Top 6 Methods to Optimize Indirect Spend Efficiency
December 29, 2025 by Medigroup
Indirect spend covers everything outside of the gloves, syringes, and band-aids—all the stuff you don’t see but still have to pay for: IT services, all the office and janitorial supplies you need to keep the place together, medical equipment maintenance, staff temp agencies, marketing, facilities management, and pro services. Because these expenses are spread across departments and often managed separately, they can be a right royal pain to keep track of without a clear plan in place.
Sorting out indirect spend efficiency in healthcare is not about cutting costs wherever you can. It’s about building better purchasing habits that actually support what you do, keep you making a profit, and reduce the admin load. Below are six proven ways medical organizations can improve indirect spend management without sacrificing quality or doing something dodgy.
1. Gain Full Visibility with Focused Indirect Spend Analysis
The first step in improving indirect spend efficiency is understanding where money is actually going. Many medical practices rely on disconnected systems—billing software, accounting platforms, vendor invoices, and credit card statements—that make it difficult to see the full picture.
A structured indirect spend analysis consolidates data across all locations and departments. For healthcare organizations, this is especially important because spending often varies widely between clinics, providers, or urgent care sites, even when purchasing the same services.
By analyzing spend data, medical practices can identify:
- Duplicate vendors providing similar services
- Price inconsistencies across locations
- Unapproved or off-contract purchases
- Categories with high variability or poor cost control
This level of insight allows leadership to move from reactive cost management to proactive planning. Instead of discovering overspending after budgets are exceeded, practices can intervene early and correct inefficiencies before they impact financial performance.
2. Categorize Indirect Spend Based on Clinical and Operational Needs
Indirect spending in healthcare is not something you can say is “always the same.” A small primary care office, a multi-specialty physician group, and a high-volume urgent care center all have different operational requirements—and their indirect spend should be managed accordingly.
Effective categorization separates indirect spending into meaningful healthcare-specific categories such as:
- IT systems and cybersecurity
- Medical equipment service and maintenance
- Staffing and credentialing services
- Facilities and environmental services
- Office, exam room, and non-clinical supplies
Clear categorization allows procurement teams and administrators to focus on high-impact areas first. Categories with recurring spend or high vendor fragmentation often offer the greatest opportunity for savings and standardization.
Accurate categorization also improves budgeting and forecasting, helping practices anticipate future expenses tied to growth, new service lines, or regulatory changes.
3. Reduce Maverick Spending
Maverick spending—when staff purchase goods or services outside approved vendors or processes—is a common issue in healthcare. Busy clinical environments prioritize speed and convenience, which can lead to last-minute purchases that bypass procurement controls.
Over time, this behavior increases costs, weakens negotiating power, and introduces compliance risk. For physician practices and urgent care centers operating on thin margins, even small inefficiencies add up quickly.
Reducing maverick spend starts with clarity. Staff need easy access to approved vendors, pricing, and purchasing guidelines. When the correct option is also the easiest option, compliance improves naturally.
Standardized purchasing processes, supported by simple approval workflows and vendor lists, help ensure consistency without slowing down patient care. The goal is not to restrict clinicians but to support them with reliable, cost-effective options that align with organizational goals.
4. Consolidate Vendors and Strengthen Supplier Relationships
Healthcare organizations often work with dozens—or even hundreds—of indirect suppliers across locations. While some specialization is necessary, excessive vendor fragmentation creates inefficiency and weakens negotiating leverage.
Vendor consolidation allows medical practices to reduce administrative workload while securing better pricing and service terms. Fewer suppliers mean:
- Simplified contract management
- Improved pricing consistency
- Stronger accountability and performance tracking
This is where a group purchasing organization (GPO) can deliver significant value. MediGroup, as a GPO partner, helps medical offices, physician practices, and urgent care centers negotiate better terms with top vendors across indirect spend categories.
By leveraging collective buying power, MediGroup enables healthcare organizations to access pre-negotiated contracts, preferred pricing, and trusted suppliers—without sacrificing flexibility or autonomy. This approach allows practices to benefit from enterprise-level purchasing power while remaining focused on patient care.
5. Use Automation to Simplify Indirect Spend Management
Manual procurement processes are particularly burdensome in healthcare environments where administrative resources are already stretched thin. Paper invoices, email approvals, and spreadsheet tracking consume time that could be better spent on patient-facing activities.
Digital procurement tools help automate and streamline indirect spend management. Key benefits include:
- Faster approvals and reduced processing time
- Improved accuracy and fewer billing errors
- Real-time visibility into spending activity
- Better contract and vendor compliance
For multi-location physician groups and urgent care networks, automation also supports consistency across sites. Standardized workflows ensure that each location follows the same purchasing guidelines while still addressing local needs.
Automation doesn’t just reduce costs—it reduces friction, helping staff spend less time managing purchases and more time delivering care.
6. Align Indirect Spend Strategy With Healthcare Business Goals
Indirect spend optimization should support broader organizational priorities, whether that’s expanding services, improving patient experience, or maintaining financial stability in a challenging reimbursement environment.
Successful healthcare organizations treat procurement as a strategic function rather than a transactional one. This means involving clinical leadership, operations, and finance teams in spending decisions and setting shared performance goals.
Key metrics may include:
- Cost savings and cost avoidance
- Contract compliance rates
- Supplier performance and reliability
- Administrative efficiency improvements
By aligning indirect spend procurement strategy with long-term business goals, medical practices create a sustainable framework for growth—one that balances cost control with quality, compliance, and operational resilience.
Why Indirect Spend Efficiency Matters in Healthcare
Indirect spend may not show up on a patient’s bill, but it directly affects a healthcare organization’s financial health. Poor visibility, fragmented vendors, and inconsistent processes quietly erode margins and increase risk.
Medical offices, physician practices, and urgent care centers that invest in disciplined indirect spend management gain more than just savings. They gain control, predictability, and the ability to reinvest resources into patient care.
With the right strategy—and the right partners, such as MediGroup—healthcare organizations can secure better vendor relationships, negotiate stronger contracts, and build a procurement model that supports both clinical excellence and financial sustainability.
With nearly 25 years of experience, MediGroup leads the industry in focused group purchasing, offering modern cost-saving solutions and expertise to physician practices, surgery centers, and non-acute care facilities. Our passion for contract negotiation provides competitive pricing and flexibility, saving time and money while improving operational efficiency. Join us to optimize your purchasing power and patient care process.
Location: Chesterfield, MO
Areas of expertise: Contract negotiation, cost-saving solutions for medical facilities, building connections between practices, supply chain management.
