The Performance Gap: Healthcare’s next opportunity to turn savings into enterprise value

The contracting gap: Can you manage the spend you can’t see?

Some spend never reaches a contract or purchasing pathway. This is often found across fragmented indirect spend and purchased services categories—from facilities and IT to administrative, professional, and support services—where purchases may be spread across departments, locations, and hundreds of suppliers. Individually, many of these expenses can appear too small to warrant executive attention, but collectively, they represent a significant opportunity.

These purchases are often decentralized, inconsistently governed, and difficult for supply chain teams to see in one place. Without that visibility, organizations have limited ability to determine which expenses could be consolidated, moved onto existing contracts, or prioritized as new sourcing opportunities. Intelligent automation can help surface, categorize, and prioritize that fragmented spend, turning thousands of seemingly insignificant purchases into a clearer view of where meaningful opportunities exist.

The operations gap: Does negotiated value survive execution?

Once a contract is in place, its terms must move through purchasing, invoicing, payment, and other operational workflows before savings can be realized. Each step depends on accurate data, connected processes, and clear accountability to keep negotiated value intact.

That becomes difficult when contract terms, purchase orders, invoices, and payment data move through different systems and workflows. Price inaccuracies can go unnoticed, exceptions may require manual review, and rebates or discounts can be missed. Even savings that are successfully captured can be re-spent elsewhere in the organization without clear visibility into whether the expected financial impact ever reached the P&L. When these issues recur across thousands of transactions, small operational discrepancies can become a large source of lost value over time.

Greater connectivity across these workflows gives organizations an opportunity to identify where value is at risk and intervene earlier. By connecting contract and transaction intelligence, automating routine monitoring, and addressing recurring exceptions at their source, health systems can move toward continuous price assurance—protecting negotiated value throughout execution and improving confidence that expected savings become realized financial performance.

The utilization gap: What happens after the product decision?

Financial performance continues to change long after a product has been selected and purchased. A health system may negotiate a strong price and reach agreement on a standardized product, but the expected value depends on what happens next—whether the product is adopted, how it’s used, where practice varies, and whether utilization shifts over time.

That challenge is especially visible in physician preference items and other clinically sensitive categories. Product choices can vary across physicians, procedures, and sites of care; utilization can shift toward higher-cost alternatives; and standardization initiatives may produce different levels of adoption across the organization. Without real-time monitoring, those changes can be difficult to identify until well after they have affected cost and performance. The challenge compounds when supply chain, utilization, and clinical outcomes data remain siloed or lag behind the decisions leaders are trying to make.

Greater clinical and financial integration gives organizations a more complete view of what happens after a product decision. Connecting clinical, utilization, and financial data gives leaders a clearer view of where variation exists, where standardization makes sense, and whether those decisions are delivering the intended results. That visibility also creates a continuous feedback loop—helping leaders understand whether an initiative is delivering the intended savings, quality, and patient outcomes and identify where additional opportunities may exist.

From purchasing power to performance power

Closing these gaps requires a broader view of supply chain performance.

Health systems need connected data that follows value across the lifecycle, governance that establishes accountability for realized performance, workflows that turn signals into action, and expertise that helps teams interpret those signals and make better decisions.

Technology—and particularly AI—will expand what’s possible. Agentic workflows can help identify sourcing opportunities that previously required too much manual effort to pursue. Connected contract and invoice intelligence can surface exceptions sooner. Advanced analytics can bring clinical and financial evidence together when product and utilization decisions are being made.

Through Vizient Edge, Vizient has unified its data and capabilities to give healthcare leaders a more connected way to orchestrate performance across the supply chain lifecycle and close performance gaps.

Realizing that value still depends on expertise, governance, and execution. The organizations that close performance gaps are the ones that can turn insight into action and sustain change over time.

The greater opportunity is connecting those capabilities across the lifecycle. Improved visibility from negotiation through execution gives healthcare leaders an opportunity to manage non-labor spend as an enterprise performance lever and create more durable financial value.

As health systems consider where their next performance opportunity may lie, one question can help bring the entire lifecycle into focus:

How much of the value your organization negotiates can you trace all the way to the P&L?