Good evening everyone it's Dr shivaya Duray I'm going to share with you why There are medicine shortages in U.S Hospitals so these hospitals need Supplies and this supplies could include Things like insulin Cancer drugs bags of Saline all the way down to you know Things like catheters everything you see In a hospital has to be bought there's Various companies who have these Supplies let's take Hospital one and Maybe they need a hundred insulin bags And they'll negotiate a price of ten Dollars per bag of insulin another Hospital would also go to the supplier And they negotiate a price of two Dollars a bag maybe they're going to buy 200 units and then another hospital will Go to the same insulin company maybe They're going to buy 10 000 units and Maybe they negotiate a price of five Dollars a bag each of these hospitals Have negotiated individual prices with These insulin companies so what ended up Happening these hospitals said why don't We get together and buy in this case Insulin bags directly from the supplier Together so in order to do that they Brought in a broker and the broker was Called a GP El group purchasing Organization when they say hey look we Need a hundred bags Hospital One Hospital two said we need 200 bags and Hospital three said you need 300 bags so
The total the GPO was going to purchase 500 bags of insulin and in return the Insulin price was set at let's say eight Dollars a bag so they pulled their needs To this supplier so bottom line the GPO Served as their middle man and he did This across the board for was cancer Drugs saline or catheters this GPO Became the single agent getting whatever Supplies the hospitals needed from Suppliers the GPO would sign agreements With these people long-term agreement Short-term agreements and these were Contracts right so these contracts were Signed and the GPO actually owned the Relationships over time with these People initially they were servicing the Hospitals here they were helping the Hospitals get a lower rate over time the Gpos controlling the supply of nearly Every item bed pans pillowcases sheets Drugs ventilators everything you can Imagine is coming from these suppliers Into the hospitals in fact the GPO could Do preferential deals maybe the guy was Going to take him on a vacation right All sorts of back room deals started Occurring these gpos sort of flipped the Game and what ended up happening was the Gpos started dictating price and Supply Because they controlled all of these Relationships so the gpos would tell the Hospitals what to do in fact at every Hospital is a person who's running the
Hospital the GPO would give Kickbacks For accepting the price that they were Saying special hotels Vacations so Literally the GPO was buying the Hospital administrators so they would Accept the price that they were giving The GPO could control Supply and if you Remember basic macroeconomics Keyhole Control Supply controls price now how Does this fit into the high cost of Health Care today there are only three Major gpos the three major insurance Companies bought the three gpos what is The interconnection between a GPO and an Insurance company you pay the insurance Company some dollar per month this is Called your premium I'm paying like 800 Bucks a month let's say that's what it Is in 2023. in 2024 they may want to Raise this to 900 bucks a month how are They able to justify that insurance Companies scare you into justifying Their higher premium by telling you the Price could be very high tomorrow God Forbid get into a hospital oh my God you Know the price of the Cancer drugs the Price of the insulin the price of the Sailing these things are going up if you Don't have insurance you're going to Have to pay for this out of pocket and You go oh my God I'm willing to pay you 900 bucks a month next year in order to Do this insurance companies three of the Major insurance companies now bought
Three of the major gpos they can go to The gpos and there's a nudge nudge wink Wink their own companies the gpos now Are incentivized to keep the price High Because that's how they make more profit If they go to a hospital administrator And say hey look the price is now 90 Bucks apply is going to be really tight So the hospital administrator pays the GPO more money so the gain between the Gpos and the hospital administrators Keeps the price High the high price of All of these supplies is what the Insurance companies use to make you say Oh my God I'm willing to pay higher for The premium God forbid I go to a Hospital the price is going to be so High and how do you get price High well You need shortages more shortages you Get more increase in price that's basic Macroeconomics the main thing you should Leave away with is group purchasing Organizations are controlling the supply Of everything from suppliers into Hospitals there's an incentive here for Them to create shortages and with those Shortages they can decide which Suppliers they want to work with because On the back end these suppliers are Doing back and deals with gpos and by The way no one can get access to these Contracts that they have a couple of Days ago the FDA allowed unapproved Cancer drugs coming from China so China
Is also over here to supply Cancer drugs Through gpos to a hospital who created The shortage of U.S Cancer drugs so Their U.S manufacturers here they're not Able to for some reason give enough Cancer drugs and so the gpos went to Chinese companies and they got the FDA To bring that in because of this urgency Oh my God we don't have enough Cancer Drugs so the level of corruption that's Going on the back end and the opacity of It which means there's very little Transparency is what's allowing all These Shenanigans to take place but Anyway tomorrow we'll finish our series On why are there medicine shortages in The United States by looking at how we Break this up and that'll give you Details on my policy for health care for Really reducing cost to increase quality Thank you everyone I hope this helped Thank you
