January 10, 2024- As health systems face increasing financial pressure with inflation following the COVID-19 pandemic, rising operational costs, continued labor shortages, supply chain disruptions and stock market fluctuations have combined to undermine financial stability. Many health systems are struggling to offset shrinking margins.
Purchased services from health information management and education to information systems, environmental services and maintenance support can help these costs if they are managed correctly. But they are often decentralized, managed at the department level and lack central oversight. This causes them to be difficult to track and time-consuming to improve.
The AHA’s 2023 Cost of Caring report shows an 18% increase in purchased services between 2019 and 2022 as hospitals have been forced to incur additional costs as they renew and renegotiate their purchased services contracts. These are often locally negotiated vendors, contracts and invoices that pass through purchasing and accounting with little to no careful review.