December 14, 2010 13:01 ET

Nation's Largest Hospitals Say Medical Device Group's Proposal on Health Care Group Purchasing Organizations Would Drive Health Care Costs Higher

Letter to MDMA Chairman From VHA Member Organizations Challenges Findings in Recent Report, Says Small Hospitals "Would Lose Access to the Critical Help Their GPOs Provide in Monitoring and Controlling Supply Costs"

IRVING, TEXAS--(Marketwire - December 14, 2010) - Fourteen of the nation's largest hospital systems sent a letter to the chairman of the Medical Device Manufacturers Association today asserting that the trade group's position on health care group purchasing organizations is "unbelievable," and would drive the costs of delivering health care across the country higher. The hospital letter profoundly disputes findings in a recent device association report, saying that health care costs would rise without the involvement of GPOs, not fall as the industry group suggests.

"Our decades of experience negotiating with manufacturers tell us that it is implausible to think device manufacturers would voluntarily reduce prices for any sustained period of time if GPOs were funded directly by hospitals, as your report suggests," the hospitals wrote. The group of fourteen hospitals emphasized the negative impact the MDMA proposal would have on smaller hospitals, saying that many "would lose access to the critical help their GPOs provide in monitoring and controlling supply costs."

The major health care systems that sent the letter to MDMA Chairman Eamonn P. Hobbs, include: Allina Hospitals & Clinics, Minneapolis; Baptist Memorial Health Care Corp, Memphis, Tenn.; BJC HealthCare, St. Louis; Clarian Health, Indianapolis; Mayo Clinic, Rochester, Minn.; Memorial Hermann Healthcare System, Houston; New York - Presbyterian Hospital, New York; Novant Health, Winston-Salem, N.C.; OhioHealth, Columbus, Ohio; Premier Health Partners, Dayton, Ohio; Providence Health and Services, Renton, Wash.; Spectrum Health, Grand Rapids, Mich.; Sutter Health, Sacramento Calif.; and Yale New Haven Health System, New Haven, Conn.

All of the systems are members of VHA Inc., the national health care network, and belong to VHA's Large IDN Supply Network, or LISN, a select group that works with VHA on key supply chain initiatives.

In writing the letter, the health care systems noted that they employ thousands of people and serve urban and rural communities with patients spanning the economic spectrum -- including Medicare and Medicaid beneficiaries and those without insurance. The systems also pointed to the billions of dollars they spend annually on the medical supplies and devices used in the daily care for patients.

"Make no mistake," the letter's authors noted, "our own internal purchasing teams are savvy professionals who understand the complexities of the health care supply marketplace. Yet every day, our teams voluntarily turn to VHA and its supply contracting company Novation because these organizations help us find the best products for the best prices." 

The authors said that part of the impetus for the high-level letter was a need to stress the changes underfoot at all hospitals following the passage of federal health reform and the support hospitals receive from health care GPOs on cost and quality initiatives. "Neither the health care community nor the country as a whole can afford the type of disruption and increased cost that your organization [MDMA] is advocating," they wrote.

In addition to sending the letter to chairman Hobbs, the hospitals sent copies to Senators Patrick Leahy, Charles Grassley, Herb Kohl, Bob Corker, Max Baucus and Orrin Hatch.

A full copy of the letter can be accessed at VHA's News Room.

About VHA -- VHA Inc., based in Irving, Texas, is a national network of not-for-profit health care organizations that work together to drive maximum savings in the supply chain arena, set new levels of clinical performance and identify and implement best practices to improve operational efficiency and clinical outcomes. In 2009, VHA delivered record savings and value of $1.47 billion to members. Formed in 1977, VHA serves more than 1,350 hospitals and more than 30,000 non-acute care providers nationwide, coordinating delivery of its programs and services through 16 regional offices. VHA has been listed as one of the best places to work in health care by Modern Healthcare since 2008 and one of the best places to work in IT by Computer World since 2007.

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