Healthcare purchasing falls amid financial pressures

Amid rising costs and constrained margins, healthcare and life sciences organizations are pulling back on new purchasing commitments, in contrast to other major industries, according to a new report.

Although the data in the report do not establish causation, the trend suggests how healthcare organizations are responding to financial uncertainty.

“Healthcare experienced real shocks and spending slowed,” states the Q3 report of the Coupa Business Spend Index.

The report draws on purchase orders and other procurement commitments, rather than invoices or payments. The idea is to detect changes in organizational purchasing behavior before those changes are reflected in conventional financial reporting, said Kory Manley, vice president for value advisory and innovation with Coupa.

In the latest edition of one retrospective report, Kaufman Hall stated that 43% of U.S. hospitals were operating at a financial loss as of August. That’s up from roughly 33% before the COVID-19 pandemic. Expenditures on supplies and drugs were a key driver.

Healthcare diverges from other industries

Other sectors examined in the Coupa report are high tech, manufacturing, financial services and business services. Spending appeared to remain resilient throughout the economy during the first half of 2026, except for healthcare and life sciences, where purchasing commitments declined by 2.8% between February and June 2026 before staying flat in June.

Relative to a January 2022 baseline of 100, the sector’s purchasing index stood at around 92 to 93, making it the only one of the five to come in below the baseline. The other sectors maintained or increased commitments during the first half of 2026 despite market volatility and tariff-related uncertainty.

Because the index is measured in nominal dollars, the inflation-adjusted decline in purchasing commitments would be larger if prices rose during the period, Manley noted.

Pharmaceutical tariffs add uncertainty

Tariffs are a key policy that could affect the healthcare sector’s purchasing metrics.

The Trump administration’s tariff regimen is multifaceted and has gone through several iterations. In place currently are tariffs on certain imported patented pharmaceuticals and their associated ingredients.

“We think — because of the magnitude of spend in that category, especially for providers — that’s going to really cause a pretty dramatic shift further down in the growth for the sector, or increase the contraction for the sector,” Manley said.

The impact will grow if the tariff expands to generic products, he added. Per the tariff announcement, the Commerce Department is supposed to report to the White House by April 2027 on whether imports of generic pharmaceuticals and associated ingredients should be adjusted.

Although the default rate on patented products is 100%, various exceptions are available to zero out the tariffs (including for drug companies meeting conditions around production onshoring and most-favored-nation pricing) or slash them to between 10% and 15% (for products from certain countries).

Rates also can drop to 0% for some specialty drugs, subject to country-of-origin or urgent-health-need determinations. Among those categories are cell and gene therapies and plasma-derived therapies.

Other tariffs affect medical supplies and equipment

A separate tariff on certain products from China has been in place since Jan. 1, 2026, affecting some textile face masks and respirators (50% tariff), certain medical and surgical rubber gloves (100%), and covered syringes and needles (up to 100%).

Separate tariffs of 10% or 12.5% apply to most imports from 60 trading partners under a policy aimed at countries’ failure to prohibit goods produced with forced labor. Exemptions include specified products, goods subject to certain other tariffs, and qualifying imports under the U.S.-Mexico-Canada Agreement.

Sector-specific tariffs on steel, aluminum and copper products are as high as 50%, bringing implications for hospital infrastructure and medical equipment. A 25% surcharge on certain advanced computing chips and derivative products could affect some medical equipment.

The administration has not followed through on possible tariffs that would more directly apply to the healthcare sector. An investigation into imports of personal protective equipment, medical consumables and medical equipment began in September 2025.

The Commerce Department was required to submit its findings within 270 days of launching the investigation, a deadline that fell on May 30, 2026. No resulting tariffs have been announced publicly, and the department has not disclosed the investigation’s findings.

Federal funding and reimbursement policies compound pressures

Other policy developments also help explain the divergence between healthcare and other industries in the procurement report. The expiration of Affordable Care Act enhanced subsidies going into 2026 coincided with the reported decline in healthcare purchasing commitments, while slowdowns in federal research funding have affected academic medical centers and life sciences organizations.

In 2027, looming Medicaid coverage changes are expected to reduce insured-patient volumes and increase uncompensated care. The report also notes prospective decreases to Medicare physician payment, although certain specialties and services would see increases.

“We expect we’ll see that [impact] when we do our quarterly refresh over the next couple of quarters, because some of that takes a bit of time to impact pricing and the supply chain,” Manley said of the various policies.

Financial pressures are prompting organizations to consider steps such as delaying capital expenditures, renegotiating supplier agreements, consolidating purchasing and reducing discretionary spending, Manley said.

How healthcare leaders can prepare for 2027

Healthcare finance and procurement leaders should make 2027 a year of scenario planning with respect to their purchasing, Manley said, such as by mapping contract renewal dates against expected Medicaid changes.

Regarding tariffs, they should identify suppliers and products that are exposed and request country-of-origin documentation before accepting price increases. Organizations also should seek to develop alternative supply sources before disruptions occur.

“Because we know when these policy changes are coming into effect, there are certain things you can do about it, and you’ve got to get ahead of the pack if you want to secure the supply at the best possible price,” Manley said.

Advance knowledge of looming policies such as Medicaid cutbacks makes those issues distinct from, for example, the conflict in Iran, where unpredictability surrounding shipping routes was anticipated to affect the availability of products used in MRI scanners and medical supplies.