Key Takeaways
Cost pressure isn’t letting up in 2026. Inflation, vendor consolidation, and rising purchased services spend are forcing hospitals to look beyond surface-level savings. While most organizations already participate in GPOs, access alone no longer guarantees results. The hospitals seeing real impact are using GPOs differently. They focus on high-spend purchased services, benchmark pricing against peers, standardize contracts, reduce sourcing complexity, and actively monitor compliance so savings don’t disappear after contracts are signed. When GPO participation is supported by clear spend visibility and ongoing governance, purchased services become one of the most controllable areas of hospital spend. That’s where sustainable savings come from; not one-time negotiations, but better decisions backed by data.
Top GPO Cost-Saving Strategies for Hospitals in 2026
Hospitals are entering 2026 under sustained financial pressure. Inflation remains elevated, vendor consolidation is increasing prices, and purchased services continue to grow as a share of non-labor spend. For hospital leaders, cost control is no longer a short-term exercise. It is a long-term operational requirement.
Group Purchasing Organizations (GPOs) remain one of the most powerful tools hospitals have to manage costs. Yet nearly all U.S. hospitals already use GPO contracts. That means access alone is no longer the differentiator.
In 2026, real savings come from how hospitals use GPOs, supported by spend visibility, benchmarking, and ongoing governance. This article explains the top GPO cost-saving strategies hospitals should focus on in 2026 and how a purchased services–first approach turns GPO participation into sustainable financial results.
Why Hospital Cost Pressure Is Structural in 2026
Healthcare cost increases are no longer episodic. They are embedded in how care is delivered and supported.
National healthcare research shows cost trends continuing near 9% heading into 2026. At the same time, hospitals are relying more heavily on third-party service providers for facilities, IT, clinical support, environmental services, and administrative functions. These purchased services now represent one of the largest controllable non-labor cost categories.
Group Purchasing Organizations are widely adopted. Industry research indicates that more than 95% of U.S. hospitals use GPO contracts. Yet many organizations still experience:
- Wide price variation across facilities
- Fragmented contracts for similar services
- Limited insight into whether pricing is competitive
- Savings that fade after contracts are signed
This disconnect exists because GPO participation without visibility and governance does not guarantee outcomes.
What GPOs Are Designed to Solve and Where Gaps Remain
At their core, GPOs aggregate purchasing volume across hospitals to negotiate pricing, terms, and service standards with vendors. This reduces transaction costs and improves negotiating leverage.
Modern GPOs provide value through:
- Aggregated buying power
- Pre-negotiated contracts
- Reduced sourcing effort
- Administrative efficiency
However, GPOs do not manage a hospital’s internal spend behavior. They do not automatically enforce compliance, surface pricing outliers, or prioritize where leverage matters most. That is why hospitals with the same GPO can see very different results.
The Real Cost Problem: Purchased Services Without Visibility
Purchased services costs fluctuate for predictable reasons. Understanding these drivers is essential before discussing solutions.
Why Purchased Services Costs Rise
| Cost Driver | What Happens Inside Hospitals | Why It Drives Overspend |
| Vendor consolidation | Fewer service providers control pricing | Hospitals lose negotiating leverage |
| Contract fragmentation | Similar services contracted separately | Wide price variation across facilities |
| Inflation escalators | Annual increases compound over time | Costs rise faster than budgets |
| Limited spend visibility | Leaders lack line-item insight | Overpayment goes unnoticed |
| Weak compliance | Off-contract vendors continue | Negotiated savings erode |
In 2026, controlling purchased services spend requires moving from reactive negotiations to structured cost architecture.
From Cost-Cutting to Cost Architecture
Historically, hospitals focused on isolated savings events. A contract was renegotiated. A vendor was replaced. Savings appeared, then slowly disappeared.
In 2026, leading hospitals are shifting to cost architecture, a system where:
- Spend is fully visible and categorized
- Opportunities are prioritized using benchmarks
- GPO leverage is applied intentionally
- Compliance is monitored continuously
GPOs are foundational to this system, but they work best when paired with analytics and governance.
Top GPO Cost-Saving Strategies for Hospitals in 2026
The strategies below reflect how high-performing health systems are using GPOs today to drive measurable, lasting savings.
Expanding Category Management Beyond Supplies
Hospitals are broadening GPO strategies beyond medical and surgical supplies into purchased services such as IT, food service, facilities management, environmental services, security, and HR outsourcing. These categories are often managed independently across departments, which limits visibility and weakens negotiating leverage.
By categorizing purchased services spend holistically, hospitals can consolidate fragmented contracts, reduce vendor overlap, and apply GPO leverage to areas that were previously unmanaged.
Impact:
Unlocks savings in overlooked areas that often account for 20–30% of hospital budgets.
Where GPO Savings Focused and Where They’re Shifting in 2026
| Area | Traditional GPO Focus | 2026 GPO Opportunity |
| Primary categories | Medical & surgical supplies | Purchased services |
| Spend ownership | Centralized | Fragmented across departments |
| Visibility | High | Historically low |
| Savings potential | Incremental | Structural |
| Budget impact | Smaller share | ~20–30% of operating budgets |
Leveraging Data-Driven Contract Optimization
Many hospitals still review contracts on a fixed cycle and assume the pricing holds up in between. In reality, rates drift, usage changes, and savings quietly slip away long before renewal.
Teams are now using data to keep a closer eye on how contracts perform day to day. Pricing is checked against peer hospitals. Off-contract spend is flagged early. Renegotiations happen when the numbers call for it, not just when a contract expires.
GPOs are supporting this shift by making pricing comparisons easier to see. Instead of relying on assumptions or vendor explanations, hospitals can point to real data and have more direct, informed conversations about cost.
Impact:
Ensures hospitals capture negotiated savings and avoid hidden costs.
Why Benchmarking Changes Outcomes
| Without Benchmarking | With Benchmarking |
| Vendor price increases accepted | Pricing validated against peers |
| Sourcing done reactively | Categories prioritized by impact |
| Limited negotiating leverage | Data-backed negotiations |
| Hidden overpayment | Clear outlier identification |
As service providers continue to raise prices in response to labor and inflation pressures, benchmarking becomes essential for informed decision-making.
Building Supplier Diversification & Risk Mitigation
Many hospitals ran into trouble when a single vendor could not deliver. Staffing fell short. Service levels dropped. Prices went up with little warning. When that happened, there were often no alternatives ready.
To avoid being stuck again, hospitals are keeping more than one approved vendor for important purchased services. GPOs make this easier by lining up multiple options under the same category.
This gives teams room to move. If a provider misses expectations or pushes a sharp increase, work can shift without restarting the entire sourcing process. It also keeps pricing conversations more balanced, since vendors know they are not the only option.
Impact:
Helps avoid service gaps and sudden cost increases while keeping negotiation leverage in place.
Aligning Contracts with Value-Based Care
Price alone no longer tells the full story. A service can be inexpensive and still create problems if it slows operations or affects care quality.
Hospitals are reviewing GPO contracts with a wider lens. They are asking whether a service actually supports how care is delivered day to day. That includes reliability, turnaround time, and how much follow-up work it creates for staff.
As payment models change, procurement decisions are being made with more input from clinical and operational teams. The goal is to control costs without creating downstream issues that show up elsewhere in the system.
Impact:
Supports reimbursement models that focus on quality and performance, not just volume.
Digital Transformation of Purchased Services
The biggest shift in 2026 is the digitalization of purchased services management. Hospitals are moving away from spreadsheets and manual tracking toward platforms that automate spend analysis, vendor management, and compliance tracking.
GPOs are often the access point to these tools, enabling hospitals to scale governance and maintain visibility across large, multi-facility systems.
Impact:
Streamlines procurement processes and reduces administrative overhead.
Valify: The Solution for 2026
GPOs set the foundation, but hospitals still need a way to manage purchased services day to day. That is where Valify fits.
Valify, the leading healthcare cost management platform, empowers hospitals to bring purchased services into a single, organized view. Instead of pulling information from multiple systems or relying on manual reports, teams can see where spend sits, how it compares to peers, and where action is needed.
With Valify, hospitals can:
- Benchmark purchased services spend to understand what is competitive and what is not
- Spot savings opportunities based on actual usage and pricing patterns
- Track vendor compliance so negotiated terms do not slowly fall apart
- Work more effectively with GPO partners using shared data and clearer priorities
Hospitals that put these pieces together are better equipped to handle ongoing cost pressure without sacrificing care delivery. In 2026, cost savings come from making better, data-informed decisions that hold up over time.
Turning GPO Participation Into Measurable Savings
By 2026, most hospitals already know this: signing a GPO contract doesn’t automatically lower costs. Margins are tighter. Vendor prices keep creeping up. And the old approach of “set it and forget it” just doesn’t hold anymore.
What we see in practice is simple. The hospitals that actually protect their savings are the ones that stay close to their data. They know where their purchased services dollars go. They check pricing against peers. They reduce contract sprawl. And they keep an eye on compliance so negotiated rates don’t quietly slip away.
When purchased services are managed as a single, coordinated program instead of a collection of disconnected contracts, cost reduction stops being a one-time event. It becomes repeatable.
If you’re looking to move past short-term wins and build a purchased services strategy that holds up over time, visibility is the starting point.
Schedule a demo with Valify to see exactly where your purchased services sit today and how to turn GPO participation into savings you can actually measure and maintain.
Frequently Asked Questions:
What are the purchased services in healthcare?
Purchased services include non-labor services such as facilities management, IT support, environmental services, clinical outsourcing, and administrative services.
How much can hospitals save using GPO strategies?
Research shows hospitals can save 10–18% on supply and service costs when GPO contracts are used strategically and supported by compliance.
Why do hospitals still overspend even with GPOs?
Overspending often results from limited spend visibility, fragmented contracts, and a lack of monitoring after agreements are signed.
How does benchmarking improve GPO negotiations?
Benchmarking provides peer-based pricing data that strengthens negotiating leverage and helps hospitals identify pricing outliers.
How does Valify support GPO cost-saving efforts?
Valify provides spend analytics, benchmarking, sourcing support, and compliance tracking that help hospitals turn GPO participation into lasting financial results.
Shara Smith serves as the Marketing Director for both Valify and Valify Solutions Group, where she oversees all facets of marketing, including strategic planning, branding, digital marketing, and event management. She joined Valify in September 2021, bringing with her a wealth of experience in healthcare marketing and business development.
