From Vendors to Visionaries: Why Health Systems Need True Strategic Partners

Providing healthcare is only going to get more challenging and much more expensive.

CMS reported that healthcare spending rose by 7.5% in 2023. That’s a big jump from the 2022 increase of 4.6%. In 2025, most industry analysts expect an even higher increase in spend.

We’re also expecting 8-9+% more spending by employers on healthcare benefits than 2024, leading to the highest cost growth in 13 years for employers.

Which means there will be even more spending by health systems and providers on labor, supply chain, drugs, and technology as systems will face increased cost pressure from their payers and employer stakeholders.

Health systems facing pressure from disruptors will likely have to spend even more to attract and retain patients and staff.

Then there’s innovation investment, technology investment including AI, care management and delivery changes to move more fully into value-based payment arrangements, and more.

All to say that the demands facing health systems are more significant than ever -- balancing innovation, growth, and cost containment in a world where margins are razor-thin, and expectations are sky-high.

Here’s the simple truth: no health system can do it all alone.

Finding the scale, resources, balance sheet, expertise, relationships, labor force, nearness to the premium dollar, technology, and research ability all require some sort of external relationship.

In this dynamic landscape, strategic partnerships aren’t just helpful—they’re essential. These collaborations offer health systems the tools, expertise, and agility they need to meet today’s challenges head-on while preparing for tomorrow’s unknowns.

Yet, there’s an important distinction to make—not all partnerships are created equal. Determining who can be your strategic partner and what a true partnership looks like is the first step for a health system executive aiming for transformation and growth.

Of course, not all partnerships are between health systems and vendors/ corporate entities.

Creating meaningful partnerships with other providers, other health systems, payers, and non-traditional organizations is also a key part of developing an ecosystem approach to partnerships.

In this article, through partnership examples and a case study, I’ll focus on partnerships with vendors and large corporate entities, but I’ll be sure to talk more about developing the right ecosystem of partnerships in my upcoming writing.

Vendor vs. Strategic Partner: Why the Difference Matters

It’s easy to confuse a vendor relationship with a strategic partnership, but the two couldn’t be more different. A vendor typically offers transactional support—selling a product or service, delivering it, and continuing in a transactional or purely contractual relationship with the health system. While this relationship can fill a specific need, it lacks the ability to deliver real long-term value and alignment with a health system’s broader goals.

A true strategic partner, on the other hand, takes a deeply collaborative approach. In healthcare, the best partnerships seem more like a marriage– something no vendor, no matter how good, can claim.

True partners don’t just deliver a solution—they immerse themselves in your challenges, co-develop strategies, and commit to shared success (and failure). The best partners work side-by-side with health systems to drive meaningful change, bringing expertise, innovation, and accountability to the table.

Moreover, a true partner shares in your risks and your reward. Your goals and their goals are intertwined.

Key traits of a strategic partner:

●?????? Shared Goals: They align their objectives with your mission and priorities.

●?????? Co-Creation: They work collaboratively and innovatively to design solutions tailored to your specific challenges and to identify your future challenges.

●?????? Long-Term Commitment: They invest in the relationship, delivering value over time and aren’t hyper-focused on short term gains for either you or themselves.

●?????? Flexibility: As you change, the partner changes to ensure that you’re both meeting your goals.

●?????? Strength and Scale: A true partner has to have the size and strength as a company to be able to consistently deliver on its promises and provide you and your health system access to scale that you couldn’t achieve on your own. This is one of the most important pieces of a visionary partnership -- your ability to gain outsized scale without losing your independence or local touch.

●?????? Measurable Impact: They prioritize outcomes, providing data and metrics to demonstrate progress.

Health systems must evaluate potential partnerships through this lens. Are you engaging with a vendor focused on short-term gains and their own goals or a true strategic partner invested in your long-term success with the scale and skin-in-the-game to try help you, your patients, and the overall healthcare ecosystem?

Economic Sustainability: Doing More with Less

Running a health system today can feel like walking a financial tightrope. Workforce shortages, rising operational costs, and reimbursement pressures are squeezing budgets tighter than ever. Even if you’re lucky to be in a part of the country where your margin pressure is no longer urgent, you likely see the need to rebase your costs before things get tough again.

Strategic partnerships can ease that burden by delivering shared resources, cutting-edge technology, and operational efficiencies without requiring massive upfront investments. A true strategic partner can also offer you their scale and breadth of relationships – something you couldn’t achieve by yourself.

Consider this: alliances with corporate partners can reduce costs by as much as 30% through initiatives like supply chain optimization, shared infrastructure, managed services, and risk-sharing agreements (Johns Hopkins Medicine Analysis, 2023).

One case comes from a large multinational corporation operating in the imaging space (amongst many others). By partnering with hospitals to optimize diagnostic imaging, they’ve helped health systems save millions—while improving accuracy and outcomes. It’s proof that partnerships can align financial sustainability with patient care excellence.

Innovation Acceleration: Staying Ahead of the Curve

Innovation isn’t optional anymore—it’s a survival tool for some and it's the special sauces to continue with success for others. But staying ahead of the technological curve is a heavy lift for any health system. Corporate partnerships can shoulder that weight, offering access to advanced tools, R&D resources, and groundbreaking solutions.

These collaborations don’t just speed up innovation; they make it possible. According to Health Affairs Journal (2022), partnerships between health systems and tech companies have cut adoption timelines for transformative innovations by up to 40%.

A case here is the Mayo Clinic and Google Health partnership. By integrating artificial intelligence into diagnostic workflows, they’ve revolutionized the speed and accuracy of patient care. It’s a model for how partnerships can deliver real, measurable value.

Case Study: Optum’s Market Performance Partnership

A standout example of a true strategic partnership is Optum’s Market Performance Partnership (MPP). Optum works hand-in-hand with health systems to address their most pressing challenges, from financial sustainability to clinical outcomes.

In one partnership, Optum collaborated with a regional health system facing declining revenues and rising operational costs. Through the MPP, Optum didn’t just provide tools or services—it embedded its team into the health system’s operations, identifying inefficiencies, streamlining processes, and co-creating strategies for sustainable growth.

The results? The health system achieved a significant reduction in operating costs while improving patient outcomes through data-driven care optimization.? For instance, this partnership reported an 18% increase in patient access collection efficiency, a 29% increase in total cash realization, and a 15% year-over-year decrease in administrative write-offs.

This wasn’t a one-off intervention—it was a long-term commitment to driving measurable, sustainable impact.

Optum’s approach exemplifies what’s possible when health systems work with a partner invested in their success, not just their business.

Transformation for Long-Term Growth

The healthcare industry is undergoing a seismic shift. From value-based care to telemedicine and population health management, success in this new era demands agility and scale.

Strategic corporate partnerships act as catalysts for this transformation, empowering health systems to adapt to rapidly changing consumer demands and technological advances.

Cleveland Clinic’s collaboration with IBM Watson Health is another example. By leveraging AI and data analytics, they’ve redefined patient care pathways—enhancing quality and reducing costs at the same time. It’s a roadmap for navigating the shift from volume to value.

Moving Forward: Partnering for Progress

The days of going it alone are over. For health systems to grow, innovate, and thrive in today’s complex environment, collaboration is key. Strategic corporate partnerships provide the resources, expertise, and agility needed to meet the moment.

These partnerships are about more than just solving immediate challenges—they’re about building a foundation for the future of healthcare. By working together, health systems and their partners can deliver better care, manage costs, and drive sustainable success.

So, the question for health system executives is this: Are you ready to embrace the kind of partnership that will help you move from striving to improve operations to truly rebasing the cost curve while experiencing transformational growth?