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June 1, 2022

Healthcare Purchased Services: Reducing Costs and Improving Quality

Despite making up nearly 36 percent of a typical U.S. hospital’s operating expenses, purchased services can often be overlooked by hospital administrators when seeking to reduce costs.

However, this is an area that contains ample cost savings opportunity for hospitals and healthcare systems. It’s also an opportunity to improve quality — something that often isn’t correlated with the cheapest price.

The key to reducing costs and improving quality through purchased services is to look beyond cost and convenience. Instead, hospitals should look to find a vendor that can align with their values and operate as a partnership rather than a transaction.

But first, let’s define our terms.

What are healthcare purchased services?

Purchased services are any and all outsourced or contracted services in a hospital or health system. These services can range across all departments at a facility. 

Not only can your housekeeping services be outsourced or purchased, but so can clinical support services, financial services, transportation, and more. It all depends on the needs of a hospital.

If agreements are executed strategically, purchased services can promote meaningful savings and lead facilities to greater operational success.

Thinking smarter about purchased services

Purchased services aren’t simply an area to cut costs and reduce spending. It should be leveraged as a way to find vendors that align with your values, provide financial and operational transparency, and collaborate with you to find the best solution in regard to both cost and quality.


To improve their purchasing plans, hospitals and health systems must first reflect on their pain points and be transparent about their needs from a purchased services provider. That way, both parties have a clear understanding of expectations from the start.

The right partner should provide hospitals with visibility and, if possible, real-time analytics to give facilities insight into what is working for them and shine light on areas for improvement.


Not only is collaborating with the right partner vital to the success of purchased services, but it’s also just as important for different decision makers within a facility to collaborate. 

For example, a director may be an expert when it comes to their specific department, but may not understand supply chain or the financial aspects of a potential partnership. This is when it’s important to collaborate with other subject matter experts within a facility to make the best, most informed decisions.

Through this, facilities can ensure they’re partnering with a vendor who’s working to not just provide a service, but the service a hospital truly needs.


The idea of “don’t fix what’s not broken” is common when it comes to facilities and purchased services, and in some cases that may work. However, facilities should always consider all of their options when it comes to purchased services. 

The climate is constantly changing, which often affects a facility’s specific needs. When facilities take a passive approach, they risk spending money that could be better allocated or even saved. 

Constantly re-evaluating and opening up the possibility of different options could be the difference to a facility’s bottom line.

Tag(s): Healthcare

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