Competing perspectives on artificial intelligence
INSIGHT: Opinion is divided on the value proposition of artificial intelligence in healthcare. Artificial intelligence drives innovations in cancer therapies and pandemic supply chain responses. But the counterargument is that many large investments in AI have failed to deliver measurable financial returns.
FACT: A July 2025 MIT Media Lab report found that despite $30 billion to $40 billion in enterprise spending on generative AI, 95% of organizations are seeing no business return on investment.
ADVICE: For supply chain professionals, it is important to look past overhyped expectations and focus on core functions where AI can add value, such as pricing optimization and contract management.
Providers under pressure
INSIGHT: Policy, payment, and utilization policies are placing unprecedented financial stress on hospitals. Payment challenges include shrinking reimbursements, growth in Medicare Advantage, and declining physician compensation. Utilization is climbing, but in less profitable directions.
FACT: The Advisory Board’s Nick Hula observed that the median hospital has a 7% operating margin, 37% of hospitals are operating in the red, and 34% of rural hospitals are at risk of closing.
ADVICE: For suppliers and distributors, these pressures shift expectations: hospitals now treat them as strategic partners rather than background vendors.
Federal focus on resilience
INSIGHT: HIDA and federal partners from the HHS Administration for Strategic Preparedness and Response (ASPR) continue working together to bolster the healthcare supply chain. HIDA unveiled a recent supply chain security risk assessment project they completed as part of their cooperative agreement with ASPR.
FACT: Approximately 80% of HIDA members surveyed use a supplier risk assessment questionnaire.
ACTION ITEM: Strong supplier relationships as the foundation of resilience. Strong relationships lead to detailed risk assessments to address operational, strategic, financial, geopolitical, and cybersecurity risks.
Tariffs and trade policy in healthcare
INSIGHT: Expect tariffs to continue for the foreseeable future. Even if the Supreme Court invalidates IEEPA tariffs, the Trump administration has other tools at its disposal to re-impose levies on imports.
FACT: Section 301 measures on Chinese products such as gloves and masks are set to double in January 2026.
ADVICE: To limit tariff exposure, distributors should map their entire supply chain down to raw materials and components. Keep documentation that proves country of origin, especially if Customs and Border Protection changes its definition of transshipment to levy new, punitive tariffs.
Federal procurement pathways for medical suppliers
INSIGHT: Governmental partners are promoting innovative legal tools such as Other Transaction Agreements (OTAs) to partner with non-traditional companies to accelerate the acquisition of innovative technology.
FACT: In Fiscal Year 2024, more than $18.3 billion was awarded as Other Transaction Agreements.
ACTION ITEM: Businesses seeking to work with the federal government should pair compliance with proactive engagement. Networking, persistence, and relationship-building remain critical.
Photo captions:
Wayland Coker, ASPR.
Ken Spett receives the Sasen Leadership Award from HIDA’s Matt Rowan.
Nick Hula, Advisory Board.
Jack Stephens, NDC AI Debate.
Outgoing HIDA Board chair Lisa Hohman officially handed the gavel to incoming chair Kelley Moffett of Cardinal Health.