Business Continuity
Beyond Cost-Cutting: A New Playbook for Healthcare Finance
Healthcare organizations are under pressure to do more with less. Rising operational costs, increasingly complex systems, and mounting expectations for financial performance are forcing leaders to rethink how they manage spending. Yet many of the traditional strategies for reducing costs, from renegotiating supplier contracts to finding incremental savings, are delivering diminishing returns.
The challenge is no longer simply finding more opportunities to cut costs. It's building an organization that can manage spending more strategically, operate more efficiently, and sustain financial performance without compromising patient care.
For healthcare finance leaders, that requires looking beyond individual cost-saving initiatives and examining the processes, technology, and governance practices that influence spending across the organization.
In a recent episode of SAP Concur Conversations, host Jeanne Dion spoke with Chad Rodine and Gilda Ezad-Panahi of Huron Consulting Group about the changing economics of healthcare. Drawing from their expertise in supply chain strategy, financial governance, and digital spend management, they explored what it takes to build more financially resilient healthcare organizations. Here are five key takeaways from their conversation.
1. Stop treating cost reduction as a one-time initiative
Healthcare organizations have relied on traditional cost-reduction strategies for years, including renegotiating supplier contracts and finding incremental savings across purchasing categories. But those approaches are delivering diminishing returns.
“Trying to squeeze more out of the vendors and trying to reduce cost on every single little item that a hospital purchases are showing lower and lower and lower results.”
— Chad Rodine, Huron Group
Rodine argues that lasting cost transformation requires a more strategic approach—one that engages clinicians in financial decisions, uses data to better understand costs and outcomes, and makes financial discipline part of everyday operations.
Consider physician purchasing preferences: Different products or implants may come with significantly different price tags, even when they produce comparable clinical outcomes. By bringing physicians into the conversation and making cost and outcomes data more transparent, organizations can identify opportunities to reduce unnecessary variation without compromising patient care.
The same thinking applies beyond clinical purchasing. Rather than addressing costs through occasional initiatives, high-performing healthcare organizations continuously review contracts, anticipate changing needs, and evaluate opportunities for improvement.
The takeaway: Lasting cost transformation comes from embedding financial accountability into an organization's culture.
2. Bigger doesn't automatically mean more efficient
Healthcare mergers and acquisitions often come with the promise of greater scale, stronger purchasing power, and operational efficiency. But bringing organizations together doesn't automatically bring their processes, systems, or cultures into alignment.
As Rodine explains, differences in regional operations, physician preferences, purchasing contracts, and organizational cultures can make realizing the expected benefits of consolidation far more complicated than anticipated. And technology alone won't resolve those differences.
“It doesn't happen organically through the acquisition like you would expect in other industries.”
— Chad Rodine, Huron Group
Ezad-Panahi emphasizes the importance of understanding why different processes existed in the first place before attempting to standardize them. That might mean evaluating existing travel and expense policies, commercial card programs, or financial workflows to identify opportunities for improvement across the newly combined organization. The goal is to move toward a unified approach where it makes sense, while recognizing that meaningful change requires communication, collaboration, and time.
The takeaway: Scale creates the opportunity for efficiency. Coordinated processes, governance, and change management are what help organizations achieve it.
3. Standardize processes, not necessarily patient care
Standardization can be a powerful tool for improving financial visibility and reducing administrative complexity. But healthcare organizations face a unique balancing act: knowing where consistency creates value and where flexibility remains essential. On the administrative side, bringing teams together around shared expense policies, commercial card programs, and financial processes can reduce unnecessary variation.
Ezad-Panahi also points to commercial cards as a potential way to simplify certain purchasing activities. When used appropriately, cards can reduce the administrative effort associated with traditional requisition and accounts payable processes while still supporting spend visibility and compliance.
“Ultimately, what you do want to do is to have a unified approach.”
— Gilda Ezad-Panahi, Huron Group
On the clinical side, however, the decision to standardize requires a different lens. Rodine emphasizes the importance of using patient outcomes data to inform those decisions. Where clinical outcomes are comparable, organizations may have opportunities to reduce unnecessary product variation and associated costs. Where patient needs or clinical circumstances require flexibility, that variation may be justified. In both cases, the goal isn't standardization for its own sake. Instead, healthcare organizations should focus on making informed decisions where consistency creates value.
The takeaway: Strong financial governance creates consistency where it's needed and preserves flexibility where it matters.
4. AI’s fastest win in healthcare finance is already in your back office
AI is creating new possibilities for healthcare organizations, but there's a difference between experimenting with technology and realizing measurable business value. For finance teams, one promising opportunity is AI-enabled expense auditing. According to a 2026 SAP Concur survey, 87% of healthcare organizations agree their expense compliance programs have room for improvement.
Ezad-Panahi describes how AI-powered auditing tools can help organizations review expense reports and commercial card transactions more efficiently, identify potential risks, and direct human attention toward transactions that warrant closer examination. Instead of manually reviewing every transaction—or relying on limited audit samples—finance teams can use automation to support broader oversight while reducing administrative effort. But adopting AI simply because it's available isn't a strategy.
“The lowest hanging fruit, you can have a very big win very quickly.”
— Gilda Ezad-Panahi, Huron Group
Both of our experts from Huron Group emphasize the importance of identifying the business problem first, evaluating the processes behind it, and introducing technology where it can deliver meaningful improvements. For healthcare organizations navigating multiple competing priorities, that may mean starting with a specific, high-value use case rather than pursuing an organization-wide transformation all at once.
The takeaway: Start with the problem you need to solve, not the technology you want to implement.
5. Your AI strategy is only as strong as your data
Even the most sophisticated technology has limitations when the information supporting it is incomplete, inconsistent, or inaccurate. That's especially important in healthcare, where organizations manage large volumes of financial, operational, and clinical data across multiple systems.
“How accurate and clean is our data in the first place?”
— Chad Rodine, Huron Group
Rodine shares an example of hospital purchasing data: Some organizations maintain item masters containing hundreds of thousands of records, including outdated contracts and products they no longer purchase. Others maintain much smaller, more carefully managed datasets.
When organizations introduce AI or advanced analytics into those environments, the quality of the underlying data becomes critical. Poor data doesn't become more reliable simply because a sophisticated system can process it. That's why Rodine recommends prioritizing data quality as an early step toward improving spend visibility, financial governance, and AI readiness. For finance leaders wondering where to begin, reviewing and cleaning the data that feeds their existing systems may be one of the most practical improvements they can make.
The takeaway: Before asking AI to deliver better answers, make sure your organization can trust the information it's using.
From cost-cutting to a culture of continuous improvement
The future of healthcare finance won't be defined by how many expenses organizations can eliminate. It will depend on how effectively they can connect financial decisions with operational needs, clinical outcomes, and long-term priorities. That requires more than new technology or another round of budget reductions. It means building a culture of financial accountability, making spending more visible, reducing unnecessary administrative complexity, and engaging the people responsible for putting change into practice. For healthcare leaders, the opportunity is to stop thinking about cost reduction as something that happens periodically and start treating financial resilience as something the organization builds every day.
Ready to rethink the healthcare cost-cutting playbook?
What would you change first if you had just 90 days to strengthen your organization's financial performance? Join Chad Rodine and Gilda Ezad-Panahi from Huron Group, alongside host Jeanne Dion, on SAP Concur Conversations as they challenge conventional approaches to cost management, share real-world perspectives on AI and spend governance, and reveal where healthcare finance leaders can make meaningful progress today.
