Itís Not Just GPOs

Edition: February 2003 - Vol 11 Number 02
Article#: 1462
Author: Repertoire

Pondering this issueís articles about group purchasing, I keep coming back to one thought: The real battle in our market, reflected by last springís hearings on group purchasing by the Senate Subcommittee, isnít so much between GPOs and manufacturers as it is between small manufacturers and big ones. GPOs may reflect that battle, they may even hasten or intensify it, but Iím not so sure they cause it.

Small manufacturers Ė especially those who focus on new technologies Ė are frustrated. They feel locked out by providers. They feel that even though they may have a better story to tell, their bigger competitors get all the ďair timeĒĖ the advertising, the contracts, the open doors, the benefit of the doubt. Customers want to go with proven winners, and those are usually the market share leaders. Is it any surprise that thatís what the groups bring to them most of the time?

Think of it this way: What would happen if GPOs went away? Would the problem Ė that is, the inability of manufacturers of new technologies to make it in the market Ė go away, too? If you believe that hospitals turn away new technology today because they have group contracts that prohibit them from considering it, then you would answer ďyes.Ē

But Iím not so sure. I wonder if hospitals turn away new products and equipment because they simply lack the time, energy or will to drop what theyíre doing and consider all the claims that the manufacturer is making. I wonder if they use their group contracts as an excuse not to consider new technology.

To focus on GPOs, to assign them sole blame or even the lionís share of it for the inequities of the marketplace, is misguided. Thatís not to say that GPOs are blameless. The Senate hearings and the New York Times articles showed us otherwise. No, thereís no doubt that GPOs need to be reined in, to be held accountable.

But it seems to me that the problem is bigger than some GPO guys who want a bunch of administrative fees. Itís about providers who lack the staff to evaluate every new technology that comes their way, who want to protect their investment in technologies they already own, who are afraid to risk changing out their current equipment and training their staff on new equipment. Itís about big manufacturers with advertising budgets, salespeople, longstanding relationships with providers and distributors, credibility, service, a track record and market share. And itís about small manufacturers who lack the same.

Itís not about GPOs Ė at least, not just about GPOs.