Healthcare organizations are entering a new phase of financial pressure defined less by inflation and more by structural inefficiencies embedded in indirect spend.
Across many health systems, purchasing has become fragmented and decentralized. Departments rely on online retailers, local vendors and legacy procurement channels to acquire non-clinical supplies. Over time, this has created SKU proliferation, inconsistent pricing, limited visibility and minimal enterprise control.
What is now emerging is a clear shift. Health systems are moving away from decentralized purchasing toward procurement governance models designed to restore control, standardization, and system-wide accountability.
These are the strategies they're implementing to fix fragmented spend:
1. Establish governance over decentralized purchasing.
While indirect spend is often framed as a cost issue, healthcare leaders increasingly see a deeper problem: lack of governance.
When purchasing is distributed across facilities and service lines without consistent standards, organizations face predictable outcomes:
- Redundant SKUs across categories
- Price variability for identical items
- Vendor duplication and expansion
- Limited enterprise spend visibility
- Difficulty enforcing purchasing policies
The result is not just inefficiency; it’s loss of control over spend behavior.
As John Geurin, SVP, Vertical Markets for Healthcare at Staples Business, explains: “We’ve been partnering with health systems to move from fragmented purchasing to governed, standardized procurement that improves visibility, consistency and control across the enterprise.”
Indirect spend is increasingly viewed as a lever for operational discipline.
2. Standardize procurement policies and assortments.
Health systems are restructuring how indirect procurement is managed.
Instead of decentralized purchasing, organizations are implementing governance frameworks that define:
- Approved products across the system
- Standard purchasing rules and enforcement
- Vendor consolidation strategies
- Consistent data capture and reporting
Procurement is shifting from a transactional function to a managed enterprise system where consistency and control sit alongside cost efficiency.
Geurin notes, “Health systems that succeed focus on control and consistency, while simplifying execution rather than overcomplicating it.”
Supplier expectations are also evolving toward supporting enterprise-wide standardization rather than category-level fulfillment.
3. Treat indirect spend as a strategic lever.
Indirect categories such as facilities supplies, breakroom products, office essentials, furniture and environmental services inputs are increasingly recognized as drivers of operational performance.
Fragmentation in these categories creates inefficiencies that affect staffing workflows, budget predictability and execution.
Organizations addressing this are reporting:
- Reduced SKU proliferation
- Improved price consistency
- Vendor consolidation
- Greater spend visibility
These changes improve both financial control and operational clarity.
4. Prioritize reliability and fulfillment consistency.
Reliability has become a critical procurement priority.
Inconsistent fulfillment and fragmented supply sources create strain across environmental services, facilities and administrative teams. When supplies are delayed, frontline staff absorb the impact.
Standardization improves:
- Product availability
- Ordering consistency
- Fulfillment alignment across locations
Reliability is now viewed alongside cost as a core requirement in large multi-site systems.
5. Build data readiness before layering in AI.
As healthcare organizations adopt artificial intelligence in procurement, a foundational issue is emerging: AI is only as strong as the underlying data.
Fragmented purchasing has created inconsistent SKU structures, siloed vendor records and limited spend visibility. Without fixing this, analytics tools cannot deliver meaningful insights.
Research from the 2026 State of Healthcare Procurement, developed with The Advisory Board, reinforces that governance and data standardization are prerequisites for effective AI adoption.
Leading organizations are prioritizing:
- Standardized procurement catalogs
- Enterprise purchasing policies
- Normalized SKU and vendor data
- Centralized workflows
Only then can AI meaningfully improve procurement performance.
Ready to reduce fragmentation and strengthen procurement governance? Learn more at StaplesBusiness.com/healthcaresupplychain.