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HEAVE HO. It looks like Sen. Orrin Hatch (R-UT) slipped into the seat of former Sen. Mike DeWine (R-OH) on the Senate Judiciary Committee’s Antitrust Subcommittee as the ranking minority "foil" of Chairman Sen. Herb Kohl (D-WI). This has to be heartening news to the GPO industry, which has been dogged by the subcommittee for years, along with other federal agencies. Why?

1. Hatch is a long-time friend and supporter of the late President Ronald Reagan, who signed into law the safe harbor allowing GPOs to collect administrative fees from the vendors with which they contract. It’s the cornerstone of the anticompetitive arguments leveled against GPOs.

2. Amerinet Inc. shareholder Intermountain Healthcare is based in his territory. Intermountain is one of the more forward-thinking and progressive GPOs, which will give Hatch (and maybe Kohl, too) a different and fresh perspective to group purchasing operations rather than the cloudy, hyperbolic, unfairly stereotypical Chicken Little anecdotes extracted from two other prominent GPOs that we’ve heard ad nauseum for at least a decade as "how group purchasing really is."

3. The Subcommittee’s 2007 oversight agenda includes "hospital purchasing of medical products" but the topic is placed ninth on a list of 12. Topping the list is the subcommittee’s scrutiny of antitrust enforcement agencies (the 2008 race for the White House is in full swing, don’t you know), followed by the pharmaceutical industry (campaign contributions, anyone?), energy, airlines, railroad, telecommunications, cable and satellite media…you get the idea.

4. Kohl’s committee is patting itself on the back for the GPO industry’s self-reforming efforts (while criticizing it at the same time): "The Subcommittee’s hearings and investigatory and oversight efforts into this issue over the past several years have resulted in the nation’s leading GPOs agreeing to voluntary reforms to their business practices, including the creation of a new self-regulatory organization, the Healthcare Group Purchasing Industry Initiative. The Subcommittee will continue its examination of whether the Initiative is adequate to assure the industry’s voluntary reforms are permanent and enforceable, or whether legislation is necessary to assure this result." If you compare this rhetoric to the language used to describe items higher up on the agenda you’ll notice how anemic it really is.

The bottom line: Don’t expect any legislative changes to muscle GPOs around this year – or next, for that matter. Healthcare may be a never-ending talking point during presidential power plays, and it may be more prominent and heated during the 2008 campaign, but the focus won’t be on group purchasing, which remains an afterthought to the much-larger issues that attract attention. And no one yet has been able to convincingly and successfully link GPO activities to the high costs of drugs, the high number of uninsured and the burgeoning profitability of insurance and managed care companies.

HRDI, HAR HAR. The privately owned think tank Healthcare Research & Development Institute (HRDI) agreed to shutter its doors in the wake of several mounting antitrust investigations. HRDI brought together top hospital executives with vendors to discuss and solve lingering industry problems but the only publicity it managed to achieve through all that brainpower and influence was suspicion of allegedly deceptive and fraudulent business practices. Apparently, participating hospital CEOs were believed to have allegedly steered contractual business to participating vendors. While some investigations may have uncovered no wrongdoing, HRDI wisely closed their doors before authorities could pull back the curtain all the way. There’s no telling what they would have found – if anything – anyway. One prominent healthcare industry consultant astutely put it this way: "It doesn’t matter if you’re right or wrong. It doesn’t matter," he said. "It’s perception that gets you into trouble. It’s perception that gets you the subpoena." What’s troubling is that these folks were operating this way amidst similar investigations of GPOs. Maybe they thought the feds would be too busy with the big guys to bother with them. Some think tank. Guess they weren’t thinking about the ramifications of their actions so they wound up tanking.