How smart health systems redefine cost in their supply chain

May 21, 2026

By Ross Lieb, MedSpeed Chief Financial Officer

In today’s healthcare supply chain environment, financial sustainability isn’t optional. It is essential. As a result, there is constant pressure to reduce expenses. But there is a critical misconception that continues to derail meaningful savings: the belief that the lowest price automatically equals the lowest cost.

It does not.

Focusing solely on unit price can create a false sense of savings while masking inefficiencies, waste, and downstream expenses that quietly erode financial performance.

What high performing health systems do differently

Forward-thinking organizations are shifting toward a value-based healthcare supply chain approach. Instead of focusing on the lowest cost upfront option, they evaluate solution will deliver the best overall outcome across operations, clinical performance, and long-term financial impact. This reframes cost as a strategic decision rather than a short-term transaction.

High-performing health systems apply this mindset consistently. They look beyond price to assess how products and solutions perform at scale, influence workflows, and affect efficiency over time. By taking a broader, data-informed view, they make more disciplined decisions that reduce total cost and deliver sustainable results.

The real drivers of cost are scalability and utilization

Two key drivers of supply chain efficiency — scalability and utilization — are emerging as critical to financial performance. Services that appear cost-effective upfront can introduce inefficiencies if they require frequent replacement, increase labor demands, or disrupt workflows.

In contrast, a solution with a slightly higher invoice price that integrates seamlessly into clinical workflows, reduces variability, and minimizes rework can actually drive significantly greater savings over time. Value cannot always be defined by what you pay, but rather by what you get in return.

Data-driven cost management

Identifying that value requires more than intuition. It demands reliable data. High-performing organizations rely on data-driven healthcare supply chain strategies and real-time analytics to guide decisions. Through regular reviews, benchmarking, and real-time analytics, they understand utilization, operational impact, and overall effectiveness, allowing them to spot inefficiencies early and adjust before costs escalate.

In a recent Becker’s Hospital Review article, hospital leaders emphasized that financial and workforce pressures are forcing a fundamental rethinking of supply chain strategy. As one CEO noted, “Hospital supply chains must evolve from ‘buying’ to ‘partnering’ through radical transparency.” This perspective reinforces the need for deeper collaboration, better data sharing, and more strategic decision-making across the supply chain ecosystem.

With greater visibility into both costs and operations, health systems can make more informed decisions that improve efficiency while maintaining high-quality care.

From cost cutting to cost optimization

Ultimately, reducing supply chain costs is not just about cutting spend. It is about optimizing it. The most effective healthcare organizations align purchasing decisions with long-term performance, ensuring savings are both meaningful and sustainable

Building a more optimized, efficient supply chain requires the right last-mile logistics partner to ensure consistency, visibility, and scalability across operations. MedSpeed supports this transformation by strengthening medical logistics at every step, helping health systems and labs reduce inefficiencies, improve utilization, and streamline critical workflows.

By ensuring the right items are in the right place at the right time, MedSpeed helps lower total cost while supporting high-quality patient care and long-term financial performance.