July 21

Who’s in Charge of Your Hospital’s Purchased Service Contracts?


I would like you to look around your hospital and ask yourself who is in charge of your hospital’s purchased services. I can assure you, if you are honest with yourself, that the answer is nobody.

The reason for this circumstance is that this function, at most hospitals, has been outsourced to your department heads and managers with disastrous results. We have seen department heads sign multi-year purchased service contracts that have cost their hospitals hundreds of thousands of dollars a year just due to benign neglect. Other department heads have missed deadlines on contract renewals that roll over for another five years without any renegotiations. Or, there have been instances when they have committed their hospital to a contract that had no cancellation clause.

Managing Your Hospital’s Purchased Services

To stop this train wreck, it is now time for hospital supply chain professionals (as other industries have been doing for years) to step up to the challenge of administering these contracts from start to finish, since there is no other department in your hospital that is more qualified to do so. You have the training, discipline, ethics, and know-how to rein in your hospital’s multi-million dollar portfolio of purchased service contracts.

I know you don’t have the time or staff to do so now, but that doesn’t mean that you should continue to let these millions of dollars in contracts be outsourced with dire consequences to your department heads and managers. It’s time for you to develop a proposal to your senior management to take over this function that can save your hospital 11% to 18% right out of the gate.

I call this building a case for change by showing your C-suite how much they can save on their purchased service contract portfolio by having your supply chain department professionally manage and control these contracts. Why let this madness continue any longer?

Articles you may like:

4 Powerful Supply Chain Expense Savings Trends You Should Not Ignore

9 Things to Negotiate with Your Purchased Service Contracts Other Than Price

5 Key Requirements You Must Have In All Of Your Purchased Service Contracts

5 Key Requirements You Must Have In All Of Your Purchased Service Contracts

Request Demo of SVAH’s Value Analysis and Utilization Tools


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