Grassley demands more information on hospital middle-men

Sen. Charles Grassley (R-Iowa) said Monday that he wants proof that the purchasing intermediaries that buy medical products for hospitals actually save the government money.

Grassley said there is no empirical data that Group Purchasing Organizations provide any savings to the Medicare and Medicaid programs, which reimburse the hospitals for the care they provide to their beneficiaries. The ranking member on the Senate Finance Committee also released reports from the Government Accountability Office and his staff which he said reached the same conclusion.

"Whether Group Purchasing Organizations are able to help save money on medical supply costs, or not, impacts federal health care spending," Grassley said. "There’s no data with which to independently verify the effect, one way or another, and that’s a shortcoming in the current system."

GPOs have been under scrutiny before. In 2002, lawmakers questioned their administrative fees and sole-source contracting, among other things.