as Medicare.

Given the current political climate and the growing interest in healthcare reform, the GPO industry must be prepared for the future. To demonstrate the importance of GPOs, HIGPA has begun working with noted supply chain expert Professor Eugene Schneller of Arizona State University to update and expand upon his earlier landmark study, "The Value of GPOs in the Healthcare Supply Chain."

Release of this study is expected to follow the presidential election, but precede the 111th Congress.

It is unfortunate that reports of the Medicare program’s demise may not be greatly exaggerated. It is HIGPA’s intention, however, to inform policymakers and the public of how important a role GPOs play in reducing healthcare’s overall rate growth. Building on its newfound strength, and armed with the right information, HIGPA is working to ensure that "the end" is not as "near" as some may think.

Curtis Rooney is president of the Health Industry Group Purchasing Association (www.higpa.org), Washington, D.C.