By Jeff Hastings, Vice President of Healthcare Sales at SIB
Healthcare has invested heavily in visibility and analytics. What’s missing is the structure to turn insight into sustained action.
After nearly 30 years in healthcare, one thing has become clear: the industry hasn’t failed to control cost, because the industry never built the system required to do it.
Healthcare has never had the luxury of excess. Margin pressure, rising costs, and the demand to do more with less have always defined the landscape. What is different now is the precision with which those pressures can be understood.
Visibility into spend has improved. Reporting is more sophisticated. Data is more accessible than at any point in the industry’s history. Most health systems can identify where money is going and where variation exists.
And yet, the financial reality remains largely unchanged. Nonprofit hospital margins continue to hover in the low single digits. Many organizations are still operating on structurally thin footing.
This is not a data problem. The tools have advanced. The outcomes have not.
Clear imaging, weak vitals
Healthcare is now exceptionally good at seeing its problems.
Patterns in spend behavior, contract performance, and cost variation are easier to identify than ever before. The industry has invested heavily in visibility, and it shows but clarity has not translated into control.
The same patterns continue to surface, quarter after quarter, year after year. The industry has become more precise in its diagnosis, but not more consistent in its outcomes. The focus now is durability, and the ability to turn insight into action that can be sustained over time.
Stretched teams, structural limits
The conversation around staffing often centers on capacity. In reality, the constraint is structural.
Spend has grown in both scale and complexity, while the models used to manage it have remained largely unchanged. A small number of individuals are often responsible for broad, highly variable categories, many of which require distinct expertise to manage effectively.
Longtail spend and purchased services are a clear example. They represent significant financial impact yet rarely operate as a central part of financial strategy. Investment continues to follow clinical priorities and immediate operational demands, while other areas are expected to function with less coordination and less continuity.
This is not a question of effort. It is a question of design.
Fragmentation is not always visible in reporting, but it is consistently felt in execution, where ownership is diffused and decisions lack consistency.
Diagnosis without ownership
The industry’s investment in analytics was grounded in a logical assumption: better information would lead to better decisions.
In many ways, that assumption held. Dashboards are more advanced. Reporting cycles are faster. Anomalies can be identified in near real time. But information does not create accountability.
Across organizations, the central challenge is not seeing the issue. It is establishing clear ownership and a consistent mechanism for addressing it.
From silos to systems
What this reveals is not a tooling gap or a talent gap, but a structural one.
In most industries, spend is anchored by a defined center of excellence, a coordinated function responsible for how cost is understood, governed, and sustained across the enterprise.
Healthcare, despite its scale and complexity, is one of the only industries operating without this foundation. Instead, spend management exists across functions, distributed, often capable, but rarely unified. Insight can be generated, but not consistently operationalized. Accountability exists, but not in a way that carries through the system.
Without a center of excellence, cost management defaults to activity instead of discipline.
Where that connective layer does exist, decision-making changes. It becomes less dependent on individual intervention and more reflective of how the system itself operates.
That is the difference between managing costs and managing a system.
When AI becomes infrastructure
AI is beginning to enter this conversation, with growing attention on the role it should play in making action more consistent, timely, and sustainable. In many organizations, AI is layered onto existing workflows, improving speed, refining forecasts, and enhancing reporting. Those gains are meaningful, but they remain constrained by the structures around them.
What’s emerging in more advanced environments is different. When intelligence connects across categories, systems, and timeframes, it stops behaving like a tool and starts functioning as infrastructure.
The six-month relapse
Healthcare has never struggled to generate savings.
Sourcing initiatives, contract renegotiations, and advisory engagements routinely deliver measurable results but those results rarely hold.
The pattern is familiar: short-term improvement followed by long-term variability. A six-month gain that slowly erodes back into baseline. This is not a reflection of the initiatives themselves. It is a reflection of the system they operate within.
When cost management is treated as a series of projects, it behaves like one, episodic, time-bound, and difficult to sustain.
Stable, not strong
There are signs of stabilization across the industry.
But stability is not strength. Rising expenses, increasing bad debt, and continued variability across organizations remain persistent realities.
What is becoming more apparent is the widening gap between systems that can sustain performance and those that cannot. That difference is not driven by size alone. It is driven by structure.
The missing layer
Healthcare is not lacking awareness, investment, or intent. It has demonstrated all three repeatedly.
What is missing is the system beneath those efforts.
More specifically, what is absent in many organizations is a true center of excellence for spend, an anchor that connects insight to action in a way that is continuous, consistent, and not dependent on individual intervention. Without that layer, even strong initiatives struggle to maintain continuity. Gains are achieved but not sustained.
Where that layer begins to take shape, cost management starts to feel fundamentally different. It becomes less reactive and more embedded. Less episodic and more continuous.
From projects to practice
This shift is not defined by a single framework, nor is it unfolding uniformly. It is emerging out of necessity, and out of the recognition that incremental improvement is no longer enough.
What takes shape in these environments is not always labeled, but it is recognizable. It looks like a center of excellence, not as a function, but as a capability. One that integrates visibility, accountability, and execution into a single operating rhythm.
And once that exists, the conversation changes.
Cost is no longer something that needs to be revisited. It becomes something that is maintained through the system itself.
Jeff Hastings is a healthcare executive with nearly 30 years of experience driving growth and operational transformation across the industry. Before joining SIB, he held senior leadership roles at Cardinal Health, Roche Diagnostics, Baxter (Hill-Rom), Owens & Minor, Vizient, and Parallon, leading national accounts and multi-billion-dollar portfolios.