How to Handle Vendor Pricing Committees

Handling Vendor Pricing

We know that vendors implement numerous strategies to increase their margins

A key area of frustration for our clients is vendor pricing committees. 

When hospitals approach vendors with a pricing request, they refer it to their pricing committee. 

This is a real frustration point for hospitals that urgently need to make cost savings. 

These cost savings have often been benchmarked by multiple sources, but hospitals are forced to wait for a review by the pricing committee. 

Often vendors won’t provide a timeline for decisions, making it difficult for hospitals to effectively manage costs. 

We advise our clients to adopt two strategies:

Keep vendors to a tight deadline. 

  • This is not only respectful to hospitals, it is the right thing to do. 
  • Those cost savings are vital to enable hospitals to serve their communities and patients. 
  • Keeping a tight deadline is an important part of this process. 

Create a formal policy and procedures. 

  • This helps to ensure that a specific timeline is followed once a pricing request is made. 
  • Hospitals must make it clear that there will be consequences for vendors failing to respond on time. 
  • This may include holding or shifting purchases. 
  • To succeed, the agreed timeline must serve both the vendor and the hospital. 
  • Vendors may need to carry out some due diligence before agreeing to this.

At VIE Healthcare®, we recommend all hospitals pay attention to this key area. 

We also encourage all hospitals to benchmark vendor agreements, even in the first year of a contract. 

If a vendor pricing committee delays cost savings by several months, it is a significant lost opportunity for hospitals. 

Hospitals need to capture cost savings as quickly as possible and need a strategy in place to achieve their goals. 

Implementing an effective contract management system can help to improve your hospital’s operational performance, minimize risks and drive margin improvement. 

Reach out at to discuss your cost savings goals and how we can support and accelerate cost savings opportunities in your organization.

Lisa Miller

Lisa Miller

Lisa Miller is a consultant, speaker, and podcast host. Her consulting firm, VIE Healthcare, has provided services to over 1,000 hospitals and organizations since 1999.

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