By Brandon Droz, Vice President of Supply Chain Services, SpendMend
Most healthcare leaders have a strong sense of where their money is going until the conversation turns to purchased services. At that point, confidence often gives way to uncertainty. Leaders know the spend is significant and believe opportunities exist, yet when asked a simple question like – what exactly are we paying for and are we getting what we agreed to – clear answers are often hard to find.
That uncertainty is not a failure of effort or intent. It is the reality of a spend category that has grown faster than how the system was designed to manage it.
Purchased services now represents one of the largest portions of non-labor expense in healthcare, yet it operates with far less structure than clinical supplies or pharmaceuticals. Invoices arrive with limited detail. Decisions are made locally across departments and facilities. Data lives in disconnected systems. Accountability is often unclear. Over time, this creates a visibility gap where dollars continue to flow, but insight does not.
Closing that gap is not about pointing fingers or imposing control. It is about recognizing that purchased services has become too important and too costly to remain unmanaged by default. The organizations making progress are the ones willing to shine a light on what is happening today and take a practical, collaborative approach to improving how this spend is understood and governed.
Why Purchased Services Breaks Traditional Spend Controls
Purchased services challenge the assumptions that traditional procurement controls are built on. Services are variable by nature, often billed after work is completed, and rarely documented with the consistency required for effective oversight. Blanket purchase orders and manual invoice reviews may keep payments moving, but they offer little insight into what was delivered or whether it aligns with contractual terms. Without reliable line-item visibility and connected data, even disciplined organizations find themselves reacting to spend rather than actively managing it, limiting their ability to control risk, utilization, and long-term performance.
Building Control Through Partnership, Not Mandates
Meaningful progress in purchased services begins when organizations shift from control to collaboration. Departments that rely on these services understand their operational needs and vendor relationships best, which makes partnership essential. When supply chain and finance teams engage as advisors by listening first, identifying shared pain points, and supporting departments with data, contracting expertise, and vendor accountability, trust is established. That trust creates access to better information and opens the door to sustainable change, allowing organizations to improve oversight without disrupting operations or diminishing departmental ownership.
What Effective Purchased Services Management Looks Like
A mature purchased services strategy is defined by clarity rather than complexity. Organizations that succeed create visibility into what is being purchased, applying a consistent structure to categorize and analyze spend, and establish clear ownership for performance and governance. Contracts are reviewed against actual billing; vendors are evaluated on outcomes as well as cost; and decisions are guided by insight rather than assumption. This level of maturity is built incrementally, proving value in one area and expanding from there, until purchased services becomes a disciplined and measurable component of overall financial performance.
Time to Act
Purchased services can no longer be treated as a blind spot. With margins under pressure and costs rising, health systems need to make deliberate decisions about where to focus next. That starts with asking better questions. Where do we lack visibility? Which services are consuming the most dollars? And where can better insight change the conversation?
Do not wait for perfect data or a system wide mandate. Choose one category. Engage one department. Commit to understanding what is actually being purchased and how it is being billed. With the right visibility, structure, and partnership in place, organizations can begin turning purchased services into a disciplined, measurable source of value, and that is exactly where SpendMend helps health systems take the next step.