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The leveraged buy is out

R Haugh

    Hospitals & Health Networks
    |December 31, 1997
    PubMed
    Summary

    Regional healthcare systems are gaining purchasing power, challenging the dominance of national group purchasing organizations like Premier and VHA. These consolidated systems can negotiate better deals directly with suppliers.

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    Area of Science:

    • Healthcare Administration
    • Supply Chain Management
    • Health Economics

    Background:

    • National group purchasing organizations (GPOs) like Premier and VHA dominate the healthcare market.
    • Healthcare systems are increasingly merging to form larger regional entities.

    Purpose of the Study:

    • To investigate the evolving landscape of healthcare purchasing and supplier negotiations.
    • To assess the impact of regional healthcare system consolidation on GPO market share.

    Main Methods:

    • Analysis of market share dynamics between national GPOs and regional healthcare systems.
    • Qualitative assessment of member feedback regarding purchasing power.

    Main Results:

    • Regional healthcare systems are developing significant "buying muscle" through consolidation.
    • These systems report achieving better supplier deals independently, bypassing traditional GPOs.

    Conclusions:

    • Consolidated regional healthcare systems present a growing challenge to established national GPOs.
    • The trend suggests a potential shift in healthcare procurement strategies towards greater autonomy.

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