The following insights were drawn from Strategist Live executive networking sessions,1-on-1 interviews, and discussions from THMA’s Supply Chain Officer Forum.
To start: the latest tariff news
China Tariff Pause | US halts top-tier tariffs for 90 days (from 145% → 30%); China reciprocal relief |
Market Bounce Back | Stock markets recover post-April slump; recession fears ease |
New Trade Deals | UK deal includes steel, aluminum, and auto breaks; US-India deal nearly finalized |
Drug Tariffs and Pricing | 25% tariff on drugs + executive order to align US prices with lowest international rates |
Insight 1: Supply Chain Leaders Expect Cost Increases—But Worry About Overreaction
There’s broad agreement that new tariffs will raise supply costs, though perspectives vary on how steep or widespread the increases will be. Many feel temporarily insulated by existing GPO contracts.
Some systems are planning for cost increases totaling tens of millions annually, while others view the tariffs as an extension of inflationary trends and expect smaller, manageable impacts.
At the Supply Chain Officer Forum, urgency around tariffs has eased compared to a month ago, when announcements from the Trump administration first sparked concern. Now, leaders worry more about misallocating efforts toward worst-case scenarios. For many, the response remains business-as-usual: focus on resiliency and sourcing high-quality products at the best price.
Notably, when CFOs and industry leaders ranked proposed policies by financial impact, Medicaid reimbursement cuts topped the list. Country-specific tariffs ranked near the bottom—seen as pressure points, but not existential threats, especially for Medicaid-dependent systems.
Insight 2: Capital Projects Under Review Amid Financial Uncertainty
Health systems are scaling back capital investment plans due to growing uncertainty around policy changes—especially tariffs, Medicaid, and 340B. Strategic plans at many organizations didn’t fully account for the evolving policy landscape, forcing a more reactive approach to capital decision-making.
Faced with higher material costs from tariffs and broader fiscal uncertainty, systems are delaying or reassessing construction projects.
Insight 3: GPO Data Needs to Go Deeper
Health systems are looking to their Group Purchasing Organizations (GPOs) for help understanding tariff exposure. Current tools—like Vizient’s tariff calculator—don’t go far enough. Leaders want greater transparency, especially into indirect cost drivers like where raw materials are sourced from.
For complex items with parts from multiple vendors true tariff exposure is difficult to assess. Leaders want GPOs to better map these complexities and proactively flag risks.
Insight 4: Systems Are Pushing Back on Price Hikes
Major suppliers are already implementing price hikes, but many health systems are rejecting or delaying them. Leaders warn that locking in increases now—while tariff policies remain uncertain—could leave systems overpaying if conditions improve.
Internal review processes, like Legacy Health’s price increase help desk, are helping systems coordinate responses. While leaders aim to delay decisions in hopes of policy shifts, they recognize that some increases may be inevitable—especially with smaller vendors that lack the ability to absorb added costs.
Insight 5: Past Crises Prepared Systems for Disruption
Thanks to lessons learned during COVID-19 and natural disasters, many executives feel more prepared for possible disruptions than in previous crises.
“I think COVID taught us a lot… We became international sourcing groups because we were having to contact folks to get product directly from overseas.” – Harold Dillow, VP of Supply Chain Management at TriHealth
Some systems are expanding stockpiles of critical items, but others remain cautious after having to discard expired supplies during COVID. Larger systems are generally better equipped to stockpile, but most leaders agree that preparedness efforts must be more targeted this time.
Insight 6: Tariffs Offer a Chance to Reassess Suppliers
Some leaders see tariffs as an opportunity to challenge long-standing procurement relationships, leading to a revival of interest in smaller, agile vendors, especially those that offer custom solutions or work outside of standard GPO channels.
Supply chain teams explore other options when existing contracts disproportionately favor global suppliers.
Tariffs provide political cover to make changes with less resistance.
The end goal is a more resilient and flexible supply chain that blends the scale of GPOs with the responsiveness of niche suppliers.