What the evidence says about group purchasing

Short answer

In the sector studied most, healthcare in the United States, published work reports savings in the low to mid teens of percent. The same literature shows that how the organiser is paid matters.

The headline number

An analysis by the consulting firm Dobson DaVanzo and Associates found that hospitals and nursing homes using a group purchasing organisation paid 13.1% less for supplies than those that did not [1]. It was commissioned by the industry association that represents those organisations, so read it with that in mind.

The critique

A study funded by an association of medical device manufacturers reached the opposite conclusion for one category. It reported that hospitals buying devices themselves paid 10% to 14% less than through a purchasing organisation, and pointed to organisers being paid by suppliers as a conflict of interest [2]. This study, too, was paid for by an interested party.

What we take from both

• Pooling works best for standard items bought in volume, and less well for specialised ones.
• Members should know exactly how the organiser earns its money.
• A saving should be measured against what the member actually paid before, not against a list price.

What is missing

Almost all published evidence comes from healthcare, and from outside the region. We have not found a published study of group purchasing for small businesses in Saudi Arabia. Jmaa will publish its own pilot results here, with the method used, once they exist.