Multi-sourcing in Healthcare Procurement

Leanne Strickler

As the head of procurement at your hospital, your job is demanding enough even when things are running smoothly. Lately, you can’t seem to catch a break. Suppliers aren’t delivering critical items on time. Prices for basic supplies have skyrocketed, and you’re constantly putting out fires. There has to be a better way.

What if you could transform your procurement process to minimize headaches and maximize value? By adopting a multi-sourcing strategy, you’ll gain more control, flexibility, and cost savings. This approach revolutionizes traditional healthcare purchasing models by diversifying your supply base and keeping suppliers on their toes. Get ready to improve quality, access innovations, and avoid supply chain disruption. Multi-sourcing is the remedy for what’s ailing your procurement operations. Discover how this game-changing strategy can ease your stress and make you a supply chain hero.

The Benefits of Multi-sourcing in Healthcare Procurement

To keep your hospital running, flexibility and risk mitigation are key. That’s why more and more healthcare organizations are turning to multi-sourcing for procurement.

  • Increased competition. Tap into a larger range of suppliers to get the best value. With multiple vendors competing for your business, you have more leverage to get lower prices and higher quality.
  • Reduced dependency and risk. Don’t put all your eggs in one basket. By diversifying your supply chain across several suppliers, you avoid being locked in or disrupted if one vendor faces issues.
  • Enhanced innovation. Different suppliers bring different strengths, solutions, and ideas. Multi-sourcing gives you exposure to more innovations that you can benefit from.
  • Greater flexibility. It’s easier to change things up when you’re not reliant on a single source. You have more freedom to swap out vendors or rebalance as needed to meet changing needs.
  • Focused resources. Outsourcing some procurement functions allows your organization to concentrate on its key priorities. Let vendors handle what they do best so you can focus on patient care and outcomes.

With huge cost savings, flexibility, and risk reduction, multi-sourcing makes sense for healthcare. By partnering with multiple pre-vetted vendors, hospitals gain security, choice, and value. Free up your resources, gain expertise, and take your procurement to the next level with the power of multi-sourcing. It may just be the prescription for greater efficiency and effectiveness that the doctor ordered!

If you’re looking for some more general information about multi-sourcing, check out this article.

How Hospitals Can Implement a Multi-sourcing Strategy

To implement a multi-sourcing strategy, hospitals need to make some important changes.

First, rethink your procurement process. Rather than relying on a single vendor for all your needs, look at breaking up contracts into specialized modules. For example, instead of getting your entire EMR system from one place, choose separate suppliers for modules like e-prescribing, telehealth, and medical imaging that meet your specific requirements.

This approach gives you more flexibility and control. You can match each module to your needs and upgrade or replace them independently. It also spurs more competition among vendors. They have to work harder to win your business for each module.

Next, take advantage of cloud-based information sharing. The cloud makes it much easier for different EMR modules and suppliers to connect and work together, and patients reap the benefits. Patient information follows them seamlessly between providers and services, alleviating redundant input and saving patients time. Utilizing cloud-based platforms that share information also creates cost savings. You don’t have to invest in expensive on-site hardware and software, time-intensive IT projects, or the staff to maintain on-site databases and servers.

Finally, reorganize internally around patient demand. Break down divisions between departments and specialties. Use multisourcing and the cloud to quickly share information and respond to patients’ needs, no matter where they are in the system.

Following these steps will revolutionize how you procure healthcare technology and services. A multisourcing strategy, enabled by the cloud, can help lower costs, improve the patient experience, and make your hospital more agile and responsive. 

Key Considerations for Healthcare Multi-sourcing

Physician Preferences

When multi-sourcing medical supplies, hospitals must consider physician preferences. Doctors often develop preferences for certain brands or types of supplies based on their experiences. Not accounting for these preferences could lead to pushback, complications, or compatibility issues. Talk to physicians to determine what they prefer for key supplies, especially for high-risk procedures. You may need to negotiate with suppliers to provide those preferred brands at a reasonable cost.

Rapid Innovation

The healthcare industry is rapidly innovating. Multi-sourcing strategies must evolve quickly to keep up with changes in medical technology, treatments, and best practices. What works this year may be outdated next year. Stay on top of trends in healthcare to adjust sourcing accordingly. Work closely with suppliers that demonstrate a commitment to continued innovation. Consider shorter-term contracts and relationships with multiple suppliers in fast-changing areas of medicine.

Dependable Supply

Above all else, a hospital’s supply chain must be dependable. Multi-sourcing introduces more complexity, and thus more potential points of failure. Choose suppliers carefully based on their proven ability to provide consistent, high-quality products and services. Build contingency plans for possible supply chain disruptions into your multi-sourcing strategy. Consider keeping secondary suppliers on standby, and maintaining small buffer stocks for critical supplies.

Additional Considerations

Other factors to weigh when multi-sourcing for hospitals include:

  • Cost and value: Achieve the best overall value through strategic negotiations and contracts with multiple suppliers.
  • Standardization: Balance cost savings from standardization with physician preferences and rapid innovation.
  • Logistics: Carefully manage the logistics of working with multiple suppliers to avoid issues like miscommunication or delayed/incorrect deliveries.
  • Compliance: Ensure all suppliers and products meet strict healthcare regulations and compliance standards to avoid penalties or liability issues.

By carefully evaluating these key considerations, hospitals can implement an effective multi-sourcing strategy that reduces costs while maintaining high standards of care. Close collaboration with physicians and suppliers is key to success. With the right partners and contingency plans in place, multisourcing can revolutionize healthcare procurement.

Case Study: How a Major US Hospital Network Achieved Millions in Savings

A major US hospital network provides an excellent case study of how multi-sourcing can revolutionize healthcare procurement and generate significant cost savings. By implementing several cost-reduction strategies, this network achieved millions in savings.

Evidence-based strategies

The network focused on evidence-based fall prevention programs, reducing falls in hospitals that often lead to high costs. Implementing proven fall prevention methods and technology allowed the network to cut costs associated with inpatient falls.

Modernizing infrastructure

The network also updated its data centers using Cisco technologies, achieving improved efficiency, security, and cost savings. By upgrading to state-of-the-art data centers, the network reduced IT costs through consolidation and avoided expensive downtime.

Renegotiating vendor contracts

The network renegotiated contracts with key vendors to get better rates and terms. Using its size and buying power, the network was able to get substantial discounts from vendors seeking its large-volume business. New pricing and payment terms with vendors accounted for much of the total savings.

Optimizing staffing

The network optimized staffing levels and schedules based on patient volume and acuity. By aligning staffing to demand, the network reduced excess staffing costs during low-volume periods. The network also found opportunities to reorganize certain roles and responsibilities to improve productivity.

By taking a multi-pronged approach to cost reduction through evidence-based strategies, technology upgrades, improved vendor management, and staffing optimization, the hospital network generated over $50 million in annual savings. The success of this network shows how multi-sourcing can help healthcare organizations cut costs in innovative ways while still delivering high-quality care. The key is tapping into the power of diverse resources and solutions to fundamentally transform spending.

FAQ: Common Questions About Multi-sourcing in Hospitals

What exactly is multi-sourcing in healthcare procurement?

Multi-sourcing refers to a procurement strategy where a hospital sources goods and services from multiple external suppliers, rather than relying on a single provider. This approach allows hospitals to get the best value for money by choosing the most suitable and cost-effective suppliers for different product categories.

How does multi-sourcing benefit hospitals?

  • Cost savings. By negotiating with different suppliers, hospitals can often get lower prices. They can play suppliers off against each other to get the best deal.
  • Improved quality. Hospitals can choose suppliers that specialize in particular products or services. This can lead to higher-quality goods and services.
  • Reduced risk. Relying on a single supplier poses risks like price hikes, supply shortages, or service disruptions. Multisourcing mitigates these risks by diversifying the supply base.

How do hospitals implement a multi-sourcing strategy?

  1. Determine which product and service categories would benefit most from multi-sourcing. Things like medical supplies, IT equipment, and facilities management are good options.
  2. Research and evaluate potential suppliers in each category. Consider their experience, quality standards, customer service, and pricing.
  3. Negotiate contracts with the selected suppliers, often through group purchasing organizations that hospitals belong to.
  4. Manage multiple supplier relationships to ensure coordinated purchasing and the best outcomes. This may require a dedicated multisourcing manager.

What challenges does multi-sourcing present?

  • Increased complexity. Managing multiple suppliers and contracts requires significant resources and expertise.
  • Difficulty integrating systems. Integrating the different IT systems and processes used by various suppliers can be challenging.
  • Supplier conflict. There is a risk of conflict or lack of cooperation between suppliers. Clear communication and management are required.

Using a multi-sourcing approach for procurement allows hospitals to optimize value and outcomes. While it does present some challenges, when implemented strategically, multi-sourcing can revolutionize the way hospitals purchase goods and services.


Multi-sourcing in healthcare procurement is making it possible for hospitals to provide better care at lower costs. By tapping into multiple suppliers for the same categories of goods and services instead of relying on a single source, healthcare organizations gain more negotiating power, access to innovation, and supply chain resilience. The synergies and cost savings gained from diversifying suppliers and increasing competition are game-changing. While transitioning to a multisourcing model requires upfront investment and effort, the long-term benefits to your hospital’s bottom line and ability to serve patients are well worth it. If you’re not already exploring how to implement multisourcing in your procurement strategy, now is the time to start. The healthcare industry is transforming, and multisourcing could be your competitive advantage.

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