Healthcare organizations oftentimes cannot access procurement data to develop actionable steps to boost efficiency. The lack of health IT to identify and analyze procurement data can lead to a lot of wasteful spending. In response to healthcare procurement challenges, more provider organizations are looking to implement health IT systems that can better manage procurement costs under value-based reimbursement models. Many value-based reimbursement models require healthcare organizations to accurately measure and compare healthcare costs with the outcomes of the patient.

The core of healthcare procurement spending is the cost of the product, but healthcare organizations should be aware of invisible costs associated with the procurement, such as inventory holding and distribution expenses. Understanding the costs behind utilization, internal distribution, inventory holding, and special deliveries will not only yield savings but will also enhance clinician and patient satisfaction.

Generally, medical equipment is produced in high volumes with standard specifications. However, customization in specifications to meet the specific needs increases the medical equipment procurement cost. The manufacture of such specific products may result in errors as the companies struggle to meet the demands of the end-users within the stipulated time frame.