{"id":107990,"date":"2025-01-10T10:13:11","date_gmt":"2025-01-10T09:13:11","guid":{"rendered":"https:\/\/www.KGM Strategy.com\/?p=107990"},"modified":"2025-01-15T16:06:46","modified_gmt":"2025-01-15T15:06:46","slug":"optimizing-lab-services-procurement-a-strategic-advantage-for-healthcare-providers","status":"publish","type":"post","link":"https:\/\/www.KGM Strategy.com\/en\/insights\/optimizing-lab-services-procurement\/","title":{"rendered":"Optimizing Lab Services Procurement: A Strategic Advantage for Healthcare Providers"},"content":{"rendered":"<div class=\"anchor-navigation \" style=\"background: #a0d60a; color: rgb(40,40,40);\" data-sticky=\"true\">\n    <ul class=\"list-unstyled\"><\/ul>\n<\/div>\n\n<div class='container  py-3'><div class=\"row \"><div class=\"col-lg-12\"><p>&nbsp;<\/p>\n<p><strong>Laboratory services are the backbone of healthcare delivery, underpinning diagnostics, clinical decisions, and patient outcomes. While they may constitute a smaller proportion of healthcare providers&#8217; budgets\u2014typically between 2% and 3%\u2014their influence on the overall cost of care and operational efficiency is profound. Optimizing lab services procurement offers healthcare organizations not just an opportunity for cost savings, but a chance to improve quality, reliability, and patient satisfaction. Even modest improvements can deliver outsized benefits across clinical and operational domains.<\/strong><\/p>\n<p>&nbsp;<\/p>\n<h2>The overlooked opportunity in lab procurement<\/h2><\/div><\/div><\/div>\n<div class='container  py-3'><div class=\"row \"><div class=\"col-lg-6\"><p>For healthcare providers, lab services are much more than a back-office function\u2014they are directly tied to clinical excellence and operational success.<\/p>\n<p>Yet, many organizations grapple with inefficiencies in procurement that inflate costs and introduce risks to patient care.<\/p><\/div>\n<div class=\"col-lg-6\"><p><strong>The stakes are high:<\/strong> reliable lab results drive medical decisions for millions of patients, while disruptions in lab services can cascade into delays, misdiagnoses, or increased operational costs. Optimizing procurement not only reduces expenses but also bolsters quality and reliability\u2014benefits that resonate throughout the organization.<\/p><\/div><\/div><\/div>\n<div id=\"challenges\" class=\"anchor\" data-name=\"Challenges\"><\/div>\n<div class='container  py-3'><div class=\"row \"><div class=\"col-lg-12\"><p>&nbsp;<\/p>\n<h2>Challenges facing lab services procurement<\/h2>\n<p>Healthcare providers operate in a complex landscape where lab services procurement must balance cost, quality, and compliance. Common challenges include:<\/p>\n<ul class=\"arrow-right-list\">\n<li class=\"fade-in-from-left\"><strong>Opaque pricing structures: <\/strong><br \/>\nProviders often struggle with unclear or inconsistent pricing for tests and services, making cost control difficult.<\/li>\n<li class=\"fade-in-from-left\"><strong>Turnaround time variability: <\/strong><br \/>\nDelays in test results can impede patient care and interrupt clinical workflows, leading to inefficiencies.<\/li>\n<li class=\"fade-in-from-left\"><strong>Supply chain vulnerabilities: <\/strong><br \/>\nFrom shortages of reagents to logistical bottlenecks, lab supply disruptions can have far-reaching impacts.<\/li>\n<li class=\"fade-in-from-left\"><strong>Vendor fragmentation: <\/strong><br \/>\nManaging multiple suppliers with different standards and contracts is resource-intensive and limits opportunities for volume-based discounts.<\/li>\n<li class=\"fade-in-from-left\"><strong>Regulatory and data compliance: <\/strong><br \/>\nEnsuring adherence to strict standards like CLIA and HIPAA, while protecting sensitive patient data, adds complexity.<\/li>\n<\/ul>\n<p>&nbsp;<\/p><\/div><\/div><\/div>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-108006 size-full\" src=\"https:\/\/www.KGM Strategy.com\/wp-content\/uploads\/2025\/01\/healthcare-strategic-solutions.jpg\" alt=\"\" width=\"2200\" height=\"869\" srcset=\"https:\/\/www.KGM Strategy.com\/wp-content\/uploads\/2025\/01\/healthcare-strategic-solutions.jpg 2200w, https:\/\/www.KGM Strategy.com\/wp-content\/uploads\/2025\/01\/healthcare-strategic-solutions-800x316.jpg 800w, https:\/\/www.KGM Strategy.com\/wp-content\/uploads\/2025\/01\/healthcare-strategic-solutions-1400x553.jpg 1400w, https:\/\/www.KGM Strategy.com\/wp-content\/uploads\/2025\/01\/healthcare-strategic-solutions-768x303.jpg 768w, https:\/\/www.KGM Strategy.com\/wp-content\/uploads\/2025\/01\/healthcare-strategic-solutions-1536x607.jpg 1536w, https:\/\/www.KGM Strategy.com\/wp-content\/uploads\/2025\/01\/healthcare-strategic-solutions-2048x809.jpg 2048w\" sizes=\"auto, (max-width: 2200px) 100vw, 2200px\" \/><\/p>\n<div class='container  py-3'><div class=\"row \"><div class=\"col-lg-12\"><p>&nbsp;<\/p>\n<div id=\"strategic-solutions\" class=\"anchor\" data-name=\"Strategic solutions\"><\/div>\n<h2>Strategic solutions: Procurement as a lever for transformation<\/h2>\n<p>Effective procurement strategies can address these pain points and unlock value for healthcare providers. By adopting targeted interventions, providers can achieve both cost savings and operational improvements. Key strategies include:<\/p><\/div><\/div><\/div>\n<div class=\"container  \" id=\"ac1\" is=\"accordion\">\n    <div class=\"row accordion\">\n        \n                    <div class=\"accordion col-12 col-md-6\">\n                <div class=\"accordion-header\" id=\"heading-ac1-0\" style=\"background-color:#a0d60a;\">\n                    <button class=\"accordion-button collapsed lightBackground\" type=\"button\" data-bs-toggle=\"collapse\" data-bs-target=\"#collapse-ac1-0\" aria-controls=\"collapse-ac1-0\" aria-expanded=\"false\" style=\"background-color:#a0d60a;\">\n                        <span class=\"accordion-button-label\">\n                             <span>Supplier consolidation and strategic sourcing<\/span>\n                        <\/span>\n                    <\/button>\n                <\/div>\n                <div id=\"collapse-ac1-0\" class=\"accordion-collapse collapse\" aria-labelledby=\"heading-ac1-0\" data-bs-parent=\"#ac1\">\n                    <div class=\"accordion-body\">\n                        <p>Partnering with fewer, high-quality providers streamlines contracts and enables volume-based discounts.<\/p>\n\n                    <\/div>\n                <\/div>\n            <\/div>\n                    <div class=\"accordion col-12 col-md-6\">\n                <div class=\"accordion-header\" id=\"heading-ac1-1\" style=\"background-color:#a0d60a;\">\n                    <button class=\"accordion-button collapsed lightBackground\" type=\"button\" data-bs-toggle=\"collapse\" data-bs-target=\"#collapse-ac1-1\" aria-controls=\"collapse-ac1-1\" aria-expanded=\"false\" style=\"background-color:#a0d60a;\">\n                        <span class=\"accordion-button-label\">\n                             <span>Negotiated service level agreements (SLAs)<\/span>\n                        <\/span>\n                    <\/button>\n                <\/div>\n                <div id=\"collapse-ac1-1\" class=\"accordion-collapse collapse\" aria-labelledby=\"heading-ac1-1\" data-bs-parent=\"#ac1\">\n                    <div class=\"accordion-body\">\n                        <p>Defining clear standards for turnaround times, quality, and penalties ensures accountability and improves vendor performance.<\/p>\n\n                    <\/div>\n                <\/div>\n            <\/div>\n                    <div class=\"accordion col-12 col-md-6\">\n                <div class=\"accordion-header\" id=\"heading-ac1-2\" style=\"background-color:#a0d60a;\">\n                    <button class=\"accordion-button collapsed lightBackground\" type=\"button\" data-bs-toggle=\"collapse\" data-bs-target=\"#collapse-ac1-2\" aria-controls=\"collapse-ac1-2\" aria-expanded=\"false\" style=\"background-color:#a0d60a;\">\n                        <span class=\"accordion-button-label\">\n                             <span>Cost transparency and benchmarking<\/span>\n                        <\/span>\n                    <\/button>\n                <\/div>\n                <div id=\"collapse-ac1-2\" class=\"accordion-collapse collapse\" aria-labelledby=\"heading-ac1-2\" data-bs-parent=\"#ac1\">\n                    <div class=\"accordion-body\">\n                        <p>Establishing standardized pricing structures through benchmarking enables better budgeting and cost management.<\/p>\n\n                    <\/div>\n                <\/div>\n            <\/div>\n                    <div class=\"accordion col-12 col-md-6\">\n                <div class=\"accordion-header\" id=\"heading-ac1-3\" style=\"background-color:#a0d60a;\">\n                    <button class=\"accordion-button collapsed lightBackground\" type=\"button\" data-bs-toggle=\"collapse\" data-bs-target=\"#collapse-ac1-3\" aria-controls=\"collapse-ac1-3\" aria-expanded=\"false\" style=\"background-color:#a0d60a;\">\n                        <span class=\"accordion-button-label\">\n                             <span>Vendor performance monitoring<\/span>\n                        <\/span>\n                    <\/button>\n                <\/div>\n                <div id=\"collapse-ac1-3\" class=\"accordion-collapse collapse\" aria-labelledby=\"heading-ac1-3\" data-bs-parent=\"#ac1\">\n                    <div class=\"accordion-body\">\n                        <p>Using key performance indicators (KPIs) such as test accuracy and turnaround time fosters continuous improvement and proactive issue resolution.<\/p>\n\n                    <\/div>\n                <\/div>\n            <\/div>\n                    <div class=\"accordion col-12 col-md-6\">\n                <div class=\"accordion-header\" id=\"heading-ac1-4\" style=\"background-color:#a0d60a;\">\n                    <button class=\"accordion-button collapsed lightBackground\" type=\"button\" data-bs-toggle=\"collapse\" data-bs-target=\"#collapse-ac1-4\" aria-controls=\"collapse-ac1-4\" aria-expanded=\"false\" style=\"background-color:#a0d60a;\">\n                        <span class=\"accordion-button-label\">\n                             <span>Strengthening supply chains<\/span>\n                        <\/span>\n                    <\/button>\n                <\/div>\n                <div id=\"collapse-ac1-4\" class=\"accordion-collapse collapse\" aria-labelledby=\"heading-ac1-4\" data-bs-parent=\"#ac1\">\n                    <div class=\"accordion-body\">\n                        <p>Dual sourcing, maintaining buffer stock and ensuring capacity at external labs can mitigate the risk of supply shortages.<\/p>\n\n                    <\/div>\n                <\/div>\n            <\/div>\n                    <div class=\"accordion col-12 col-md-6\">\n                <div class=\"accordion-header\" id=\"heading-ac1-5\" style=\"background-color:#a0d60a;\">\n                    <button class=\"accordion-button collapsed lightBackground\" type=\"button\" data-bs-toggle=\"collapse\" data-bs-target=\"#collapse-ac1-5\" aria-controls=\"collapse-ac1-5\" aria-expanded=\"false\" style=\"background-color:#a0d60a;\">\n                        <span class=\"accordion-button-label\">\n                             <span>Regulatory and data security oversight<\/span>\n                        <\/span>\n                    <\/button>\n                <\/div>\n                <div id=\"collapse-ac1-5\" class=\"accordion-collapse collapse\" aria-labelledby=\"heading-ac1-5\" data-bs-parent=\"#ac1\">\n                    <div class=\"accordion-body\">\n                        <p>Ensuring vendor compliance with regulatory standards reduces risks and protects sensitive patient data.<\/p>\n\n                    <\/div>\n                <\/div>\n            <\/div>\n            <\/div>\n<\/div>\n\n\n\n<div class='container  py-3'><div class=\"row \"><div class=\"col-lg-12\"><p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<div id=\"case-study\" class=\"anchor\" data-name=\"Case study\"><\/div>\n<h2>Success in practice: case study<\/h2>\n<p>A European healthcare provider faced mounting cost pressures in its laboratory services, with an incumbent supplier proposing significant price increases after years of stable pricing. Recognizing the need for a strategic shift, the organization initiated a competitive tender process to evaluate options for both external lab testing and point-of-care (POC) testing.<\/p><\/div><\/div><\/div>\n<div class='container  py-3'><div class=\"row \"><div class=\"col-lg-6\"><p>Through this structured process, the provider identified an alternative vendor offering a more innovative and cost-efficient commercial model. By negotiating detailed feedback loops and leveraging a &#8220;Best and Final Offer&#8221; approach, the organization achieved a cost reduction of approximately \u20ac600,000 annually, representing a savings of around 7% of its total lab services expenditure. These savings were realized through improved pricing on external lab tests and by transitioning to a model involving self-sourced reagents for POC testing, which had already proven effective at selected sites.<\/p><\/div>\n<div class=\"col-lg-6\"><p>Beyond financial savings, the new partnership brought operational efficiencies and bolstered supply chain resilience. The tender encompassed nearly 1,000 different test products, with a tailored approach ensuring the new solution integrated seamlessly into the provider&#8217;s existing workflows. This strategic move not only reduced costs but also enhanced service reliability, providing a sustainable model for future operations.<\/p><\/div><\/div><\/div>\n<div class='container  py-3'><div class=\"row \"><div class=\"col-lg-12\"><p>&nbsp;<\/p>\n<h2>Contact our experts<\/h2>\n\n    <div class=\"container authors-section fadeIn \" is=\"authors-and-partners\">\n        <div class=\"description row\">\n            <h2>\n                                                            Authors\n                                                <\/h2>\n        <\/div>\n\n        <div class=\"row\">\n                            <div class=\"mb-5 col-md-6 mb-md-0\">\n                    <div class=\"author\">\n                                                    <figure>\n                                <img loading=\"lazy\" decoding=\"async\" width=\"250\" height=\"250\" src=\"https:\/\/www.KGM Strategy.com\/wp-content\/uploads\/2022\/01\/MD_Nicolas-Willmann_350x440px-250x250.png\" class=\"img-fluid\" alt=\"\" srcset=\"https:\/\/www.KGM Strategy.com\/wp-content\/uploads\/2022\/01\/MD_Nicolas-Willmann_350x440px-250x250.png 250w, https:\/\/www.KGM Strategy.com\/wp-content\/uploads\/2022\/01\/MD_Nicolas-Willmann_350x440px-75x75.png 75w\" sizes=\"auto, (max-width: 250px) 100vw, 250px\" \/>\n                            <\/figure>\n                        \n                        <h3>Nicolas Willmann<\/h3>\n                        <p class=\"person-position\">Managing Director <\/p>\n                                                    <div class=\"short-desc\"><p>is a Managing Director at KGM Strategy in Cologne and responsible for our Healthcare business, advising clients on transformation projects, cost-down programs, and mergers &#038; acquisitions.<\/p>\n<\/div>\n                                                <div class=\"contact-information\">\n                                                                                                <a href=\"mailto:contact@kgmstrategy.com\" class=\"mail-link\">contact@kgmstrategy.com<\/a>\n                                                                                                                                                <\/div>\n                                                    <a href=\"https:\/\/www.KGM Strategy.com\/en\/insights\/optimizing-lab-services-procurement\/\" class=\"btn btn-outline-secondary text-terciary\">Contact<\/a>\n                                            <\/div>\n                <\/div>\n                            <div class=\"mb-5 col-md-6 mb-md-0\">\n                    <div class=\"author\">\n                                                    <figure>\n                                <img loading=\"lazy\" decoding=\"async\" width=\"250\" height=\"250\" src=\"https:\/\/www.KGM Strategy.com\/wp-content\/uploads\/2021\/08\/Joline_Langhans_400x400-250x250.jpg\" class=\"img-fluid\" alt=\"\" srcset=\"https:\/\/www.KGM Strategy.com\/wp-content\/uploads\/2021\/08\/Joline_Langhans_400x400-250x250.jpg 250w, https:\/\/www.KGM Strategy.com\/wp-content\/uploads\/2021\/08\/Joline_Langhans_400x400.jpg 400w\" sizes=\"auto, (max-width: 250px) 100vw, 250px\" \/>\n                            <\/figure>\n                        \n                        <h3>Joline Langhans<\/h3>\n                        <p class=\"person-position\">Principal<\/p>\n                                                    <div class=\"short-desc\"><\/div>\n                                                <div class=\"contact-information\">\n                                                                                                <a href=\"mailto:contact@kgmstrategy.com\" class=\"mail-link\">contact@kgmstrategy.com<\/a>\n                                                                                                                                                <\/div>\n                                                    <a href=\"https:\/\/www.KGM Strategy.com\/en\/insights\/optimizing-lab-services-procurement\/\" class=\"btn btn-outline-secondary text-terciary\">Contact<\/a>\n                                            <\/div>\n                <\/div>\n                    <\/div>\n    <\/div>\n\n<p>&nbsp;<\/p>\n<h2>Further insights<\/h2>\n    <section class=\"module-post-tiles\" data-module-id=\"108039\" data-modul-type=\"animated-numbers\">\n        <div class=\"container overflow-visible\">\n            \n            <div class=\"row\">\n                                                        <div class=\"overflow-hidden col-12 col-sm-6 col-xl-4\">\n                                                                    <a href=\"https:\/\/www.KGM Strategy.com\/en\/insights\/challenges-in-healthcare-services\/\" class=\"fixed-post-tile\">\n                                                    <figure class=\"fixed-post-tile-image\">\n                                                                    <img decoding=\"async\" src=\"https:\/\/www.KGM Strategy.com\/wp-content\/uploads\/2024\/09\/plgr-health-care-outsourcing-header-456x630.jpg\" loading=\"lazy\" width=\"2200\" height=\"2200\" alt=\"\" class=\"img-fluid tile-image object-fit\" \/>\n                                                            <\/figure>\n                            <div class=\"fixed-post-tile-content\">\n                                <p class=\"h3\">\n                                                                        <span class=\"fixed-post-tile-content-category\">\n                                                                                    Video\n                                                                            <\/span>\n                                    \n                                    <span class=\"d-none d-lg-block d-xl-none\">Overcoming challenges in Healthcare Services: A comprehensive...<\/span>\n                                    <span class=\"d-lg-none d-xl-block\">Overcoming challenges in Healthcare Services: A comprehensive...<\/span>\n                                <\/p>\n                                                                <button type=\"button\" class=\"btn btn-tertiary\">\n                                    Read more\n                                <\/button>\n                                                            <\/div>\n                                                <\/a>\n                                            <\/div>\n                                                        <div class=\"overflow-hidden col-12 col-sm-6 col-xl-4\">\n                                                                    <a href=\"https:\/\/www.KGM Strategy.com\/en\/insights\/demand-management-tail-end-management-optimizing-indirect-procurement\/\" class=\"fixed-post-tile\">\n                                                    <figure class=\"fixed-post-tile-image\">\n                                                        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d-xl-block\">Demand Management &amp; Tail-end Management<\/span>\n                                <\/p>\n                                                                <button type=\"button\" class=\"btn btn-tertiary\">\n                                    Read more\n                                <\/button>\n                                                            <\/div>\n                                                <\/a>\n                                            <\/div>\n                                                        <div class=\"overflow-hidden col-12 col-sm-6 col-xl-4\">\n                                                                    <a href=\"https:\/\/www.KGM Strategy.com\/en\/insights\/new-medical-devices-regulation-takes-effect\/\" class=\"fixed-post-tile\">\n                                                    <figure class=\"fixed-post-tile-image\">\n                                                                    <img decoding=\"async\" src=\"https:\/\/www.KGM Strategy.com\/wp-content\/uploads\/2021\/09\/header-med-tech-verordnung-456x480.jpg\" loading=\"lazy\" width=\"2000\" height=\"2000\" alt=\"\" class=\"img-fluid tile-image object-fit\" \/>\n                                                            <\/figure>\n                            <div class=\"fixed-post-tile-content\">\n                                <p class=\"h3\">\n                                                                        <span class=\"fixed-post-tile-content-category\">\n                                                                                    Article\n                                                                            <\/span>\n                                    \n                                    <span class=\"d-none d-lg-block d-xl-none\">The new Medical Devices Regulation takes effect<\/span>\n                                    <span class=\"d-lg-none d-xl-block\">The new Medical Devices Regulation takes effect<\/span>\n                                <\/p>\n                                                                <button type=\"button\" class=\"btn btn-tertiary\">\n                                    Read more\n                                <\/button>\n                                                            <\/div>\n                                                <\/a>\n                                            <\/div>\n                            <\/div>\n                                    <\/div>\n    <\/section>\n<\/div><\/div><\/div>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Transform lab procurement into a strategic edge: cut costs, boost quality, and elevate patient care<\/p>\n","protected":false},"author":10,"featured_media":107994,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_seopress_robots_primary_cat":"none","_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","footnotes":""},"categories":[728,711],"tags":[],"class_list":["post-107990","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-healthcare-provider","category-indirect-spend"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.KGM Strategy.com\/en\/wp-json\/wp\/v2\/posts\/107990","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.KGM Strategy.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.KGM Strategy.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.KGM Strategy.com\/en\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/www.KGM Strategy.com\/en\/wp-json\/wp\/v2\/comments?post=107990"}],"version-history":[{"count":17,"href":"https:\/\/www.KGM Strategy.com\/en\/wp-json\/wp\/v2\/posts\/107990\/revisions"}],"predecessor-version":[{"id":108677,"href":"https:\/\/www.KGM Strategy.com\/en\/wp-json\/wp\/v2\/posts\/107990\/revisions\/108677"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.KGM Strategy.com\/en\/wp-json\/wp\/v2\/media\/107994"}],"wp:attachment":[{"href":"https:\/\/www.KGM Strategy.com\/en\/wp-json\/wp\/v2\/media?parent=107990"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.KGM Strategy.com\/en\/wp-json\/wp\/v2\/categories?post=107990"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.KGM Strategy.com\/en\/wp-json\/wp\/v2\/tags?post=107990"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}