AI in Healthcare Procurement: Cost Versus Quality

Finding the right balance between patient care and staying within budget is a major challenge.

Healthcare organisations face two opposing priorities: keeping finances stable in the short term and making sure patient safety always comes first.

This challenge was the main topic of a recent webinar hosted by Healthcare Digital with Amazon Business.

During the webinar, IBM supply chain experts Kaitlyn Roche and Joe Shobe discussed how AI can help find ways to save money in healthcare sourcing while still maintaining clinical quality.

They talked about how using data can help standardise supplies, manage physician preference items, and make spending more efficient across large hospital networks.

They also pointed out an important change: AI is moving from just automating tasks to actually helping guide decisions that balance cost control with clinical standards.

If you want to learn more about how AI can help improve both costs and quality in healthcare procurement, you can watch Healthcare Digital's webinar on demand, in Association with Amazon Business.

The fragmentation bottleneck

One big challenge to making procurement more efficient in large hospital networks is that their systems are often fragmented.

When healthcare networks grow by acquiring other organisations, they often end up with different technologies and data that don't work well together.

This problem is especially clear in areas where spending is sensitive, like with Physician Preference Items (PPIs).

Joe explained that trying to standardise these expensive items doesn't work if you only focus on the budget.

"When you start to talk about cost reduction, it's the wrong conversation,” he says. 

“You need to have the conversation about ‘How do I improve outcomes while also looking for the optimal procedure.’"

He pointed out that clinical teams and supply chain teams often aren't on the same page.

"I dispense this item to the procedure and it's a different item nomenclature than what I have in the supply chain. 

“Those two little things need to come together so that I understand what's being used in the clinical system is mapped correctly to what I'm procuring in the supply chain system."

“Sometimes that's not even there. So, AI can help you understand the breaks, where it can't link data, and allow you to build the right model so that you're getting the reporting and information you need.”

Shifting from descriptive to prescriptive AI

To fix these data issues, developers and engineers are creating strong digital systems.

Kaitlyn said that to use AI well, organisations need to move beyond old machine learning tools and make bigger changes to how they operate.

"The shift with agentic AI from previous machine learning models is moving from the descriptive to the prescriptive,” she says. 

"Not just looking at what's currently happening, being able to describe that better, but actually making recommendations and acting on that information in a much quicker and much more informed way."

Overcoming cultural and structural barriers

Both experts agreed that just adding new technology isn't enough to make real change.

To make the change work, organisations need to update their usual procurement processes and get support from different teams.

Kaitlyn warned businesses not to rush into buying new software before making sure they're ready for it.

"Start with your organisation and culture. This isn't a technology implementation. It really is a full operating model shift," she says.

The panellists agreed that clinical teams should take the lead on standardisation rather than have changes imposed from above.

When doctors can see clear data that connects product choices to patient outcomes, procurement can move from a back-office task to a key part of strategy.

What is Amazon Business?

Amazon Business is a global platform that helps organisations make purchasing easier, control spending and improve supply chain efficiency.

The platform makes complex buying processes simpler and offers tools to help everyday purchases support sustainability goals.

With Guided Buying, administrators can set central rules, highlight preferred items, or block purchases that fail to meet an organisation's ESG standards.

Amazon Business also shows supplier sustainability ratings, like EcoVadis scores, right on the supplier listings when you make a purchase.

To learn how AI can support healthcare procurement in cost and quality improvement, watch Healthcare Digital's webinar on demand, in association with Amazon Business.