A better way to purchase specialty care

Organizations make high-stakes purchasing decisions every day—across healthcare, technology, professional services, and more.

In nearly every enterprise purchasing circumstance, the standards are clear:

• The price is defined upfront
• The economics are transparent
• The financial impact can be evaluated before a decision is made

The standards for specialty care, on the other hand, have historically been unclear.

Employers often commit to care pathways, provider networks, and vendor relationships without knowing the cost of care itself—relying instead on savings calculations that are delivered months after care occurs.

As a result, these employers have started to ask what should be a simple question: What are we actually paying for each procedure? 

And, unfortunately, the answer was harder to find than expected.

This shouldn’t be the case. Think about it: “Where else would you buy something without knowing the price?”

The shift is already underway

That question is no longer theoretical. Because when healthcare costs are increasing dramatically and employers have to make difficult cost-saving decisions, “theoretical savings” don’t help.

Across the market, benefits, finance, and procurement leaders are beginning to apply the same standards to specialty care that they apply to every other category of enterprise spend.

At a minimum, that means:

• Pricing must be established before commitments are made
• Vendor economics must be fully transparent
• Financial outcomes must be understandable in advance

Because at its core, healthcare purchasing is not exempt from enterprise governance—it’s subject to it.

Why many specialty care purchasing models don’t hold up

In most specialty care arrangements today, pricing is not established up front.

Instead, value is demonstrated retrospectively. Take shared-savings models, for example. In a shared savings model, employers aren’t provided with a known price upfront—instead, savings are used to determine value after the fact, when the employer has no choice but to pay the bill because care has already been rendered.

These models can produce compelling results on paper. But they also introduce a structural challenge:

• Savings depend on how benchmarks are constructed and who sets them
• Those benchmarks are sensitive to methodological assumptions, such as the baseline used and which costs are included or excluded
• Results can be difficult to independently verify

For employers, this creates a fundamental issue: The true cost—and value—of care cannot be fully understood before a purchasing decision is made.

A new standard is emerging 

As scrutiny increases, expectations are changing.

The responsible purchasing model is emerging as the frontrunner, taking shape around a small number of clear, non-negotiable requirements:

• A known price before care occurs
• Transparent vendor economics
• Financial outcomes that can be verified

When these criteria are applied, the implications are clear. Employers are no longer asked to interpret savings after the fact. Instead, they’re able to understand the full financial impact of care before committing to it.

With the responsible purchasing model, costs can be forecasted with confidence; vendor economics can be evaluated without ambiguity; and purchasing decisions can be validated using the same standards applied enterprise-wide.

In this model, specialty care is no longer an exception to financial discipline, but a category that can be governed with clarity.

What this means for employers

This shift is about aligning specialty care with the same financial discipline applied everywhere else in the organization—for financial and governance purposes.

That means moving away from models that require estimation, approximation, and interpretation and toward models where the economics are clear, the risks are understood, and decisions can be made with confidence from the outset based on facts.

The responsible purchasing model is a return to fundamentals, and as this model continues to grow in application, the direction—and demands—of the market become increasingly clear:
The price must come first.

So, what does responsible purchasing actually look like in practice? We’ve outlined the full framework—including the economic, governance, and fiduciary implications—in our new Executive Brief, Smart Purchases Start With Knowing the Price: Why Upfront Pricing Is the Only Way to Purchase Specialty Care Responsibly.

Download the Responsible Purchasing Executive Brief.