Transforming Purchased Services

A purchased service is any service outsourced or contracted for and performed by a third party rather than a hospital’s in-house staff. “We define purchased services as anything that doesn’t have a SKU number,” says Andy Motz, Vice President of Valify Advisory Services and Custom Contracting with Valify Solutions Group (VSG). “They are what a hospital needs to keep it running—from reference lab services and blood products to security and elevator maintenance.”

“Because they often span multiple departments across a health system, outsourced services can be difficult to manage,” Motz explains. “Oftentimes, the decision-making and ongoing contract management are decentralized. Adding to those challenges is the complexity of the categories and a lack of consistent operational metrics.”

For providers who manage multiple facilities of varying sizes in widespread locations, contracts with local suppliers for these services can hide a lot of wasted spend from potential redundancies, as well as regional price variations.

An experienced partner in your corner

As HealthTrust’s strategic partner, Valify provides access to purchased services contracts in over 1,400 categories, processing $1.3 trillion in spend data across hundreds of healthcare organizations. From Valify’s beginnings as a SaaS start-up, to becoming the market leader for end-to-end solutions for managing purchased services expenses, the organization has adapted its solutions over the last decade to address the evolving needs of healthcare providers.

Valify’s focus on purchased services, which accounts for nearly 50% of a hospital’s nonlabor spend, continues to generate results. By targeting the top five categories, representing approximately 20% of that spend, Valify empowers members with unparalleled data insights, robust benchmarks and tailored resources to make informed decisions.

For example, with Valify’s Power Benchmarking (PB) program, providers can optimize cost management, quality and supplier relationships. With the provider’s input on selecting categories, Valify can analyze various data to:

• Uncover metrics around service level agreements (SLAs). PB captures and compares SLAs, offering insights into industry standards and performance expectations.
• Identify price ranges. By looking at the pricing structures of healthcare organizations and their peers, PB enables a provider to gauge competitiveness and negotiate effectively with suppliers.
• Determine best practices. By studying best practices adopted by top performers, healthcare providers can learn and implement strategies that drive efficiency and quality.
• Assess terms and conditions. Valify reviews agreements across different suppliers and hospitals to identify contract terms and conditions prevalent in a particular category. This analysis aids in structuring contracts that are fair, comprehensive and aligned with industry norms.

While its full potential remains to be seen, artificial intelligence (AI) has permeated many aspects of our lives. Among other uses in healthcare, it can now be deployed to help providers uncover deeper insights, compare benchmarks and access tools to optimize their nonlabor spend. In 2024, Valify integrated AI into its technology platform.

“The investment in responsible AI enhances Valify’s capabilities to deliver unique insights and automated solutions while ensuring long-term, sustainable benefits for our clients,” says Les Popiolek, Chief Executive Officer at Valify. “AI differentiates our platform from competitors and further expands our ability to optimize provider purchased services programs even more effectively.”

According to Valify’s Director of Product Management Rick Mattock, AI enhances the Valify user experience for both purchased services experts and those newer to the field. “AI enables us to offer healthcare organizations a solution that can transform their procurement management by automating detailed spend data and producing concise analyses that highlight trends, comparative analytics and savings opportunities. Now, a healthcare system receives access to vast amounts of data that is processed rapidly. Ultimately, this saves time, reduces costs and improves the speed of decision-making,” he says.

“While data itself is essential, it’s the strategic application of advanced AI that unlocks deeper insights and drives meaningful change for healthcare leaders,” adds Mattock.

FIND OUT HOW VALIFY CAN TRANSFORM your organization’s purchased services program by reaching out to your HealthTrust Account Manager or by emailing info@getvalify.com

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