Health system supply chain executives across the country are finding savings through strategic sourcing overhauls, vendor consolidation, purchased services discipline and data-driven utilization management — with several reporting seven-figure results.
For many systems, the biggest gains came from reducing the number of vendors altogether. At New York City-based Montefiore Health System, Chief Procurement Officer Joe Wilson said the health system collapsed eight vendor relationships for environmental services across more than 250 ambulatory and administrative offsites down to a single partner following an extensive request-for-proposal process delivering more than $1.75 million in annual savings along with improved service quality.
Baptist Health took a similar approach, this time through a group purchasing organization. The system joined Premier’s Surpass program in October 2025 and hasn’t looked back. “We have achieved almost $2 million more in savings than we projected initially,” said Cindy Gueltzow, vice president of supply chain services at Louisville, Ky.-based Baptist Health. The results were driven largely by standardization, including a deliberate partnership with the cardiovascular service line to balance new technology adoption with cost offsets on legacy products.
“Our physicians appreciate the ability to access the advanced technology and are more than willing to assist us in finding ways to offset the increased costs that new tech brings,” Ms. Gueltzow said.
The consolidation push reflects a broader shift in how supply chain leaders are thinking about their operating models. At Ventura, Calif.-based Community Memorial Healthcare, Director of Materials Management Michael Alfaro described a multi-year transformation that restructured medical device and physician preference item contracting while optimizing the system’s medical/surgical distribution network, shifting the organization from a reactive posture to a more controlled, system-wide sourcing model.
Not every savings strategy is straightforward. At New York City-based Mount Sinai Health System, Carlos Maceda, chief supply chain officer, pointed to vendor commitments and rebate structures as a growing savings lever — one that supply chain teams don’t always prefer but can’t afford to ignore.
“Although not a preferred way for supply chain, many times rebate-based arrangements are the way to get the largest savings,” Mr. Maceda said.
Sometimes the savings are hiding in plain sight. CommonSpirit Health’s Texas Division has focused on converting rental and lease agreements to capital purchases, building a “never rental” list for items like feeding pumps, fall mats and walkers to prevent recurring costs from accumulating.
“We continue to buy them one-time and do not pay 10 times [as much] for rentals that sit here and get lost over the years,” said Division Vice President Noah Hechimovich. The strategy generates at least $1 million in annual savings across the division’s 35 hospitals. CommonSpirit Health is headquartered in Chicago.
Purchased services — historically managed outside of procurement at many organizations — have emerged as perhaps the largest untapped opportunity. Madison, Wis.-based UW Health System Vice President of Supply Chain Brad Ouellet said his team used enterprise-resource planning data alongside benchmarking tools from Vizient and Valify to produce detailed purchased services expense reports for senior leaders. The initiative exceeded its $10 million improvement target.
Beyond the numbers, Mr. Ouellet said the greater achievement was cultural. “We have created a new expectation for leaders to work with procurement in more actively and collaboratively managing this large expense category,” he said.
Technology is accelerating the search for savings at some systems. Tacoma, Wash.-based MultiCare Health System Chief Supply Chain Officer Jason Moulding described a procedural dashboard that integrates endoscopic mucosal resection procedure data with supply utilization and cost information from the ERP, overlaid with reimbursement and quality metrics. The tool has enabled value-based savings of several million dollars by identifying opportunities across pricing, standardization, and utilization simultaneously.
At New York City-based Memorial Sloan Kettering Cancer Center, the focus was more traditional — but no less effective. The system went to market on both its med/surg distributor and linen provider contracts, reducing overall spend by roughly 11% over the next three to five years. Vice President Aaron Tappan also noted the integration of lab and pathology supply management into the supply chain function, which reduced inventory and eliminated costs associated with clinical staff performing supply chain work.
At San Angelo, Texas-based Shannon Health, that same lab focus is still in progress. Administrative Director of Supply Chain Luke Martin said the organization is moving away from reagent rental agreements toward outright equipment ownership — a shift aimed at maximizing long-term value through better testing utilization.
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