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SUMMARY:The Impact of Custom Contracting and the Intermediary Roles of Heal
 thcare GPOs 
DESCRIPTION: \n\nAbstract: U.S. hospitals join GPOs for procurement cost sa
 vings. It is\ngenerally believed that GPOs lower costs through demand aggr
 egation.\nUntil recently hospitals purchasing supplies from a GPO vendor h
 ad to\npay a GPO-negotiated price. The novel practice of custom contractin
 g\nallows GPO member hospital to negotiate with GPO vendors to improve on\
 nthe GPO negotiated prices. Hospital procurement departments have\nwelcome
 d this practice\, lauding the opportunity to further lower\nhospital costs
 . In this paper\, we use economic modeling to investigate\nthe practice of
  custom contracting. We develop a game-theoretic model\ntreating as endoge
 nous the pricing and negotiations decisions of the\nGPO vendor and of memb
 er hospitals. We show why – counter to the\nhospital industry’s expect
 ations – expected purchase prices will\nnot decrease with the introducti
 on of custom contracting. The practice\nbenefits GPO vendors at the expens
 e of the member hospitals.\n\nBio: Vera Tilson is an Associate Professor o
 f Operations Management at\nthe Simon School of Business\, University of R
 ochester. Her research\ninterests are in health care operations\, supply c
 hain management\, and\nstochastic scheduling. Her teaching interests are i
 n quantitative\nbusiness modeling and in operations management. She has re
 ceived a\nsuperior MBA teaching award\, and multiple teaching honor roll\n
 recognitions. She has industrial experience as a software engineer and\npr
 oject manager in telecommunications\, medical instrumentation\, supply\nch
 ain software and financial industries. Her research has been\npublished in
  Management Science\, Operations Research\, MSOM\, Production\nand Operati
 ons Management Journal\, Decision Support Systems\, European\nJournal of O
 perations Research\, International Journal of Production\nEconomics\, and 
 other scientific and industry publications.\n 
DTSTART:20151026T143000Z
DTEND:20151026T153000Z
LOCATION:Gerri C. LeBow Hall\, 3220 Market Street\, 722\, Philadelphia\, PA
  19104
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