When healthcare organizations face margin pressure, the first instinct is often to turn to purchasing. After all, procurement teams manage contracts, negotiate pricing, and keep the supply chain running. But here’s the truth: margin improvement is a strategic initiative that goes far beyond buying smarter.
At Healthcare Margin Specialists (HMS), we’ve spent 17 years helping health systems achieve sustainable savings. In our experience, here are the top 10 reasons why margin improvement isn't just a purchasing issue.
1. Purchasing Teams Are Focused on Daily Operations
Procurement professionals are busy ‘keeping the engine running.’ Deep, strategic analysis takes time and resources they often don’t have.
2. Speed to Results
Internal teams juggle multiple priorities, which slows margin improvement initiatives. HMS brings dedicated resources and proven processes to accelerate savings—often delivering measurable results in weeks, not months. This speed is critical when margins are under immediate pressure.
3. Expanded Market Visibility & Advanced Analytics
Purchasing sees their own contracts—but not what others are paying. HMS works with clients nationwide, giving us access to pricing benchmarks and trends that uncover hidden savings. Beyond pricing, we use proprietary analytics and national benchmarking to validate opportunities and ensure sustainable results.
4. We Complement, Not Compete
Our role is to support purchasing, not replace them. We provide tools, expertise, and bandwidth they can’t spare.
5. Unbiased Supplier Relationships
Internal teams may have long-standing vendor ties that make tough negotiations harder. HMS approaches suppliers respectfully but objectively—always prioritizing your margin.
6. Relieves Internal Pressure
Clients tell us they appreciate having HMS handle this work because it frees their team to focus on strategic priorities. Beyond freeing up time, it also takes pressure off them to negotiate with people they may be friends with. When the supplier asks why an initiative like this is happening, the person in the company being asked can simply say, 'This is an initiative coming from the top and they don't have control of it. Please just cooperate with the process.'
7. Aligned Incentives
We only get paid when you save. That means we concentrate on opportunities that truly move the needle—no wasted effort on low-impact areas.
8. Critical Areas Purchasing Doesn’t Touch
Certain categories—like pharmacy and therapy services—are often outside purchasing’s scope. Unless you’re a pharmacist with proprietary pricing data (which HMS has), negotiating pharmacy spend effectively is nearly impossible. HMS also brings expertise in therapy services, another area typically overlooked by procurement.
9. GPO Limitations
Purchasing teams often rely on Group Purchasing Organizations (GPOs) for better pricing. While GPOs have their place, their model is fundamentally different: GPOs earn a percentage of sales, not savings, so their incentives don’t always align with reducing your costs. They typically work with a limited set of contracted suppliers, which can restrict flexibility and innovation. GPOs sometimes have restrictive contracts regarding minimum purchasing standards and other restrictions. HMS will work to make sure you get the best pricing regardless of changes in purchasing volume. HMS works with any supplier that benefits the client, ensuring maximum savings and strategic advantage.
10. Strategic Focus Beyond Price
Purchasing often focuses on unit cost reduction, but margin improvement requires a holistic approach: Total cost of ownership analysis (e.g., service terms, utilization patterns, waste reduction). Cross-category optimization—looking at how decisions in one area affect others (e.g., food services impacting labor costs). HMS aligns financial, operational, and clinical priorities for sustainable results.
The Bottom Line
Purchasing is essential—but margin improvement is bigger than procurement. It’s about financial resilience, operational excellence, and clinical quality working together. HMS brings the expertise, data, and speed to make that happen.
Ready to Improve Your Margins?
If your organization is feeling margin pressure, let’s talk about a strategy that goes beyond purchasing. Contact HMS to explore how we can deliver measurable, lasting results. Schedule a FREE Revenue and Margin Assessment Call with our team or email us at getstarted@hmspecialists.com.
