JHC-Jan.26

January 2026 • Vol.17 • No.1

The Hidden Opportunity Inside Purchased Services Health systems are turning to new tools and insights to control costs and standardize performance across the enterprise.

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C O N T E N TS | J A N UA RY 2 0 2 6

2 The Next Era of Healthcare Supply Chains From robotic process automation to consolidated service centers, supply chain leaders are adopting innovative strategies to cut costs and maximize impact amid mounting pressures.

4 Connected Care

Wearable devices for diabetes have revolutionized patient care delivery and clinical workflows in post-acute care settings.

10 Can Robots ‘Stick the Landing’ in Healthcare Supply Chain?

From science fiction to supply chain, robots not only have captured hearts and minds about what’s possible but also hopes and dreams for efficiency and progress as well as concerns and fears about human headcount reduction and job loss.

The Journal of Healthcare Contracting is published bi-monthly

by Share Moving Media 350 Town Center Ave, Ste. 201 Suwanee, GA 30024 Phone: 770/263-5262 FAX: 770/236-8023 e-mail: info@jhconline.com www.jhconline.com

20 The Hidden Opportunity Inside Purchased Services With billions flowing through fragmented and inconsistently managed contracts, health systems are turning to new tools and insights to control costs and standardize performance across the enterprise.

28 Why Precision Matters

Rethinking how we define and measure “savings” in healthcare contracting.

32 Why Humans Still Matter in a Robotic World Automation can optimize the routine, but creativity, judgment, and stewardship remain uniquely human responsibilities.

PUBLISHER John Pritchard

EDITOR Graham Garrison

DIRECTOR OF BUSINESS DEVELOPMENT Anna McCormick

ART DIRECTOR Brent Cashman

jpritchard@sharemovingmedia.com

amccormick@sharemovingmedia.com

ggarrison@sharemovingmedia.com

CIRCULATION Laura Gantert

lgantert@sharemovingmedia.com

bcashman@sharemovingmedia.com

The Journal of Healthcare Contracting (ISSN 1548-4165) is published bi-monthly by Share Moving Media, 350 Town Center Ave, Ste 201, Suwanee, GA 30024.

Copyright 2026 by Share Moving Media All rights reserved.

Please note: The acceptance of advertising or products mentioned by contributing authors does not constitute endorsement by the publisher.

Publisher cannot accept responsibility for the correctness of an opinion expressed by contributing authors.

The Journal of Healthcare Contracting | January 2026

1



TRENDS

The Next Era of Healthcare Supply Chains

Best practices taking hold Despite these headwinds, Hisscock sees promising innovations gaining traction.

“RPA and other forms of automation have emerged as valuable time-saving technologies,” he said. Bots are taking on non-value-added tasks so staff can shift to higher-value work.

From robotic process automation to consolidated service centers, supply chain leaders are adopting innovative strategies to cut costs and maximize impact amid mounting pressures.

AI and machine learning are also growing areas of exploration, though he cautioned that “opportunistic marketing and fledgling start-up wherewithal makes the determination between hype and value difficult.” Leading organizations are responding by developing thoughtful AI strategies and governance policies.

As health systems continue navigating financial pressure, workforce shortages, and rapid technological change, the relationship between providers and

CSCs are another emerging bright spot.

suppliers is evolving. According to Ed Hisscock, AHRMM Board Liaison and retired

While the “path to value is unclear,” Hisscock

CSCO, both sides are increasingly focused on tackling entrenched inefficiencies.

observed that their rapid expansion suggests they may become “a likely win-win value

“Many providers and suppliers

driver” for reducing trade-relationship costs.

are signaling that conversations about decreasing existing waste in the trade relationship are on the rise,” he said. Some

Momentum and new initiatives

discussions are driven by tariff pressures;

Mike Schiller, AHRMM’s executive director,

others are tied to the opening of new

said the spirit among supply chain leaders

Consolidated Service Centers (CSCs).

at the 2025 conference was unmistakable.

Either way, they are expanding beyond

“ENERGY!” he said. “This year’s

traditional sales channels to involve sup-

event showcased several new and exciting

plier Sales & Operations Planning and

initiatives.” Among them: curated panel

supply chain leaders. It’s a needed shift,

discussions from the Advisory Board, the

Hisscock noted, because “the health care

inaugural meeting of the Independent Link

trade relationship is 10% to 20% higher

Coalition to support supply chain profes-

than other industries” when measured

sionals in rural and safety-net settings, and

by Selling, General, and Administrative

the Affiliated Chapters Luncheon, which

(SG&A) expense.

highlighted strong chapter growth. The momentum is continuing post-conference,

` A worsening shortage of supply chain

with dormant chapters reactivating and

Hisscock pointed to several challenges

staff, making the need to “do more

work underway to launch new ones.

supply chain teams are navigating:

with less” even more acute.

Key pressures ahead

Planning for 2026 is already moving

` Greater pressure to reduce costs,

` Difficulty “discerning the hype vs value

especially for hospitals facing

in the proliferation of new emerging

more innovative elements expected to

Medicaid reductions and increases in

technologies like AI and RPA ... with

“deliver an impactful and distinctive

uncompensated care.

fewer resources.”

conference experience.”

2

forward, Schiller added, with even

January 2026 | The Journal of Healthcare Contracting

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

POST-ACUTE

Connected Care Wearable devices for diabetes have revolutionized patient care delivery and clinical workflows in post-acute care settings.

Optimizing workflows in post-acute and long-term care facilities is a crucial part of clinicians’ ability to provide quality patient care. With the growing adoption of technology in healthcare, wearable devices have been increasingly recognized as a valuable way to enhance clinical efficiency in a variety of post-acute settings including skilled nursing, long-term acute care hospitals (LTACHs), inpatient rehabilitation and home health care.

Wearable devices, which perform functions such as tracking a patient’s heart rate, respiratory rate, blood pressure, glucose levels, movement and more – allow for the continuous remote monitoring of critical patient health data, according to a National Library of Medicine study.

Repertoire Magazine recently spoke to Dr. Naushira Pandya, Professor and the

Chair of the Department of Geriatrics at Nova Southeastern University’s Kiran C. Patel College of Osteopathic Medicine and Director of the Geriatrics Workforce Enhancement Program, south Florida, to discuss wearable devices within post-acute care settings.

Integrating wearables

with geriatric syndromes such as fall-

Dr. Pandya, who has served on the

Post-acute care facilities often have a

ing, weight loss and incontinence,” said

Board of Directors with the Post-Acute

higher rate of patients with multiple

Dr. Pandya.

and Long-Term Care Medical Associa-

comorbidities as well as cognitive and

In addition to teaching geriatrics to

tion (PALTmed) and was its President in

psychosocial problems compared to other

medical students, fellows in Geriatrics,

2015, contributed a clinical perspective to

types of medical facilities, requiring prac-

and residents; Dr. Pandya has an active

the organization as Chair of the Diabetes

titioners to treat many patients with more

nursing home and ambulatory care prac-

Clinical Practice Guideline (CPG) for

than one health concern.

tice in Geriatrics and Endocrinology.

Long-Term Care. This is a popular guide-

“After residency, I was very interested

“My area of specialty and the area that

line and has undergone three revisions in

in endocrinology and had the opportunity

I have been most interested in for many

addition to a pocket guide and is support-

to work in a long-term care setting with

years is diabetes in older adults, and my

ed by other diabetes publications.

medically complex and challenging patients

research publications have largely been

that had chronic medical conditions along

surrounding this topic,” said Dr. Pandya.

4

“There are a broad range of definitions describing the long-term care

January 2026 | The Journal of Healthcare Contracting

setting,” says Dr. Pandya. “Focusing in on

workflows, providers can instead remotely

pump to automatically deliver insulin)

skilled nursing facility settings, patients in

monitor patient health and access real-

and even technologies that only require

these facilities are often more medically

time data instantaneously.

the patient to input meal announcements

complex with longer-stay patients needing ongoing care.”

Diabetes is common among older

Specifically, continuous glucose moni-

to allow tailoring of the mealtime insulin

toring (CGM), a wearable technology

dose, with automated control of between

worn by the patient 24 hours a day, tracks

meal glucose levels.

adults, and according to the National

a patient’s glucose (blood sugar) levels

Council on Aging, can exacerbate patients’

over time.

already existing geriatric conditions.

“Patients with diabetes are living longer and aging and are now coming into

CGM devices have the potential

skilled nursing facilities and long-term

to help practitioners in long-term care

care with their own automatic insulin

long-term care settings have diabetes,”

settings spot trends in glucose data

pumps,” said Dr. Pandya. “The question

said Dr. Pandya.

and react to changes in patients’ blood

that remains is how practitioners are go-

glucose on demand.

ing to prepare for these types of patients.

“Nearly 25% to 34% of patients in

In most facilities, staff conduct pointof-care blood glucose testing to monitor

“Studies have shown that for patients

patients’ diabetes, which involves a blood

wearing CGMs, practitioners were able to

glucose meter to check blood sugar levels

detect episodes of severe hypoglycemia

with a fingerstick blood sample. Check-

(less than 54 milligrams per deciliter) and

using these types of wearable devices

ing blood glucose levels may be required

severe hyperglycemia (over 250 milligrams

outside of health care settings – with

multiple times per day and can be time-

per deciliter), which can be very danger-

support from family members and

consuming for long-term care staff.

ous in older people – without the use

at-home care teams – and desire to con-

of CGM technology, clinicians couldn’t

tinue using them when they are admitted

detect these episodes before,” said

to a long-term care facility.

Complex patients may need their finger pricked up to three to four times a day

This is an area we must continue to be thinking about and planning for.”

Many patients may have already been

with traditional glucose monitoring and may also require multiple insulin injections, according to Dr. Pandya.

“Blood glucose testing only provides health information in the moment – we don’t know what happens to blood glucose levels between blood sugar tests.

“ The increased adoption of wearables in long-term care promotes cost-savings in terms of less equipment used, less nursing time spent at the bedside and an overall improved quality of life for patients.”

The levels may drop, or they may be quite elevated between those traditional tests,” said Dr. Pandya. “The other way to moni-

Dr. Pandya. “Tracking these highs and

For long-term care staff, the challenge

tor diabetes is through A1C testing, which

lows is important because hypoglycemia

is to learn about how these new types of

gives you a look back at blood glucose

specifically can lead to adverse clinical

devices work and how to interpret their

levels from the last three months. For

events such as falls, cognitive impair-

data for patient care decisions.

older people, this method is not always

ment, cardiac events and in extreme cases

reliable because a patient may be anemic,

seizure and death.”

has had a previous blood transfusion, or

“Different facilities have varying levels of expertise, so education and support are important for the integration of wearable

they may have other medical issues which

devices,” said Dr. Pandya. “Use of these

can affect the reliability of A1C levels.”

Prepping for wearable integration

devices requires knowledge and expertise

Most wearable devices for diabetes,

Wearables for monitoring diabetes also in-

from physicians but also nurses and nurse

however, can monitor a patient’s blood

clude more advanced technologies such as

aides and rely on staff and caregivers to

glucose levels continuously. By integrat-

insulin pumps, automated insulin delivery

actually interpret their data and make

ing wearable medical devices into clinical

(glucose sensor that communicates with

changes in the patient care regimen.”

The Journal of Healthcare Contracting | January 2026

5



POST-ACUTE

Going forward, educating long-term

“If we integrate more widespread

to note that they aren’t always covered in

care staff on the use and integration of

use of CGM in long-term care, we must

personal and clinical wearable technol-

have centralized monitoring of all the

ogy ensures that they are prepared to in-

data from all the patients using CGM,”

terpret data and incorporate it into daily

said Dr. Pandya. “I introduce CGM in the

Policy and action for wearables

care. This is consistent with recommen-

courses I teach, including the interpreta-

To support and advocate for the use of

dations made by the American Diabetes

tion of trends, what the reports mean,

wearable devices across post-acute and

Association in their 2025 Standards of

etc. This needs to be reinforced and re-

long-term care facilities, physicians and

Care guidance.

trained in residency and then throughout

advocacy organizations must come together

a physician’s career.”

to spread information on its benefits.

“The next push for clinicians in the

a subacute setting,” said Dr. Pandya.

post-acute and long-term care space is to

Additionally, insurance coverage for

“The medical community now has a

expand beyond small studies on the benefit

obtaining continuous monitoring devices

consensus that we must come together

of these types of devices into larger clini-

isn’t always consistent for each patient and

nationally to research, conduct more

cal outcome studies,” said Dr. Pandya.

facility. According to Dr. Pandya, the wide-

studies, provide clinical training to prac-

spread use of CGM and other wearable

titioners and persuade CMS to increase

technology across healthcare facilities can

coverage for these wearable devices so

Cost-savings of wearables

be patchy and dependent on each individual

that older adults can access them,” said

If physicians receive the proper educa-

facility’s resources and coverage of devices.

Dr. Pandya.

tion and training on the clinical use of wearable devices, they have the potential to be integrated at a larger scale within post-acute care workflows and lead to cost-savings.

“It saves a lot of time for a facility if nurses don’t have to perform routine

More widespread integration of wearable devices has the potential to transform patient monitoring and improve workflows, especially for the care of patients with diabetes.

finger sticks, document a patient’s blood glucose each time, and then de-

“An issue for integration of these de-

cide on the insulin dose based on what

vices is payment and something we really

able devices has the potential to trans-

orders are present,” said Dr. Pandya.

must push in the medical industry,” said

form patient monitoring and improve

“The increased adoption of wearables

Dr. Pandya. “Patients with Medicare Part B

workflows, especially for the care of

in long-term care promotes cost-sav-

or outpatients are covered and can receive

patients with diabetes.

ings in terms of less equipment used,

CGM, but in the subacute setting under

“The face of diabetes has changed,

less nursing time spent at the bedside

Part A Medicare, the cost of care varies

and the American Diabetes Association is

and an overall improved quality of life

and is covered by what Medicare pays the

making an effort to recommend wearable

for patients.”

nursing home per day, per patient.”

devices, which been shown in many stud-

Automatic insulin pumps, in addition

Insurance coverage for wearable devices

More widespread integration of wear-

ies to improve outcomes. They also have

to glucose sensors, can also help to reduce

can be inconsistent and depend on the

a strong older adult’s interest group, and

the amount of times insulin has to be

complexity of a patient’s health issues,

their focus this year is how to promote

administered to patients by nurses.

what therapies they need, and how medi-

the use of CGM in long-term care,” said

The widespread integration of wear-

cally intensive the care is that is required.

Dr. Pandya. “At PALTmed, and within the

able technology does, however, come with

“For patients who happen to already

long-term care industry, we are also trying

logistical challenges including payment

have CGM, they can bring in their sensors

to strengthen our recommendations on

and coverage issues and incorporation

and equipment into post-acute care settings

wearable devices and support them going

into existing workflows.

from the outpatient side, but it is important

forward with training and efficacy.”

6

January 2026 | The Journal of Healthcare Contracting

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

SUPPLY CHAIN

Can Robots ‘Stick the Landing’ in Healthcare Supply Chain?

From science fiction to supply chain, robots not only have captured hearts and minds about what’s possible but also hopes and dreams for efficiency and progress as well as concerns and fears about human headcount reduction and job loss.

BY R. DANA BARLOW

Editor’s note: The following is first story in a multipart series.

While Jeff Stephens, senior vice president, Supply Chain Management, Memorial Hermann Health System, certainly understood the allure and attraction of robotics in supply chain, he embraced one critical aspect before taking the plunge.

Stephens wanted his Houston-based team to control the process and their own destiny as they incorporated more than three dozen automated mobile robots (AMRs) within supply chain operations at Memorial Hermann’s consolidated service center that represents more than $1 billion in annual purchasing volume to replenish the system’s 17 hospitals.

They embarked on their robotic journey nearly three years ago as the nation emerged a bit bruised from the global pandemic. Their aims? To control costs, fortify staff and improve productivity and workflow.

“We wanted to make sure that we kept our expenses as low as we could, and when we discovered that we didn’t have to buy a robotics system, that we could lease a robotic system. That was very attractive to us,” Stephens told The Journal of Healthcare Contracting. “The cost per month, the replacement, the maintenance, battery life, all those things contributed to us wanting to seriously take a look.”

10

January 2026 | The Journal of Healthcare Contracting

After looking at several vendors and going on a number of site visits to see the AMRs in action, Stephens and his team “got a really good feel about how the technology worked and have been very pleased with how it’s worked for [Memorial Hermann],” he indicated.

“We saw the AMRs scooting around this little warehouse – it was a bait and tackle company that had like 50,000 SKUs – and they were using the robots,” Stephens recalled. “We talked to some of the folks that were doing the work, and they were also happy. We looked at the productivity reports that they had, the screens they had that showed the lines per hour by person and how they worked them. But then when they told us of the retention characteristics, and from a recruiting standpoint how attractive that was, how that gave them an advantage when they were looking for folks to come and work there and hold on to them, that sold us.”

Timing happened to be critical, too, as Memorial Hermann embarks on some massive information technology (IT) projects in 2026, including updating its

is the number of FTEs we have with the

hesitations, pitfalls and traps that temper

warehouse management system (WMS)

automation and the cost of automation.

the trendiness, and then formulate an

and enterprise-resource planning (ERP)

And here’s the total cost.’ The difference

effective business plan that can be used to

system, ensuring everything integrates or

was substantial. And so that was a pretty

persuade the C-suite to invest in the tech-

interfaces effectively.

easy conversation to have.”

nology for the benefit of the organization

To make their investment case before

Memorial Hermann’s experience

the C-suite, Stephens relied on the persua-

follows a logical pattern of how to make

siveness of simple economics.

a decision about adopting and imple-

and the patients it serves.

“We calculated how many [full-time

menting technology within a burgeoning

Why robotics?

equivalents] we would need in lieu of the

landscape of options. Start by identifying

Mike Martin, vice president, Sup-

robots, did the math showing the benefits

and determining a specific need, then

ply Chain Operations, Trinity Health,

and compared the two numbers,” he

identify and determine the appropriate

Livonia, Michigan, certainly recognizes

noted. “We found there was no compari-

technology to fulfill that need based on

the technology’s allure, which amps up

son. I shared that with my boss [system

the applications and functions provided.

the gravity of the decision, but acknowl-

CFO] and said, ‘this is how many FTEs

Charge through the hype and hyperbole

edges that you have to keep a cool head

we have to have if we don’t have the

of the technology’s promoted attributes

when marketing, media and sales heats

automation, and this is the cost, and this

and functions to understand the fears,

up the heart. How does he determine

The Journal of Healthcare Contracting | January 2026

11



SUPPLY CHAIN

whether to invest in robotic systems for

Support Services Officer. “It’s important

use in storerooms or warehouses?

that any robotics investment ties directly to

“I would say with a skeptical eye,”

a clear use case and supports our broader

Martin deadpanned. “First, you have

operational goals. We focus on areas

to understand your costs clearly for

where automation can really move the

your manual processes. You have to ask

needle — typically high-volume, repetitive

yourself, have I optimized and eliminated

or labor-intensive processes. Transporta-

as much waste as possible in my current

tion and material movement are probably

process? That becomes your baseline bud-

our biggest opportunities given the size

get to beat. That said, there are probably

and scope of our operations. Some of the

functions and tasks that will remain even if

indicators that robotics might make sense

you shift to an automated solution. What

include throughput constraints, high error

are the trade-offs, such as capital expense,

or rework rates or staffing challenges in

infrastructure required, footprint changes,

hard-to-fill or physically demanding roles.

depreciation, useful life, network require-

Ultimately, we’re looking for technology

ments, maintenance costs, software costs,

that drives efficiency and consistency,

downtime procedures, ease of implemen-

while freeing up our teams to focus on

tation, and most importantly, do you have

higher-value work.”

the throughput to warrant the ‘shiny new

“Ultimately, what are you trying to

thing?’ What are some prevalent supply

do?” he asked. “Are you doing it because

organization’s interest in automation for

chain characteristics that may indicate to

you can’t find labor in the marketplace?

their supply chain operations involves

you that your overall operation or selected

Then there has to be a payback – in this

labor costs and scarcity, according to Jim

processes within that operation may

case, it’s because we don’t have enough

Richardson, consulting director, Vizient.

need some form of robotic assistance to

people to do the work. But if labor is not

He further cites robotics becoming less

generate improvements and why? When it

the issue, then you really have to think

expensive when compared to the cost of

is repetitive or when you have workforce

about how automation is going to solve

labor as another motivating factor.

challenges that could be solved by auto-

a problem without any labor savings.

mation/the right fit?”

A lot of times you need to supplement

The driving force behind a healthcare

Richardson shared four key indicators

Supply chain executives need to

your automation with labor to make it

that may fuel investment in robotics.

understand all of the interdependen-

work. Automation can supplement labor,

` High throughput and order

cies that automation requires in any kind

especially when moving the operation

complexity: “If daily lines/orders are

of system, according to Martin. “I’m a

somewhere else where there is labor may

very high (e.g., more than 1,000 lines/

finance guy at heart, so you have to solve

not be practical or an option. If you can

day), robotics can help speed up the

for something. If you’re doing something

apply a technology that saves time and

fulfillment process, as well as

manually and then you automate it, that

travel – like walking around in the ware-

increase accuracy.”

process should be better and less expen-

house and physically searching for items,

sive. What you’ll find is that a lot of these

that technology can beneficial.”

big solutions may require more throughput than your operation has to make it

` Labor challenges: “If warehouse labor is scarce or turnover is high,

Cleveland Clinic recognizes the poten-

robotics can add more stability. Not only will less labor be required, but

tial risks and rewards, too.

worthwhile for you. But certainly, having

“We always start by looking at the

also training new labor to work with

a good handle on your manual processes

overall ROI — not just financial return,

robotics is much easier and faster. In

is a critical first step,” he continued.

but also the impact on safety, accuracy,

addition, warehouse jobs become less

and reliability,” noted Steve Downey, vice

laborious and more interesting when

president and Chief Supply Chain and

working with robots.”

The labor argument may not be as onedimensional as people think, Martin added.

12

January 2026 | The Journal of Healthcare Contracting

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SUPPLY CHAIN

` Space considerations: “Consolidated

“To me, mobile robotic technology

“You need to be handling major vol-

service centers and warehouses with

can be an advantage because it’s scalable,

ume like a very large distributor or a CSC

certain robotic systems (e.g., Autostore)

and from what I’ve seen, it’s a little easier

that covers multiple large hospital system

require much less square footage

to implement,” Martin continued. “With

operations. It can make sense, but as an

because storage is denser and takes

Bluetooth technology, for example, you

operator I worry that this automation may

greater advantage of vertical space.”

don’t have to track systems on the floor.

allow your picks per hour to be well north

` Demand variability: “Peaks (e.g.,

Geo-mapping uses sensors to move

of a hundred or maybe even two hundred

flu season, pandemics) can be more

the robot where it needs to go without

lines an hour. If [the system] goes down,

easily handled by adding more

running into or over people who may

what are the workarounds in a manual

robots (or cobots, a collaborative

be picking in an aisle and loading other

process to continue operating when

robot), than hiring and training

robots. There are also other goods-to-

you’re just not staffed to do the work?”

additional personnel.”

person options that involve high-density

Martin expresses concern about two ma-

storage, but they require significant infra-

jor issues – the downtime and maintenance.

structure in place and throughput to make

The influence of three

the investment worthwhile.”

You have to determine whether you have a tech person on staff who keep

Once supply chain establishes the need

Payback received is key, he insists.

the automation running or your need

for implementing some type of automa-

“It can be 18 months; it can be 7 to 10

to hire it out, which can get pricey,”

tion, how does the team determine the

years. You may be achieving that payback

he indicated. “That can be a challenge

specific type or system or technology that

from labor savings and other things, but

for a typical CSC that may not support

works for the organization?

you’re married to it once you commit to

enough large hospitals. It can be a tre-

it,” he added.

mendous investment. Now maybe it will

Trinity’s Martin concentrates on

Martin recognizes the attraction of

pay off if you extend beyond med/surg

three strategies:

high-density vertical automated storage

and incorporate pharmacy replenishment

` What is the easiest to implement with

and retrieval systems, such as Autostore,

or high-volume product that requires

but indicates that an organization must

short order cycle turnaround.”

the lowest complexity?

` What offers the lowest maintenance costs and downtime?

have the height and the volume to justify the technology.

Trinity operates a warehouse management system connected to a single-tier

` What requires the lowest investment,

pick module, according to Martin, who

generates the earliest payback and

describes their technology as “simple

provides the greatest impact to FTEs?

because their strategy at the time was a plug-and-play model with less integration

He then narrows the plethora of

to minimize maintenance costs.

products to one option that can satisfy all

“We have a one-tier module with a

three strategies and maximizes mobility.

power takeaway with sortation,” he ex-

“I’m somewhat familiar with [auto-

plained. “It knows what to do by scanning

mated guided vehicles] AGVs and AMRs

the label to determine which lane to send

that follow a pre-programmed track or

a product along. It handles significant lines

are given directions from ceiling sensors

per hour. We also have two vertical lift

that send signals to the unit,” he said.

modules that are like a very large carousel.

“Those are movable options. But there

We use them more for security and space

are stationary options like flow racks,

saving than for productivity enhance-

power takeaway conveyors and diverts

ment. We’re able to monitor the picks with

that allow you to release your orders to

cameras and can be very meticulous about

be processed optimally.

tracing an order that someone claims they

14

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SUPPLY CHAIN

didn’t get. The cameras will show the tote being loaded on the trailer before that trailer goes out to facilities. The track-and-trace helps manage security and workflow more than it serves as a productivity enhancement device.”

Martin notes that they have not integrated their WMS with the VLM [vertical lift module]. “But if we choose to integrate the two then the WMS releases the orders to the VLM and the VLM’s operating system would use logic to stack the shelves,” he said. “This reduces the travel required between shelves, which

investigate the options. “Find out what’s

reduces the time per pick.”

out there and ask about a thorough main-

2. “Will it integrate? Does it fit seamlessly with our existing systems and workflows?

The VLM is 32 feet high and services 88

tenance agreement and ongoing support

3. “Will it deliver measurable value? Are

shelves. “We have two of them in operation

for the software,” he recommended. “You

the benefits – efficiency, reliability,

for redundancy. In case one goes down, we

want to make sure you’ve got somebody

safety – clear and sustainable over time?

can use the other to minimize downtime

willing to assist beyond the sale. We’ve

effectively,” he said. “We use this for our

had great success with [our vendor] and

“By focusing on these questions, we

most critical high-value products.”

now it’s to the point where our team is

ensure we’re investing in solutions that

The pick module operation and the

helping them co-develop products and so-

create long-term value and align with our

VLM have been in place for about seven

lutions as we’re presenting ideas to them

operational strategy,” he added.

years. Meanwhile, the integrated WMS and

that they hadn’t thought of themselves.

delivery tracking module allows supply

We’re trying to push the technology and

Vizient’s Richardson offered his own trio

chain to track products from their storage

the capability so much that we challenge

of queries.

locations on the shelves or pallets, then

them to develop these things for us, and

1. “The organization must ask itself, what

scan to a trailer and then scan again when

they’re doing it, and then they’re able to

problem am I solving? For example,

it arrives at its ministry destination, accord-

go and market that to others.”

are you addressing future system

ing to Martin. “We do the same thing for small parcel shipments,” he added.

Cleveland Clinic’s Downey stressed

growth but lack the space to expand or

flexibility as an important element.

lack the labor resources to implement?

Memorial Hermann’s Stephens shared

“We start by looking at both our cur-

that his team primarily operates a logical

rent operational needs and where we’re

2. “How well does the solution integrate

unit of measure [LUM] warehouse, but

headed,” he said. “We want technology

with warehouse management system/

they do ship a lot of bulk, too. Most of

that can evolve with us, not just fit our

enterprise resource planning (ERP)/

their robotic automation concentrates on

current state. We also assess scalability

clinical systems? Integration with your

the LUM operation, but they’re work-

and integration – how well the system will

warehouse management system and

ing with their vendor to accommodate

connect with existing platforms and adapt

ERP are critical for an effective solution.

moving bulk, cases and pallets, which

as our processes mature.”

3. “What level of scalability and

expands their relationship beyond buyer or customer and seller.

If supply chain leaders show interest in automation and robotic technology, Stephens suggested that they simply

16

If so, robotics may be one answer.

flexibility do I need? Your selected When evaluating options, Downey advo-

technology solution should be flexible

cated asking three key questions:

and scalable to provide for future

1. “Will it scale? Can the technology

growth and change, as healthcare in

support future growth or expansion?

America is growing.

January 2026 | The Journal of Healthcare Contracting

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SUPPLY CHAIN

The ABCs of Distinguishing Robotic Options If only choosing the right robotic systems for your healthcare supply operation resembled how you choose which car to buy for your business or family use.

But it’s a bit more complicated than differentiating between electric- or gas-powered; automatic versus manual transmission; all-wheel, four-wheel, front-wheel or rear-wheel drive. While you may opt for a car based on variety of features that may best conform to or fit your business needs or family lifestyle, you’ll likely notice a bevy of additional variables that will influence your choice of robotic systems to adopt and implement based on the function and workflow you wish the robots to augment or carry out.

Some robots can be used for transporting, storing, sorting, picking, packing, loading/unloading, inventory counting, data management or cleaning and disinfecting areas. Much depends on the height, width and depth of your storeroom or warehouse as well as the volume of stock you need to manage to narrow the options of products you can deploy.

This includes throughput density and scaling (how much stock can you load and move and how quickly you can move it) and storage density and scaling (how much stock can you load on the shelves and precisely track). Last spring, executives from Gebhardt Intralogistics NA walked attendees at the ProMat show in Chicago through a historical and categorical journey through robotic development and useful applications.

You also have to determine whether your healthcare organization’s information system can accommodate the robotic system’s software. Some robots require ceiling, floor or wall sensors to navigate their pre-programmed routes on their own either in an X-Y spread or in an omnidirectional X-Y-Z spread. This might involve radiofrequency identification (RFID), LIDAR, infrared or Bluetooth.

Many robots can be pre-programmed to carry out repetitive and routine tasks automatically. Others – typically the more “human-looking” robots with arm and leg appendages or crawler belts or wheels for legs – require direct human interaction nearby to control and manage movement.

Here’s a sample of robotic options available.

AGVs (automated guided vehicles) – These are beltrunning (crawler) or wheel-based robots that use a pre-programmed fixed route to move products, based on locational sensor input. They can be flat platforms for stacking boxes and crates or a more vertical shelving style with specific cubby holes and drawers. They also can be programmed as “parent-child” shuttles whereby one of the robots will handle routes on the “X-Y” axes and the other on the “Z” axis with a human transferring loads between the two.

AMRs (autonomous mobile robots) – These are beltrunning (crawler) or wheel-based robots that use real-time mapping from locational sensors to maneuver independently through aisles and hallways, avoiding obstacles along the way – including people. These, too, can be flat platforms for stacking boxes and crates or a more vertical shelving

18

January 2026 | The Journal of Healthcare Contracting

style with specific cubby holes and drawers. They also can be programmed as “parent-child” shuttles whereby one of the robots will handle routes on the “X-Y” axes and the other on the “Z” axis with a human transferring loads between the two.

Biped/quadruped robots – These are two-legged/ armed and four-legged models that turn heads at the exhibit halls of logistics and supply chain trade shows as well as in demo videos online. The human-looking robots can be programmed to do certain repetitive tasks like picking and restocking but require humans nearby to manage their movements. The four-legged models can be used for security measures (replacing guard dogs, for example) but require humans to load compartments to carry and transport stock.

used to load and unload bulkier and heavier stock, such as cargo containers on ships and trains.

Drones – These are aerial vehicles used to move and ship products internally within a facility or externally between buildings on a campus or locally/remotely across town.

Generally, they require direct human interaction to maneuver but some can be programmed to fly autonomously. Drones also are used to perform visual inventory counts via camera recording (photos and videos) either through direct human interaction or autonomous programming.

Carousels – These are conveyor belt-driven systems that move product from place to place, requiring humans or robots to load or retrieve product at various location points.

High-density horizontal and vertical storage systems – These are massive shelving products that started as movable racks/shelves on rails for people to operate by turning a wheel to stationary shelves where pre-programmed robots move on horizontal or vertical rails to pick or replenish inventory. Typically, the aisles between these high-altitude shelves are very thin.

Cooperative robots (cobots) and crane/gantry systems – These are articulating robotic arms with pre-programmed swivel capabilities used for moving products (e.g., loading, sorting, pick-and-pack tasks) to boxes, crates, pallets, semitrailers, other robots or conveyor belts. Crane systems are overhead gantries that maneuver on a fixed course and are

Robotic process automation (RPA) – This is a software package that uses pre-programmed “bots” to carry out repetitive tasks, including data collection, management and retrieval; purchase order, invoice and receipt processing; and even front-end customer interaction. RPA will be featured in a future story within this multipart series.

The Journal of Healthcare Contracting | January 2026

19

The Hidden Opportunity Inside Purchased Services With billions flowing through fragmented and inconsistently managed contracts, health systems are turning to new tools and insights to control costs and standardize performance across the enterprise.

Purchased services may not grab headlines like breakthrough medical devices or blockbuster drugs – but for many health systems, they represent a hidden goldmine of untapped savings. During a recent webinar hosted by The Journal of Healthcare Contracting and Premier, a panel of supply chain executives dug into why this spend category has become so difficult to manage – and how data and technology are finally shedding light on it.

JHC publisher John Pritchard was joined by Sofya Mikhelson, VP of supply chain at Fairview Health Services; Chris Salada, senior director of supply chain at Kaleida Health; Anthony Montagnolo, the vice president of supply chain technology at Premier; and Fernando Rinald, the vice president of supply chain collaborative with OSF HealthCare and Pointcore.

20

THE HIDDEN OPPORTUNITY INSIDE PURCHASED SERVICES

The following are four takeaways from the webinar.

Montagnolo said, “With the at-

And given the staffing constraints all

tention on cost savings, we are seeing

hospitals face, they need the people,

some important emerging trends. Many

processes, and technology of an orga-

organizations realize there is a large

nization like Premier to support that

Purchased services is the ‘Wild West’ of purchasing

opportunity for better efficiency and

extra attention.

Because purchased services is in its

all the way up and down the leadership

own category of purchasing separated

chain. There’s also much more interest

Identify the decision makers

from life-saving medical equipment, it’s

in creating a strategic and programmatic

One of the biggest obstacles reps

become a no man’s land of sorts. Mont-

approach to building out in supply chain

encounter when approaching health

agnolo likened it to the Wild West, where

a purchased services capability that is

systems to sell is getting their foot in the

different departments are making dif-

not only focused on cost savings but

door and finding the right decision mak-

ferent purchasing decisions for different

also partnering with the stakeholders

ers for what they’re offering. Sometimes,

reasons. There’s no consistency across

to make sure that the quality stays high,

it’s hard for the health system to identify

the board, leading to high costs and

while the costs come down.”

who exactly the decision makers are as

uneven quality. That lack of consistency,

saving money in purchased services,

Montagnolo argued that purchased

well. For Chris Salada at Kaleida Health,

coupled with a lower level of oversight,

services is now on the radar of the

the biggest challenge that his team faces

makes it hard for administrators to main-

entire organization at the hospital level

is identifying who is in possession of the

tain a standard of compliance.

much more than it was a few years ago.

decision-making gavel.

“When we look at our other value analysis processes, we usually have a chief physician who’s able to make those final decisions to drive the next step,” Salada said. “I think when you look at service agreements, it’s really a group of people that need to be the decision makers – identifying gavels in different situations.”

Even after you have identified the right person to make the decisions about purchased services, they have a bit of an uphill battle when it comes to establishing agreements, especially for hospital sites in different areas. The agreements for a hospital in the city are going to be vastly different from rural hospitals.

“There are a lot of things that in every given situation, depending on the service that we’re looking at, is that we really need to just drive with multiple people around the table to be able to make the decision, from a system approach to be able to drive those savings.”

22

January 2026 | The Journal of Healthcare Contracting

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THE HIDDEN OPPORTUNITY INSIDE PURCHASED SERVICES

Data visibility is the key Fernando Rinald of OSF HealthCare and Pointcore believes in the power of data visibility. “Most of the spend or payments

Data visibility works to unlock the “secrets” of purchased services in healthcare supply chain by revealing what’s working and what isn’t.

in purchased services flow outside of the PO line level detail. It’s dark data, which

supply chain by revealing what’s working

really don’t have benchmarking or the

means that you have to go and find it

and what isn’t.

specific tools and analytics that can help.”

in different ways. Beyond data, you also

At Fairview Health Services, Mikhel-

have to identify scope. How broadly is

son and her team implement some of

the service going to be deployed across

Leverage tools and analytics

Premier’s tools to track accounts payable

the system or across our collaborative?”

Finding the right tools and using the right

spend, sort through competitive sourcing,

Rinald said.

benchmark and analytics for purchased

and get a better understanding of what the

services spend at a health system is critical

market looks like by analyzing and compar-

systems would have better leverage to

to developing a better understanding of

ing contracts with AI. These tools cover a

standardize some of their purchased ser-

the big picture. Sofya Mikhelson of Fair-

wide net for Fairview, but Mikhelson sees

vices. By introducing a basic standardiza-

view Health Services notes that the avail-

areas where health systems could use a

tion process, health systems would have

able benchmarks and analytical tools are

specific tool for capturing data and provid-

access to lower costs through purchasing

not be as comprehensive as they could be.

ing information for decision making.

power, streamline workflows across the

“What is a unit service for consul-

system, and reduce administrative and

tants?” Mikhelson said. “That’s a service.

that really get down to the line items,

financial waste across the board. Data

What about physician agreements? That’s

where we can benchmark it, when we can

visibility works to unlock the “secrets”

a service as well. There is a wide variety

understand what it is, and where we can

of purchased services in healthcare

of things we need to look at, and we

be more successful in negotiations.”

With the right data in hand, health

24

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CONTRACTING

Why Precision Matters Rethinking how we define and measure “savings” in healthcare contracting.

In healthcare supply chain, few words carry more weight, or cause more confusion, than “savings.”

Supply chain teams report them, finance teams review them, and executives depend on them to demonstrate progress against tightening margins. Yet too often, the number shown in a sourcing report doesn’t match what appears in financial statements.

The problem isn’t always that the math is wrong;

Traditional categories like cost reduction and cost

it’s that we’re speaking different languages. Sourcing

avoidance are solid and principled, but in practice they’re

calls something a savings project, finance calls it a bud-

applied inconsistently. Many projects include both ele-

get offset, and operations simply sees spend increasing.

ments, yet we tend to label each initiative as one or the

The disconnect comes not from a lack of effort or

other for simplicity’s sake. This oversimplification makes

intent, but from how we classify and communicate the

internal reporting easier, but it leaves finance without

value created.

a clear path to trace value from contract to P&L.

28

BY BRETT WEBSTER

January 2026 | The Journal of Healthcare Contracting

In a shrinking margin environment,

(price effect vs. volume effect), the story

the prior year’s total spend, which makes

where every department must defend its

becomes coherent. The math might

perfect sense analytically but no sense

impact, precision in classification is cred-

reconcile either way, but the narrative

conceptually to say that we ‘saved’ more

ibility. Without it, sourcing and finance

doesn’t. Precision, in this sense, isn’t

than we spent the prior year. Without

will continue to talk past each other,

about arriving at a different total; it’s

proper classification, sourcing looks like

undermining trust in exactly the functions

about building a bridge between the

it’s overstating results, when in reality it’s

designed to protect the organization’s

sourcing team’s activity and finance’s

simply combining different value sources

financial health.

interpretation of its impact.

into one label.

To show with simple numbers (these

In this (admittedly extreme) ex-

are illustrative only), if a facility previ-

ample, say the negotiated price went

Precision in classification: Understanding what we’re really measuring

ously bought 10,000 boxes of gloves at

from $20,000 to $10,000, and volume

$10 each ($100,000 total), and the new

increased from 100 to 500. It sounds

contract reduces price by 5% to $9.50

absurd to tell finance that our negotia-

Cost reduction and cost avoidance aren’t

per box, the projected value from the

tions ‘saved’ $500,000. Not only is that

new ideas, but the way we apply them

sourcing event is $5,000. Now suppose

more than we spent in the prior year

often muddies the conversation between

usage grows by 10% to 11,000 boxes.

($200,000), the total spend still increased

supply chain and finance. Most contract-

Spend rises to $104,500. The sourcing

to $500,000. It would be more accu-

ing projects, once implemented, contain

math still holds: we delivered $5,500 of

rate to state that we reduced costs by

elements of both – yet we typically label

total value, yet total spend went up.

$100,000 (100 * $10,000) and avoided an

each initiative as one or the other for simplicity’s sake. That simplicity might

additional $400,000 on new volume.

Here’s where precision matters. The $5,500

That’s why precision in classifica-

make internal tracking easier, but it makes

isn’t pure cost reduction but a combination:

tion is the first step toward credibility.

reconciliation harder because it obscures

` $5,000 from price reduction on the

It ensures that value is understood, not

what’s really happening.

Take a common example: sourcing

original volume (true cost reduction)

` $500 from avoided cost on the

just calculated. It’s what allows a sourcing leader to sit across from finance and say,

renegotiates an existing contract for

additional volume that would have been

“Here’s how much we reduced our price

sterile gloves achieving a 5% reduction in

more expensive under the old rate

exposure and here’s how much volume

unit price. On paper, that’s a straightfor-

(cost avoidance)

change offset it.”

This example happens to be trivial to

the conversation shifts from defending

usage rises by 10%. The total spend goes

defend. Any finance team will be able to

numbers to simply explaining impact.

up, even though the price per unit fell.

see that although the line item went up

Finance retains visibility into the opera-

Did we “save” money? Yes, and no.

this was due to volume and there was still

tional realities behind spend, and sourc-

There’s a reduction component tied

ward cost reduction. But clinical activity

When we can tell that story clearly,

increases the following year, and glove

real value in the amount of $5,500. So by

ing gets credit for the full scope of value

to the lower unit price, and an avoid-

labeling $5,500 as ‘cost reduction’ or sim-

created, not just the portion that lowers

ance component tied to what didn’t

ply ‘savings’, typically we will not receive

the ledger.

escalate further because of that lower

any pushback.

rate. The total spend tells one story, but

However, at scale sometimes the

the classification of value tells another.

logic breaks down, and this is where

When both effects are lumped together

understanding the precision can help.

Why projects don’t reconcile cleanly to the P&L

as “savings,” finance sees an expense

Imagine a high-cost implant with large

If the concept seems straightforward,

line that increases due to volume and

volume growth. Negotiated prices go

the practice rarely is. The glove example

questions how much of the reported

down 50% while volume surges up 400%.

shows how a project can be classified

savings is ‘real’. When they’re separated

The arithmetic “savings” might exceed

incorrectly even when the math itself

The Journal of Healthcare Contracting | January 2026

29



CONTRACTING

is accurate. In that case, the totals may

behavior falls short, reported savings

inadvertently assume more benefit than

theoretically reconcile but the interpreta-

exceed what finance can validate.

remains to be captured.

tion doesn’t. Precision didn’t change the arithmetic; it changed the story. But that

4 T iming Mismatch

can’t always be said.

Procurement often books savings when

didn’t alter the total value, but merely

In many sourcing projects, the

the contract is signed; finance recognizes

clarified where it came from. But in the

lack of precision can not only blur

them only when the spend actually occurs.

real world, many of the above factors do

understanding but also may change

Even accurate projections can appear

alter both perception and the underlying

the result entirely. The moment we

“missing” on the ledger because the

math. In future articles, we’ll examine

apply the wrong baseline, assume

realization window spans fiscal periods.

how some of these choices can change

In this article’s examples, precision

full compliance, or ignore timing and utilization shifts, the numbers themselves diverge. What begins as a small

the outcome, and what the best practice is 5 C onversion Volume

to determine full value as well as maintain the ability to reconcile.

and Utilization Effects

modeling shortcut compounds into

Changes in clinical activity, procedure

major discrepancies between sourcing

counts, or SKU-level utilization can over-

projections and financial reality.

whelm the contract’s pricing effect during

The path forward

conversions. Without isolating those

True alignment begins with shared

Several common pitfalls drive this gap:

drivers, the underlying sourcing impact

language. Instead of collapsing complex

1 S ingle-Label Reporting

remains obscured.

initiatives into “savings” versus “cost

Assigning every initiative to one category (either “savings” or “avoidance”) hides the blended nature of most projects. As

avoidance,” classify each component 6 M argin Impact and

according to what it actually represents:

Expense Shifting

price effect, volume effect, utilization

seen earlier, this may not alter the math

Even perfectly calculated sourcing savings

change, or avoided escalation. Even

but can distort how results are interpreted

can shift expenses elsewhere in the system

a modest increase in precision can

and communicated.

or change gross margin mix creating

dramatically improve the quality of

confusion about whether we reduced cost

financial dialogue.

2 B aseline Ambiguity

or simply moved it.

Precision doesn’t slow us down but

Whether a team uses last price paid,

instead it should speed up trust. When

weighted average, or another bench-

7 M id-Year Impacts

contracting and finance speak in compat-

mark, inconsistent baselines can

Sourcing calendars do not align neatly

ible terms, the organization gains a clearer

produce materially different outcomes.

with fiscal calendars. Contracts are

picture of where value is being created,

Two analysts can work from the same

negotiated and implemented through-

where it’s shifting, and how future strate-

data and end up with different savings

out the year, which can complicate how

gies should evolve. In an industry defined

totals simply because they started from

savings are reflected in future budgets.

by both cost pressure and accountability,

different reference points.

When a new agreement is signed mid-

precision offers credibility.

year, part of its benefit is realized in 3 A ssumption Overreach

the current period, even though the full

Next in this series: a closer look at why

Modeling savings with 100% contract

annualized impact is often projected

differing baselining methods such as

compliance or immediate adoption

into the next. Without recognizing this

Weighted Average vs. Last Price Paid can

inflates projections. When real-world

timing overlap, budget adjustments may

also hide true value and reconcilability.

Brett J. Webster is a healthcare supply chain analytics leader at MemorialCare with a background in finance and quantitative analysis.

His work involves translating complex sourcing activity into clear, defensible financial outcomes that strengthen alignment between supply chain and finance teams.

30

January 2026 | The Journal of Healthcare Contracting

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

SHELF CONFIDENCE

Why Humans Still Matter in a Robotic World Automation can optimize the routine, but creativity, judgment, and stewardship remain uniquely human responsibilities.

BY R. DANA BARLOW

Driving past the local YMCA frequently during the last few decades unearthed a curious trend if you watched closely enough. The facility showcased through a curved wall of floor-to-ceiling windows its fitness center and four-lane track to pedestrian and vehicular traffic outside.

32

January 2026 | The Journal of Healthcare Contracting

During the year-end post-holiday

employee layoffs in the double-digit per-

“We’re not going to see an exclusively robotic

cool-down and through the first month

centage range. They give a variety of rea-

factory, but we will see the optimum use of robots

of the year the fitness center bustled

sons that sound logical but feel nebulous:

and people. … Robots allow our employees to

with patrons using the exercise equip-

Reducing costs (to pay for the new tech

work safely, faster and at less cost.”

ment and hustling along the indoor track

perhaps?), recognizing process efficiencies,

– Dennis Muilenburg, former CEO, Boeing

– at least as much as you could through

that when fused together retain revenues,

the fogged windows.

if not profits. They need to justify and

1. Humans conceive, design, produce and

pinpoint value from this new investment.

distribute the technology. For example,

In a world of technological advance-

AI may be “smart,” but it just curates

By mid-February, however, a smidge past Valentine’s Day, the hustle and bustle disappeared. You saw unoccupied

ments via computers and robots that

content using logic-based algorithms

exercise machines and a vacant track

promise effectiveness, efficiency and pros-

that it repurposes to satisfy a human

through clear windows. This happened

perity, humans surprisingly and essentially

(or even machine) query. AI cannot

every year. Like clockwork.

still maintain value.

conceive anything from scratch because

Patrons either achieved their fitness

The popular phrase, “Which came

it lacks creative generation. AI can mimic

goals (e.g., building or toning muscles,

first, the chicken or the egg?” causality

an artistic, musical, speaking or writing

losing weight, etc.), found another way to

conundrum has never appeared so quaint

style based on programming, prompting

occupy their time or simply grew bored

when sidled up to its technocentric suc-

or significant research, but it cannot

with the tedium and indifferent to their

cessor, “Which came first, the human

originate a new style based on organic

anticipated outcomes.

This seems like a human’s relationship with technology in general, automation in particular, computer or robotic systems.

“Ultimately, our ideas about robots are not about robots. The robot is a canvas onto which we project our hopes and our dreams and our fears … they become embodiments of those hopes and

Automation technology like computers and robots are designed to handle the routine stuff that can slow us down so that we can speed up in many other areas. Sometimes, however, the repetitive tedium encourages our minds to wander, which can spark organic intellectual creativity.

dreams and fears.” – Hank Green, author/ novelist, An Absolutely Remarkable Thing or the robot?” Divorcing all religious

ingenuity. For example, AI or even a

and science fiction undertones, it seems

robot can beat you at chess but not at

Pairing humans with technology

logical, if not plausible, to think that a

Mad Libs, which would make absolutely

Ask anyone in supply chain about the

chicken must lay an egg (and that egg

no sense to the logical algorithm because

feasibility of bringing in an advanced

either produces another chicken or a

it doesn’t understand the humor …

computer system or the latest robotic

considerable portion of a Denny’s Grand

unless it’s the Robin Williams character

technology and the first question he or

Slam breakfast or McDonald’s McMuffin)

in the 1999 film “Bicentennial Man.”

she likely will level is, “How does this

first. Similarly, a human must conceive,

affect my job?” What they really mean is,

design, manufacture and program (and

“Will this cost me my job?”

then market, sell and deliver) a robot.

We’ve witnessed plenty of examples

2. Humans maintain and repair the technology. At least until humans craft a program or robot to repair itself or others.

from some of the world’s largest and

“Robots are good at things that are structured.”

wealthiest corporations implementing

– Vijay Kumar, Dean, University of

some new technology in their front office,

Pennsylvania School of Engineering and

the technology. This includes the

back office or warehouse, followed by

Applied Science

computer and the robot.

The Journal of Healthcare Contracting | January 2026

3. Humans determine how to program

33



SHELF CONFIDENCE

4. Humans conjure up how to improve

and professor and chair of the industrial

won’t get annoyed when their power (e.g.,

the technology to carry out tasks and

engineering and operations research

battery, electricity, fuel, etc.) runs out or

meet desired needs. They also create

department at the University of Califor-

short circuits.

how to replace that technology with

nia, Berkeley, and leader of UC Berkeley

something brand new.

Automation Sciences Lab

But humans must retain control as effective stewards of this technology, which represents a useful tool to free up

“Hollywood likes to imagine robots as mechani-

the creative ideation and vision that only

standards for using the technology –

cal copies of ourselves – which is a terrible idea.”

humans can accomplish and replicate.

including (hopefully) when to shut it

– Colin Angle, CEO, iRobot

5. Humans also establish rules and

down or turn it off.

“Robots are going to look and be designed Automation technology like

to meet the function they’re supposed to

Whether computers or robots, this

computers and robots are designed to

perform. People will still name them and

technology is designed to augment hu-

handle the routine stuff that can slow

connect with them. … In the end, robots do

mans, not necessarily replace them. (Yes,

us down so that we can speed up in

things that people can do. So there is a cost

you read that “necessarily” legal loophole

many other areas. Sometimes, how-

above which you can hire somebody to do it,

right.) If anything, they are – and should

ever, the repetitive tedium encourages

and that bounds the opportunity.”

be – extensions of our selves at work and

our minds to wander, which can spark

– Colin Angle, CEO, iRobot

potentially in life.

organic intellectual creativity.

“We’re fascinated with robots because they are

bored, mentally burnt out or physically

so many human problems. Except for all

reflections of ourselves.” – Ken Goldberg,

fatigued from doing endlessly mind-

the ones that they cause.” – Hank Green,

artist, writer, inventor and researcher,

numbing repetitive tasks. And they likely

author/novelist, An Absolutely

“Robots have solved and will continue to solve

Computers and robots can’t grow

Remarkable Thing All in all, let the technology collect data and develop logical conclusions; let the robots sort, pick, pack, move and manufacture products. Let the humans determine how to analyze, manipulate and transform the data into workable concepts; let the humans determine how to use, toss out, inspect and innovate products … with technological assistance, of course.

What’s the underlying threat of any product or technology? Obsolescence.

Case in point, late last year that local YMCA was shuttered (after “merging” with another location several suburbs over), torn down and replaced by a townhouse complex.

R. Dana Barlow serves as a senior writer and columnist for The Journal of Healthcare Contracting. Barlow has nearly four decades of journalistic experience and has covered healthcare supply chain issues for more than 30 years. He can be reached at rickdanabarlow@wingfootmedia.biz.

34

January 2026 | The Journal of Healthcare Contracting

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