By Michelle Gustafson, Director of Spend Optimization at SpendMend
Recently, I had the pleasure of speaking on a webinar with Mark Anway, Vice President of Supply Chain at OU Health. Mark and I have worked together over the years, and I’ve always appreciated his thoughtful, pragmatic approach to healthcare supply chain leadership.
In our discussion, we explored a topic that continues to gain urgency across health systems: what happens beyond traditional indirect spend efforts. We talked about governance models, visibility challenges, stakeholder engagement, and how to balance cost, quality, and outcomes in clinically influenced and patient-adjacent services.
As I reflect on our conversation, three key insights stand out, insights that I believe every healthcare leader navigating complex service spend should consider.
- Indirect Spend Isn’t Cookie Cutter and That’s Exactly Why It’s So Challenging
One of Mark’s key points was that indirect spend does not behave like traditional supply categories.
On the direct side, we rely on price indexes, benchmarks, physician preferences, and potential market share commitments. In the indirect categories such as facilities, waste, recruiting, legal, or equipment maintenance, the metrics are far less straightforward. Costs may be driven by labor, square footage, adjusted patient days, or regional service availability, etc.
Breakdowns often occur when teams move too quickly without fully defining scopes. Mid-project changes, missed service-leader inclusion, and long-standing auto-renewed contracts can quietly erode value, among other things.
These categories are not neglected intentionally. They are complex, relational, and often sit outside traditional Supply Chain ownership, which is why they require deeper stakeholder alignment and strategic oversight. Indirect spend is not transactional work, it is strategic.
- Governance Is Less About Control and More About Alignment
Mark and I agree that effective governance balances clinical autonomy with financial accountability, but it begins with stakeholder alignment.
Governance should not be viewed as a cost-cutting committee. The best models clarify intent and scope upfront; define what value means for the category; and ensure the right stakeholders are included and engaged; including those who may not be aligned with the strategy, etc. as it ensures all perspectives are considered.
Executive advocacy matters. When leadership understands that governance is about improving reliability, service, and outcomes, not just reducing cost – it shifts the conversation.
Most importantly, success must be defined at the beginning. If a project prioritizes quality or performance over immediate savings, that expectation should be clear before the work begins.
- The Hidden Costs of Unmanaged Services Add Up Fast
A major theme of our discussion was the hidden risk within loosely governed service categories.
Scope creep becomes normalized. New suppliers are added without visibility, surcharges and fees go unmonitored and labor-heavy contracts quietly expand. Over time, these incremental changes compound.
Because service invoices often lack line-item detail, it can be difficult to see where costs are increasing. Freight, late fees, surcharges and escalators, and added services may go unnoticed.
At SpendMend, we not only uncover value at the contract negotiation stage, but post execution through invoice review, rebate validation, and contract alignment review.
The impact is not only financial. Poor oversight can affect reliability, quality, staffing requirements, and operations. The risk is operational as much as it is financial.
Why This Work Matters More Than Ever
As Mark and I concluded our discussion, we focused on what lies ahead. Healthcare margins remain thin, reimbursement uncertainty continues, and labor costs are still volatile. While many systems have optimized most of their direct supply strategies, indirect and purchased services remain a significant opportunity and a potential area of risk.
Without a more strategic approach, unmanaged service costs can quietly escalate, inefficiencies can compound, and standardization opportunities can be missed, and the opportunity is just as real. Indirect spend transformation is not only about cost containment, but also about stronger governance, smarter partnerships, better visibility, and improved operational performance.
The most complex categories often hold the greatest opportunity. With the right alignment and oversight, indirect and patient-adjacent services can drive meaningful financial, operational, and clinical impact.
Beyond indirect spend is where traditional savings efforts stop and real opportunity begins.