Medical Purchasing Agents (MPC) is a company that represents groups of hospitals as their agents for purchasing medical supplies. MPC is able to obtain discounts for the hospital group because of their sheer volume needs when they are grouped together. MPC's CEO, CFO and general counsel own 51% of the stock of a company called Medi-Pump. Medi-Pump is the sole supplier to the hospitals for feeding pumps, IV pumps and other forms of hi-tech medical pumps and supplies. MPC has negotiated a low-cost supply contract from Medi-Pump to the hospitals. MPC:
A) Has served its customers well with the Medi-Pump contract.
B) Has a conflict because of its ownership of Medi-Pump.
C) Cannot have a conflict so long as the Medi-Pump price is lowest.
D) Cannot have a conflict because it represents groups of hospitals.
E) None of the above

Question

Quizplus · Accepted Answer

MPC has a conflict of interest because its CEO, CFO, and general counsel own 51% of Medi-Pump, the sole supplier to the hospitals for hi-tech medical pumps and supplies. This ownership could influence MPC's negotiations and decision-making processes, potentially resulting in higher profits for Medi-Pump at the expense of the hospital group. Even if the Medi-Pump contract currently provides low-cost supplies, the conflict remains a concern.

Medical Purchasing Agents (MPC) Is a Company That Represents Groups