Centralized contracting an imperative for reducing health system costs.

As a health system expands, there is a concomitant need for its leaders to take steps to ensure that redundancies in purchasing processes do not drive up costs to unsustainable levels. Spectrum Health in Grand Rapids, Mich., tackled this challenge by instituting a revenue-driven, patient-care-focused value analysis process that centralized contracting processes in several areas of nonsalary expense. Spectrum went on to uncover opportunities for cutting costs in its decentralized, non-purchase order expenses, saving 24 percent in the first of four arenas.