Indirect spend and purchased services outlook: Managing the hidden infrastructure behind health system performance

Indirect spend and purchased services has outgrown its traditional role. Once managed at an arm’s length from strategic planning, construction, cybersecurity, information technology (IT), and other services now influence far more than operating costs. They determine whether health systems can sustain capacity, support workforce needs, maintain service continuity, and execute long-term strategies.

These are more than just procurement line items. They’re the operational backbone of care delivery—and the decisions made about them today will influence infrastructure investment, technology modernization, and organizational resilience for years to come.

The strategy is clear: Indirect spend demands the same discipline applied to clinical supply chains. The organizations that move first—strengthening governance, rethinking sourcing strategies, and integrating indirect spend into enterprise risk planning—will be better positioned to absorb cost pressure and accelerate performance.

The challenge, then, is no longer recognizing the importance of indirect spend—it’s understanding how these investments shape an organization’s ability to execute strategic priorities. Construction, technology, and workforce illustrate how decisions once managed within individual functions now carry enterprise-wide implications.

Market dynamics to watch

Several market forces are expected to shape indirect spend and purchased services strategy in 2027:

Here’s a closer look at construction, technology, and workforce.

1. Construction planning begins long before ground is broken.

Construction remains one of the largest indirect spend investments, but project success is influenced by procurement timing, supply availability, and market conditions well before construction begins. Health systems continue to invest in renovation, infrastructure modernization, and access expansion—while facing heightened competition for skilled trades and critical materials, driven in part by large-scale data center development. As demand for electrical infrastructure and power-intensive equipment grows, lead times for key components such as generators and custom air-handling units have expanded, creating new risks for project schedules, sequencing, and budgets.

In response, organizations are adopting more proactive, supply chain-informed planning strategies. Issuing purchase orders during early design phases, standardizing suppliers, and pre-purchasing critical materials can help secure production capacity, reduce delays, and mitigate price escalation. Procurement strategy has become as important to project execution as project design.

Construction planning also is becoming more closely connected to broader enterprise priorities. Energy management; facilities readiness; and furniture, fixtures, and equipment planning increasingly influence long-term capital decisions, reflecting a more coordinated approach to supporting future care delivery and organizational performance.

2. The most expensive technology decision may not be the purchase itself.

Healthcare organizations continue investing in digital infrastructure, cybersecurity, automation, and AI-enabled capabilities, but the costs associated with those investments extend well beyond acquisition. Rising infrastructure, software, and services costs and payment models are reshaping the total cost of ownership.

As with construction materials, demand from large-scale data centers and AI infrastructure continues to constrain global supplies of memory, storage, and compute-intensive hardware. As a result, healthcare organizations are facing higher prices, longer lead times, order delays, and fewer alternatives when key technology components become unavailable. Cloud providers are introducing AI-specific consumption pricing that also can significantly increase operating expenses.

Software investments are evolving just as quickly. EHR, ERP, cybersecurity, collaboration, revenue cycle, and other software vendors are embedding AI through premium license tiers, consumption-based pricing, and add-on modules, making license governance and value realization critical to controlling spend.

Technology strategy is becoming an enterprise risk management exercise. Organizations are prioritizing cost predictability, supply assurance, and lifecycle planning while balancing innovation initiatives. Closer coordination among IT, supply chain, finance, and operational leaders will ensure that technology investments deliver long-term organizational value.

3. How work gets done has become as important as who does it.

Labor availability has become a primary driver of indirect spend decisions across clinical and non-clinical services, influencing operating models and cost predictability more than wage inflation alone. Persistent workforce constraints, retirements, and competition for specialized technical talent are prompting health systems to rethink how essential services are staffed, sourced, and managed.

Healthcare technology management, laundry and linen, and select clinical staffing categories illustrate this shift in different ways. In healthcare technology management, shortages of experienced biomedical and diagnostic imaging engineers—driven by an aging workforce and limited training pipelines—are prompting organizations to adopt outsourced or hybrid service models to maintain specialized expertise and service continuity. In laundry and linen operations, some health systems are consolidating services through shared or regional models to improve utilization and offset fixed labor costs, while others are outsourcing to improve cost predictability amid ongoing staffing challenges. Although these approaches differ, they reflect the same underlying reality: Labor availability is reshaping sourcing decisions alongside cost.

These decisions increasingly involve a broader trade-off between control and predictability. Outsourced and hybrid models may carry higher contracted costs, but they can reduce exposure to recruitment volatility, overtime, and service disruption. At the same time, labor-intensive services remain vulnerable to external cost pressures tied to energy- and petroleum-based inputs, including plastics, chemicals, and laundry processing supplies, contributing to continued uncertainty in long-term cost forecasting.

Clinical labor markets have stabilized in many areas since the height of the pandemic, particularly for contract nursing and allied health professionals. Physician and locums staffing, however, remain more constrained, reinforcing the importance of utilization management, workforce planning, and long-term sustainability for specialized roles.

These shifts are redefining workforce strategy as an operating model decision. Organizations are balancing internal staffing, outsourced partnerships, and regional service models to strengthen service continuity, improve operational resilience, and create greater predictability in how essential services are delivered.

From cost management to performance management

Indirect spend has become too consequential to be managed as a collection of independent purchasing decisions. Construction, technology, workforce, and purchased services increasingly influence an organization’s ability to adapt, execute, and deliver care, making cross-functional coordination as important as cost management itself.

Managing these investments requires connecting procurement, operations, finance, and long-term planning to the outcomes health systems are working to achieve. The organizations that move first will be better positioned not only to navigate cost pressures, but also to strengthen resilience, improve execution, and build the operational foundation needed for future growth.

Four moves to make now

Health system leaders must elevate indirect spend and purchased services to an enterprise governance priority—aligning construction, IT, facilities, and purchased services with clinical, operational, and financial strategy while assessing sourcing models through the lens of continuity, workforce sustainability, and long-term value rather than cost alone.

Indirect spend requires enterprise-level governance that integrates infrastructure, IT, facilities, and purchased services into strategic clinical, operational, and financial planning—not just routine procurement updates. Sourcing and operating model decisions must prioritize service continuity, workforce sustainability, and long-term organizational value over cost alone. For IT in particular, the focus must shift from price negotiation to risk and lifecycle management as cybersecurity, AI, and software costs continue to accelerate.

Lee Kelley also contributed to this article.

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