Unlike with tracking expenses for products and capital within a health system, purchased services are difficult to quantify. Purchased services have no item number, are primarily fulfilled by local vendors, and are purchased off-PO 75-85% of the time. These factors make purchased services a complex area in which to manage budgets, to track expenses, and to implement compliance without the proper tools and best practices.
If purchased services expenses are not monitored regularly, there is no guarantee health systems will see the savings that were planned for following a rigorous vendor negotiation. This can be defeating for those who spent the time and energy finding a better deal and can ultimately be bad for business when expected savings are missing on the bottom line at year end.
Continual monitoring is the only way to ensure actual spend aligns with savings expectations. Purchased services expense tracking and monitoring is an ongoing process with plenty of pitfalls and common missteps. However, purchased services professionals can make the monitoring process more manageable and productive by knowing the pitfalls to look out for and by following the industry best practices (see blog: Monitoring Purchased Services Expenses. Part 2: Best Practices and How to Get Started). Continue reading
The Valify Editorial Team is dedicated to sharing insights, strategies, and innovations that help healthcare organizations gain control of purchased services spend. Backed by years of expertise in data analytics, procurement, and healthcare technology, the team curates practical resources and thought leadership to guide hospitals and health systems toward greater efficiency and savings. By combining industry knowledge with real-world case studies, the Valify Editorial Team delivers content that empowers decision-makers to drive smarter, data-driven sourcing strategies.
