In just the past decade, manual processes, opaque supplier relationships and spreadsheet-based inventory tracking have gone from harmless inefficiencies across the healthcare procurement function to operational cost centers hamstringing strategic sourcing.
From artificial intelligence (AI)-powered demand forecasting to cybersecurity-hardened vendor portals, the pressure to digitize B2B healthcare procurement operations has reached a tipping point. But can the convergence of back-office innovations and FinTech solutions give a push to modernize healthcare procurement?
Healthcare procurement is uniquely complex. A single hospital system may rely on thousands of vendors, handling millions of SKUs, from high-cost surgical implants to everyday sanitation supplies. Historically, procurement teams have relied on a patchwork of legacy systems, manual data entry and siloed workflows.
But rising cost pressures, compliance scrutiny and cybersecurity risks are pushing organizations to rethink their procurement models altogether. The stakes are enormous: procurement inefficiencies are estimated to cost U.S. healthcare providers in the tens of billions of dollars annually.
See also: Digital Innovation Continues to Shift B2B Healthcare Market
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Tracking the B2B Healthcare Procurement Operating Model’s Evolution
There is a growing appetite among healthcare finance leaders for digital procurement platforms that consolidate vendor management, automate approvals and generate real-time visibility into spend.
The key findings from PYMNTS “How Modernizing Payments Is Revitalizing Healthcare” reveals that 67% of executives and decision-makers in healthcare payer organizations report their firms’ manual payment platforms are reducing efficiency.
One of the biggest game-changers in healthcare procurement is predictive analytics. Hospitals have traditionally struggled with demand forecasting, resulting in either overstocking expensive items or running out of critical supplies. With AI, those guesses can turn into data-driven decisions.
Another trend gaining traction is multi-tier supplier visibility, a concept borrowed from the manufacturing world. It’s no longer enough to know your direct supplier; hospitals now want insight into their suppliers’ suppliers, especially for mission-critical or sole-source items. This shift is being accelerated by geopolitical tensions and supply chain volatility.
Despite the technological progress, one major challenge persists: interoperability. Many health systems are still cobbling together procurement, finance and clinical systems that don’t talk to each other.
This creates data silos, reconciliation headaches and decision-making blind spots. For example, a procurement platform might flag a back-order risk, but without integration into the electronic health record system, there’s no way to correlate that with upcoming surgical schedules.
PYMNTS Intelligence, done jointly with Citi in the report, “The Impact of Misunderstood Treasurers in Healthcare,” found that a majority of healthcare treasurers (56%) say that their cash flows are unpredictable.
Read more: Healthcare Procurement Has a Growing Hacking Problem
Embracing Procurement as a Strategic Lever
For healthcare CFOs, procurement has become more than a cost center — it’s now a strategic lever for improving working capital and organizational resilience.
One innovation gaining traction is dynamic discounting, a finance mechanism that allows hospitals to pay vendors early in exchange for a discount. This not only improves supplier cash flow but also lets hospitals realize savings that go straight to the bottom line.
Other models like supply chain finance and inventory consignment are also seeing increased adoption. In consignment models, suppliers retain ownership of inventory until it’s used, freeing up capital for providers.
At the same time, modernization doesn’t come without risks. As healthcare organizations digitize procurement, they also expose themselves to new cyber vulnerabilities. With protected health information (PHI) and financial data moving between hospitals and vendors, procurement platforms have become attractive targets for ransomware and fraud.
“In 2021, there were 400 data breach lawsuits filed,” Philip Yannella, co-chair of the privacy, security and data protection practice at Blank Rome and the author of “Cyber Litigation: Data Breach, Data Privacy & Digital Rights,” 2025 edition, told PYMNTS in an interview published in May. “Last year, there were over 2,000.”
Vendor risk management is also evolving. What was once a one-time due diligence questionnaire is now a continuous process of third-party risk audits, compliance verification and real-time scoring of vendor cybersecurity maturity.
Supply chains aren’t linear, after all; they are more like webs. The more finance and procurement teams understand that web, the more agile they can be when shocks happen.
