Beyond inflation: Understanding the forces reshaping healthcare spend

2027 projection snapshot

Hospitals and health systems will enter 2027 with continued margin sensitivity, elevated expense pressure, and increasing variability across spend categories. While Kaufman Hall’s March 2026 National Hospital Flash Report showed month-over-month margin improvement, margins remained below 2025 levels and drug expense continued to be a primary driver of year-to-date expense growth.

Against that backdrop, Vizient projects a 3.54% increase in pharmaceutical prices for Vizient Pharmacy Program participants and a 3.39% average increase for the supply chain categories included in the analysis. These projections show broad but uneven pressure, with higher inflation concentrated in specialty medications, ambulatory pharmacy, IT hardware and software, purchased services, construction, capital equipment, and medical and surgical (MedSurg) products.

These projections measure price movement only. They don’t account for utilization, product mix, reimbursement, supply availability, or local contract performance—all of which may materially affect actual spend.

The forces behind the projections

The forces driving healthcare spend extend beyond category-level price movement. Pricing, utilization, reimbursement, innovation, workforce pressures, and site-of-care changes influence one another—and together affect care delivery planning, resource allocation, risk management, and organizational outcomes.

For pharmacy, financial risk is moving beyond traditional inpatient purchasing into ambulatory, specialty, and payer-controlled channels. Across supply chain categories, organizations are balancing cost management with growing demands for visibility and resiliency. Laboratory, capital equipment, physician preference items (PPI), and indirect spend and purchased services are becoming more closely tied to priorities such as access, throughput, digital transformation, infrastructure modernization, and long-term growth.

For health system leaders, the implication is clear: Non-labor expense management can no longer operate as a sourcing-only function. It must be grounded in the principles of a clinically integrated supply chain—connecting product, service, technology, and site-of-care decisions to clinical outcomes, workforce readiness, and financial sustainability.

Pharmacy highlights

Pharmacy remains one of the most visible and rapidly evolving areas of health system non-labor expense, yet the most significant changes are occurring beyond drug prices alone.

As therapies move across care settings, reimbursement models become more complex, and specialty channels expand, pharmacy decision-making becomes more dependent on capabilities such as care coordination, payer strategy, workforce readiness, and data visibility.

• Ambulatory and specialty therapies are driving the next phase of pharmacy spend pressure. Acute care inflation remains comparatively lower at 2.85%, while ambulatory care is projected at 3.64%, and specialty and complex medications at 4.04%—the highest projected inflation among the major pharmacy market segments.

  Provider-administered therapies, self-administered medications, and advanced therapies require pharmacy leaders to manage beyond acquisition cost. Leaders should evaluate site of care, payer coverage, reimbursement, specialty pharmacy access, and organizational readiness, as these factors play a growing role in determining financial results and patient access.

• Utilization growth may represent a greater financial risk than price inflation alone. Oncology comprises the largest share of analyzed pharmacy purchases at 25.59%, followed closely by autoimmune and inflammatory conditions at 23.39%. GLP-1 demand, cancer immunotherapies, oral oncolytics, immune globulin, biosimilars, and cell and gene therapies collectively illustrate why pharmacy leaders must manage demand, access, and reimbursement alongside acquisition cost.

• Contracting, channel visibility, and payer strategy are essential to margin protection. Products covered by a Vizient contract are projected to increase 2.73%, compared with 3.92% for non-contract products, reinforcing the value of formulary alignment and contract portfolio utilization where clinically appropriate.

  But contracting alone isn’t sufficient. High-cost medications are flowing through more fragmented and specialized distribution channels as manufacturers, payers, and specialty pharmacy networks continue to reshape access and distribution. This requires stronger alignment across the health system to ensure appropriate access, reimbursement, and financial stewardship.

Organizations that treat pharmacy as an integrated component of growth, access, and financial planning are better positioned to manage both cost and outcomes in this evolving care environment.

Supply chain, capital, and purchased services highlights

Supply chain categories offer another example of how non-labor expense is integral to organizational outcomes. Categories once viewed primarily as operational support—including technology, purchased services, facilities, and capital infrastructure—now affect access, capacity, workforce effectiveness, and long-term resiliency.

At the same time, clinically oriented categories such as MedSurg products, laboratory, and PPI now directly influence care delivery planning, procedural growth, diagnostic capability, and total cost of care.

Investments in imaging, ambulatory capacity, diagnostics, technology infrastructure, and procedural innovation are helping determine where care is delivered, how efficiently patients move through the system, and how organizations position themselves for future growth.

• Indirect spend, IT, and infrastructure are major cost drivers. Indirect spend and purchased services are projected to increase 4.73%, with IT hardware and software projected at 6.29%—the highest among all categories. Construction, operational support services, facilities, and non-medical capital equipment also are contributing to price pressure. These trends reinforce the need for stronger governance over purchased services, technology investments, facilities planning, and long-term infrastructure planning, particularly as organizations balance modernization efforts against continued margin pressure.

• Capital and procedural spend are increasingly tied to access, throughput, and site-of-care strategy. Capital and imaging equipment are projected to increase 3.21%, reflecting continued investment in imaging, patient monitoring, clinical informatics, ambulatory procedural capacity, and rural health infrastructure modernization.

  Physician preference items are projected at 2.55%, but procedural innovation, ASC migration, robotics, advanced cardiovascular technologies, and orthopedic implant strategies continue to reshape spending patterns. These trends and investments require disciplined physician alignment, utilization governance, and total cost of ownership evaluation, as technology adoption influences both procedural growth and long-term cost results.

• Resiliency and visibility are essential as utilization moves across settings. MedSurg products are projected to increase 3.05%, while laboratory is projected at 1.87%. Even where inflation is lower, utilization and sourcing risk remain important as care moves into ambulatory, outpatient, home-based, and decentralized settings.

  Health systems will need stronger visibility and planning across sites of care, supplier diversification, contract compliance, demand forecasting, and supply assurance to manage disruption risk, protect day-to-day reliability, maintain continuity of care, and support growth objectives.

The path forward

Managing non-labor expense in 2027 will require more than responding to inflation. The challenge is no longer managing individual categories but understanding how these changes interact across the health system.

Health systems should focus on strengthening coordination across pharmacy, supply chain, finance, clinical leadership, and operations; improving visibility into utilization and spend across sites of care; and evaluating investments through the lens of long-term value, resiliency, and total cost of care.

The ability to connect decisions across the organization, translate market insights into action, and proactively address emerging risks will be a defining advantage in the years ahead.