Healthcare Group Purchasing Organizations: Driving Quality Throughout the Healthcare System

BY TODD EBERT, INTERIM CEO OF HSCA

The COVID-19 pandemic has underscored the importance of ensuring a safe

and reliable supply of quality medical products. Patients and providers depend upon access to high-quality, affordable medical supplies, and shortages of such products or use of counterfeit or inferior supplies jeopardizes patient care. As the sourcing and purchasing partners to America’s acute and non-acute healthcare providers, healthcare group purchasing organizations (GPOs) are committed to ensuring quality and reliability throughout the healthcare system.

GPOs are supply chain leaders in quality assurance and take a comprehensive approach to purchasing that considers not only the competitive pricing offered, but also the quality of the manufacturer and the reliability and stability of supply. Because the United States Food and Drug Administration (FDA) plays an important role in assessing manufacturer quality, GPOs evaluate manufacturers according to Current Good Manufacturing Practices (cGMP) regulations and inspection reports issued by the FDA. Due to the stability and predictability of product demand that GPO contracts provide, manufacturers are increasingly willing to share quality-related data with GPOs, allowing GPOs to have greater insight into the quality and reliability of manufacturers when sourcing contracts.

As quality issues can often lead to drug shortages, GPOs help member hospitals lessen their exposure to shortages by evaluating manufacturer reliability and helping providers establish best practice purchasing procedures. GPOs help hospitals source and safely migrate to alternate products when shortages or quality issues arise, enabling providers to continue to provide high-quality, uninterrupted care to their patients. GPOs also work to identify additional manufacturers for products in shortage and help bring them to market as quickly as possible to help reduce product scarcity, prevent price spikes, and increase competition in the marketplace.

GPOs’ fierce commitment to quality helped to protect member hospitals from purchasing counterfeit or inferior goods during the COVID-19 pandemic, working around the clock to field thousands of inquiries and vet new manufacturers for compliance with standards set by the FDA and National Institute for Occupational Safety and Health (NIOSH) and ensure safeguards for product quality. GPOs also provided guidance to member hospitals on how health systems can protect against supply chain bad actors and how to safely vet products to ensure worker and patient safety. These efforts helped to ensure healthcare providers and physicians on the front lines were properly equipped and to care for COVID-19 patients, and that COVID-19 patients had access to quality products such as ventilators.

GPOs also leverage their unique line of sight over the entire healthcare supply chain to advocate for policy solutions that help incentivize quality, reliability, and a steady supply of products. For example, HSCA and its member GPOs advocated for provisions in the CARES Act that strengthened manufacturer reporting requirements to include certain information about active pharmaceutical ingredients and other raw materials, to help better prevent, assess, and address shortages of medical products needed for patient care in the U.S. HSCA also supported the Safeguarding Therapeutics Act, which enhanced FDA’s authority to destroy counterfeit drugs and medical devices at American ports of entry.

As the U.S. continues to address the COVID-19 pandemic and prepare for the challenges ahead, GPOs remain committed to driving quality and reliability throughout the healthcare system and working with healthcare providers to deliver the best products at the best value and enable first-class patient care.

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