Dirty Medicine
Investigative journalist Mariah Blake's July 2010 Washington Monthly exposé of group purchasing organisations (GPOs) — the medical-supply middlemen that, through exclusive contracts and a 1986 "safe harbour" exemption from anti-kickback law, effectively decide what hospitals can buy and at what price. Blake reports on how the system has narrowed competition, made certain critical drugs and devices scarce or substandard, and pushed up costs for both patients and the health-care system.
Opens on washingtonmonthly.com · Curated by GlobeRead
GlobeRead's Take
American health-care debates tend to focus on the visible players — insurers, hospitals, drug manufacturers — and miss the quieter intermediaries who actually decide which medicines and devices reach a patient's bedside. Blake's piece is a useful corrective and an unusually clear-eyed look at how a single regulatory carve-out from 1986 reshaped an entire industry. The article is old enough now to read partly as history, but the structures it describes remain largely intact.nnThe central villain is the group purchasing organisation. GPOs negotiate supply contracts on behalf of hospitals, in theory delivering bulk-buying savings. The 1986 "safe harbour" provision exempted them from federal anti-kickback statutes, meaning vendors can legally pay GPOs for the privilege of being recommended to hospitals — an arrangement that, in any other industry, would look indistinguishable from a kickback. The unintended consequence has been a market structure in which a small number of GPOs effectively pick winners and losers among medical suppliers.nnThe second hinge is the human cost. Blake documents how the system has produced periodic shortages of vital drugs and devices when GPO contracts squeeze out smaller manufacturers; how innovative new products have struggled to reach hospitals when an incumbent supplier holds the contract; and how, in extreme cases, patients have been harmed by lower-quality substitutes selected for cost. The piece names hospitals, products, and clinicians who tried to push back and were rebuffed.nnWe picked this because it remains one of the cleanest pieces of reporting on a part of American health care most patients do not know exists — useful for anyone trying to understand why US medicine is so expensive, so opaque, and so structurally resistant to reform. The disturbing question Blake leaves you with is whether "dirty medicine" is a deviation from the system or, by design, its defining feature.
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