Hospitals should plan for rising supply chain costs in 2027, with prices in indirect spending categories such as IT, construction and even food projected to rise even faster than drug prices, Vizient warned in its latest forecast report.
Vizient’s latest biannual report forecasts price inflation across the supply chain to be 3.39% in 2027, an increase of 0.61 percentage points compared to the forecast for the second half of 2026 and 12 months published in February.
Jeff King, director of research and intelligence at Vizient, told Fierce Healthcare that the main drivers are the demand for AI and the rising costs of logistics and energy being felt around the world.
Expected drug inflation, an area of frequent concern due to its size and visibility of high drug prices, is 3.54%, up 0.7 percentage points from six months ago, driven by rising costs of outpatient care.
But it is non-pharmacy prices that are rising faster, with indirect spending and purchased services expected to hit an inflation rate of 4.73% in 2027, up 0.88 percentage points from six months ago. This is primarily due to technology needs and broader macroeconomic trends that impact costs, Vizient said.
The former includes an expected inflation rate of 6.29% for IT hardware/software, which is further broken down to include an 8.5% increase in IT security, an 8% increase in IT hardware and accessories, and a 7.5% increase in IT software and licenses.
“AI is driving demand on the computing infrastructure that powers modern technology, from data storage to servers and IT services,” King explained. “As demand increases across industries, healthcare organizations compete for many of the same resources, driving up the cost of technology and medical equipment and increasing the need for thoughtful investment planning.”
Capital equipment prices for medical devices and non-medical devices are projected to rise by 3.43% and 4.15%, respectively, with the former primarily driven by purchases of patient monitoring technology, Vizient noted.
Purchasing such technology “requires close collaboration between IT, supply chain, finance, and operations leaders to ensure long-term cost predictability and sustained organizational value,” Vizient said in the report.
Technology purchases join other indirect spending categories in being susceptible to broader market trends, Bizient noted. For example, the construction industry’s expected inflation rate of 4.7% means that organizations need to place greater emphasis on procurement strategies in their strategic project planning.
Utility costs such as water services (4.45%) and electricity (3.9%) are expected to rise, not to mention overall food costs (4.16%), which will similarly contribute to hospital cost pressures.
“Rising ocean freight rates, strong truckload prices and expensive diesel are increasing manufacturing, importing and distribution costs, driving up logistics and energy costs,” King said. “Resin prices remain volatile due to petroleum feedstock and energy costs, while steel and aluminum prices remain under upward pressure from tariffs and supply constraints, driving up costs for device components, packaging and capital equipment.”
These trends, and their projected impact on prices, reinforce “the need for stronger governance of purchased services, technology investments, capital plans, and long-term infrastructure planning, especially as organizations balance continued margin pressures and modernization efforts,” Vizient advised in the report.
That doesn’t mean inflation in drug spending isn’t still an important consideration. The 2027 price inflation forecast of 3.54% includes a projected 3.64% increase in outpatient drugs and a projected 2.85% increase in acute care drugs.
Specialty and complex drugs are expected to increase by 4.04%, led by cancer drugs (25.59% of pharmacy spending, 4.41% expected cost increase) and autoimmune/anti-inflammatory drugs (23.39% of pharmacy spending, 4.1% expected cost increase). Spending on self-administered drugs is also expected to increase by 3.62%, up from 2.43% six months ago, thanks in part to GLP-1.
In this regard, Vizient noted that increased usage may pose a greater financial threat than rising prices, and advised hospitals to review their contracts (services provided by Vizient) and remain vigilant about distributing high-priced medicines through specialized distribution channels.
“Organizations that treat pharmacy as an integrated component of their growth, access, and financial plans are well-positioned to manage both costs and outcomes in this evolving healthcare environment,” the report says.
Vizient noted that the expected price hikes come as hospitals’ financial conditions tighten, with margins already lagging into 2025 ahead of reimbursement headwinds and broader changes in utilization. As spending decisions within discrete cost categories, such as technology, increasingly impact how care is actually delivered, “the interconnected nature of these decisions should change the way leaders approach non-payroll planning,” the report advises.
“While price changes remain important, it is no longer sufficient to assess inflation in isolation. Price increases in one category may be manageable on their own, but when combined with increased production, shifts in medical practice, payer management, supply disruptions, infrastructure needs, etc., the financial impact becomes even greater,” Vizient wrote.
