Technology is one of healthcare’s fastest-growing costs. Hospitals invest substantial time and effort evaluating new technology through industry conferences, research, peer input, and competitive RFPs—but the rigor often ends upon implementation. Once installed, IT renewals are routinely budgeted with annual increases accepted as a “cost of doing business.” Without reliable IT benchmarking data, hospitals may never know how much they’re overpaying. Don’t accept your hospital’s “IT cost fate.” Ask: How much are we leaving on the table?
Benchmark Existing IT Costs Before Considering Renewal Options
The only way to know with confidence how much extra cost (savings) is hidden in renewal agreements, is to benchmark existing prices before getting a new proposal. This way you know if current prices are competitive with market rates and a reasonable starting point for a renewal negotiation, or if there are hidden costs (and savings) you can target for the new agreement.
A community hospital and Miga client recently avoided missing $1 million in savings hidden in their annual costs when renewing a license agreement for an enterprise cybersecurity. They were paying $1.35 million annually and were quoted a 13% increase to $1.52 million or $4.55 million over 3 years. While historically, the IT department didn’t benchmark supplier quotes, the new Supply Chain VP insisted and confirmed the existing pricing was highly unfavorable. The VP gave the rep one chance to submit a new, more competitive quote before the hospital pursued alternatives. In 2 days, the rep submitted a revised quote for $998,000 less (-22%). Most impactful: the new price was $474,000 lower than the current price for identical terms, turning the proposed 13% increase into an 11.8% reduction for the next three years.
Are there hidden savings in your IT Contracts?
Miga helps hospitals improve purchasing decisions, supplier management, contract performance, capital planning, and equipment lifecycle management through practical, data-driven strategies that support better operational and financial outcomes.