Ethics Governance
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Premier Inc Rebounds from GPA Scandal (Ethikos) Premier Inc Rebounds from GPA Scandal (Ethikos) May/June 2004 - By Andrew W. Singer. Spattered and Scorched, Premier Seeks The ‘High Road’Two thousand two was a year that hospital group purchasing organizations (GPOs) would just as soon forget.The New York Times ran a series of investigative articles through that year, the gist of which was that GPOs stifled competition and were rife with conflicts of interest. Government investigations and Senate hearings followed.Premier, Inc. (San Diego), the second largest GPO, was subpoenaed as part of an investigation into the buying practices of hospitals. Senator Herb Kohl (D-Wis.), chairman of the Senate Judiciary Antitrust Subcommittee, called Premier’s close financial ties to American Pharmaceutical, a supplier of antibiotics, "scandalous."1In April, Kohl and Senator Mike DeWine (R-Ohio) demanded "that GPOs produce a code of conduct within 90 days in response to concerns that life-saving medical devices were being shut out of hospitals by anticompetitive business practices of leading GPOs."By the end of 2002, the Times reported, "Over the last year, more than 100 hospitals have ended or reduced their dealings with the two companies, Premier and Novation, for-profit private companies that negotiate to buy drugs and medical supplies on behalf of nearly 4,000 hospitals."2The GPOs fought back, citing their own experts and studies, arguing that group purchasing was pro-competitive and socially beneficial. "If GPOs didn’t continue to save their customers money, healthcare organizations wouldn’t continue to use them," noted the president of one healthcare system.3Seeking ‘best ethical practices’In the end, however, it was clear that things had to change. Premier, Inc., which purchases $17 billion annually in hospital supplies—everything from floor cleaner and light bulbs to heart pacemakers and CAT scanners—decided that even the appearance of a conflict of interest was unacceptable. It hired business ethicist Kirk O. Full Article: http://www.singerpubs.com/ethikos/html/premier.html |
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2006 Ethics-Governance.com |
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