Purchased services include any and all services that are performed by a third-party vendor rather than done by the health system itself. Examples include landscaping services, credit card processing, and transcription.
All health systems require purchased services, though few have adopted a proactive and comprehensive approach to optimizing them.
TAG offers more than just tips – we offer a working purchased-services model that encompasses data, controls, and governance. TAG’s program lets your team see the spend, enforce the price, and resolve exceptions quickly.
Request → sourcing → contract → PO → acceptance → invoice match → pay, with documented exceptions and how to resolve them.
When departments like radiology, facilities, or food services manage vendors independently, visibility and control are lost. Vendors often work directly with department heads instead of through supply chain or centralized management, creating silos and inconsistencies. Without unified oversight, hospitals risk paying for services outside contract terms and no longer under contract, missing opportunities to leverage system-wide pricing, and losing track of what services are actually performed.
In short, a vendor-centric approach shifts control away from the health system—driving inefficiency, unnecessary costs, and compliance risk.
The TAG Inc. Vendor Communication Model illustrates the difference between vendor-centric communication and system-controlled communication. In a vendor-centric model, each department (Supply Chain, Accounts Payable, End-User) interacts independently with the vendor, leading to inefficiency and lack of control. In a system-controlled model, communication flows through a structured, interconnected network across departments, ensuring alignment, transparency, and improved vendor oversight.
