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Overview of GPOs. Negotiate contracts with vendors (e.g., manufacturers) on behalf of members (e.g., hospitals)Expected to use volume purchase to negotiate lower pricesVendors pay GPOs administrative fees based on salesFees finance operationsSurplus fees distributed to owners or used to finance new venturesGPOs vary by size, scope of service, and ownership type.
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6. Money Flows Related to Hospital Purchases Using a GPO