Health care supply chain leaders face a paradox: they operate in an industry where clinical excellence and patient safety are non‑negotiable, yet every year they are expected to extract more savings from vendors.
To help manage costs, most U.S. hospitals participate in group purchasing organizations (GPOs). But the traditional GPO model has its limits. Contracts typically run only two to three years, which creates an unstable environment where health systems must renegotiate just as they begin to reap the benefits of implementation. Short cycles encourage a race to the bottom on price, inhibit innovation and leave procurement leaders juggling numerous vendors with little strategic alignment.
Advantus Health Partners was founded by operators who lived this reality. Its leaders designed a new supply chain model for a 48‑hospital system and then launched Advantus to help other providers. Their philosophy challenges conventional GPO wisdom: rather than enlisting hundreds of suppliers and renegotiating constantly, Advantus curates a narrower base of strategic vendor partners and enters long‑term relationships built on performance, cultural alignment and innovation.
Learn about the Advantus criteria for selecting health care suppliers and strategic partners — and why that approach delivers superior results for health systems.
Why More Vendors Is Not More Value
It is tempting to think that the more vendors you have, the more leverage you can exert over price. In practice, however, unchecked vendor onboarding creates complexity, risk and inefficiency.
Each additional supplier introduces variation in processes, data interfaces, compliance requirements and performance standards. Without clear selection criteria and performance management, organizations may onboard vendors whose products or services are inconsistent with clinical needs or patient experience goals.
In other words, more is not better; better is better. By selecting a handful of high‑performing partners and holding them accountable to clear metrics, supply chain leaders can reduce supply risk, streamline operations and free up time for strategic work.
Strategic vs. Transactional Vendor Partnerships
To move beyond transactional vendor relationships, Advantus champions strategic partnerships. Shaun Simpson, system director at Advantus, contrasts a “vendor–customer” relationship with a genuine partnership. Transactional relationships resemble grocery shopping: you pick items off the shelf, pay and leave. The supplier does not learn your preferences or invest in your outcomes.
In contrast, strategic partnerships involve mutual education and problem solving. Simpson explains that vendors should be willing to learn alongside the health system team, bringing tools, insights, data and industry expertise to help the organization move from “A to C” more efficiently — and perhaps discover that the goal should be X or Z instead.
Two‑way collaboration is fundamental. Simpson recounts how Advantus’s partner HHS embodies this ethos. HHS is deeply integrated into hospital departments — environmental services (EVS), nutrition, patient transport and valet. Because their associates work on the front lines, they often hear about operational challenges before supply chain leaders do.
Instead of simply waiting for instructions, HHS brings both problems and solutions. Here are just a few examples Advantus has seen in their partnership with HHS:
- Robotics support for EVS: cleaning large hospital floors was labor‑intensive and constrained by staffing shortages. HHS proposed using robotics for floor care, piloted the technology and expanded it to multiple facilities for both quality and efficiency improvements.
- Standardized EVS chemicals: HHS partnered with infection prevention leaders and a leading chemical partner to standardize EVS chemicals, simplifying choices, improving cleaning quality and reducing costs. This collaboration drove improvements in patient safety and cost control.
- Convenient curtain changes: HHS noticed that the health system paid hundreds of thousands annually forcubicle‑curtain changes, yet HHS EVS workers were already in the rooms and could perform this function for the hospital at no extra cost. HHS partnered with hospital operations leaders and a leading textile partner to use existing staff to swap curtains at no extra charge, saving the system high six‑figure sums.
These examples show the difference between a vendor that simply takes orders and a partner that proactively identifies improvements.
Advantus’s Vetting Criteria for Selecting Partners
To build a network of partners like Medline, GE Healthcare, HHS and more, Advantus relies on a forward-thinking vetting process.
Unlike traditional GPOs that prioritize lowest price, Advantus uses a weighted analysis to evaluate vendors on multiple dimensions. Shaun identifies several core criteria:
- Expertise – Vendors must demonstrate deep, proven competence in their service area, whether it is hospitality services, healthcare technology management or supply distribution. Their people must understand health care workflows and regulatory requirements.
- Culture and Patient Experience – Because vendors often interact directly with patients, their culture must align with the health system’s mission. Advantus looks for a culture of flexibility, collaboration and training.
- Flexibility and Customization – Many health care vendors resemble “big box stores”; they offer a menu of services and expect customers to adapt. Advantus rejects this approach. Vendors must be willing to adjust programs and processes to meet the unique needs of each hospital or demographic.
- Collaboration and Continuous Improvement – Advantus seeks partners who bring solutions, not just issues. The vetting process favors vendors that can propose new technologies (e.g., robotics), share data insights, and work jointly on solutions.
- Performance and Compliance – Vendors must meet stringent performance metrics around service levels, turnaround times, quality outcomes and regulatory compliance. Advantus uses scorecards and site visits to evaluate reliability and ensure alignment with clinical standards.
- Financial Stewardship and Value Creation – Price matters, especially in today’s economy. But Advantus looks at total cost of ownership and long‑term value. Vendors that can lower costs through process optimization or innovative investments score higher than those offering short‑term discounts.
Results of Stronger Vendor Partnerships
What can your health system gain from this approach?
First, long‑term, stable supplier relationships enable both parties to invest in process improvements and technology. When suppliers are responsible for achieving key performance indicators (KPIs), these value‑based relationships form the building blocks of a more mature, transparent supply chain.
Second, strategic partnerships improve resilience and risk management. Long‑term partners can help health systems anticipate and mitigate disruptions, such as pandemic‑driven shortages or workforce challenges.
Third, focusing on value rather than lowest price helps control costs in a sustainable way. Mature supply chains work with vendors to stave off inflationary cost increases and collaborate with clinicians to reduce procedure costs. By negotiating on service design and outcomes, health systems can achieve savings beyond simple unit price reductions.
Fourth, strong vendor relationships support environmental, social and governance (ESG) goals. Approaching supply chains with ESG in mind reduces carbon footprints, decreases energy costs and contributes to the bottom line.
It’s Time to Upgrade your Supply Chain Partners
The healthcare supply chain sits at the intersection of patient care and financial sustainability. Traditional GPOs deliver price savings but often fall short in resilience, innovation and alignment with clinical goals.
Advantus’s approach offers a smarter way forward: By curating an ecosystem of strategic partnershipsbased on rigorous vetting criteria, Advantus ensures that every partner brings expertise, cultural alignment, flexibility and collaborative spirit.
By moving beyond transactional contracts and adopting a strategic approach to vendor partnerships, your health system can unlock long‑term value, improve patient outcomes and create a supply chain built to withstand future challenges. Contact us to discover how vetted partnerships will help to future-proof your organization.
