10 Ways Healthcare Supply Chain Leaders Can Mitigate Tariff Challenges

As global trade dynamics continue to evolve, healthcare organizations are feeling the impact of rising tariffs on medical devices, equipment, and supplies. It’s clear that these increased tariffs are expected to strain the healthcare supply chain, affecting costs and availability of medical supplies and devices, and they leave leaders looking for solutions.

To maintain high-quality patient care while navigating these challenges, healthcare organizations must take proactive steps to assess and mitigate the impact of tariffs. Below, we explore 10 ways healthcare providers can minimize risks and build a more resilient supply chain.

1. Identify Cost-Effective Functional Equivalents to Offset Rising Costs

When tariffs increase the price of certain medical products, healthcare providers should explore functional equivalent clinically acceptable alternatives that meet the same performance and safety standards. These substitutes can help reduce costs without compromising quality or patient outcomes.

To make informed decisions, leverage data-driven tools and clinical evidence to assess equivalent products before integrating them into your supply chain. As part of vetting equivalent products, make sure to validate vendor claims. While many vendors strive to provide reliable and truthful information, there may be instances when claims are exaggerated or not fully substantiated.

2. Diversify Supplier Base to Reduce Dependence on Single Sources

Relying heavily on a single supplier can leave healthcare providers vulnerable to disruptions caused by tariffs. By diversifying their supplier base, organizations can reduce dependence on one source and increase their ability to pivot quickly if tariffs impact pricing or availability.

Establishing relationships with multiple suppliers, including both domestic and international vendors, adds flexibility to procurement strategies. This diversification ensures that organizations have backup options and can respond swiftly to market changes.

3. Monitor Supply Chain Risks with Real-Time Recall Notifications

Healthcare organizations need to stay informed about potential disruptions caused by tariffs, supply shortages, or recalls. Implementing a supply chain monitoring system that provides real-time recall alert notifications can help procurement teams respond quickly and minimize disruptions.

It’s crucial not only to receive hazard and alert notifications promptly, but also to ensure they reach the right people quickly. A supply chain monitoring system with a workflow component can streamline this process. The more direct and explicit your notifications, the faster the right individuals can respond—ultimately benefiting your patients, staff, and organization.

4. Conduct Supplier Vetting and Contract Reviews

As healthcare providers shift procurement strategies to offset tariff costs, it’s crucial to thoroughly vet new suppliers and review contracts to ensure compliance with quality standards and regulatory requirements. A rigorous supplier assessment process can help mitigate risks associated with introducing new products.

Develop a standardized vetting process that includes quality checks, regulatory compliance reviews, and performance benchmarks. This process reduces the likelihood of procurement errors and ensures that new suppliers align with organizational standards.

5. Optimize Inventory Management to Prevent Shortages

Tariffs can contribute to longer lead times and unpredictable supply chain delays. Implementing inventory management best practices ensures that essential products remain available during periods of uncertainty. By maintaining adequate safety stock and leveraging demand forecasting, organizations can reduce the risk of shortages.

Consider adopting automated inventory management solutions that offer predictive analytics to monitor stock levels and reduce waste. These tools can help identify potential shortages early and enable better decision-making to maintain supply continuity.

6. Negotiate Long-Term Contracts with Key Suppliers

Negotiating long-term contracts with trusted suppliers can help stabilize pricing and reduce the impact of future tariff increases. Establishing multi-year agreements with volume-based pricing can lock in rates and provide cost certainty over time.

To safeguard against market fluctuations, include flexibility clauses that allow for renegotiation if unforeseen events, such as significant tariff changes, affect market conditions. This approach helps organizations maintain budget stability while ensuring supplier reliability.

7. Explore Domestic Sourcing Options to Reduce Tariff Exposure

To minimize the impact of tariffs on imported goods, healthcare providers can explore domestic sourcing options for critical medical devices and supplies. By shifting procurement to domestic manufacturers, organizations can avoid tariffs while supporting local suppliers and reducing supply chain vulnerabilities.

Before making a transition, conduct a cost-benefit analysis to assess whether domestic suppliers can meet quality, volume, and price requirements. Evaluating these factors ensures that domestic sourcing aligns with clinical and operational goals.

8. Stay Informed and Engage in Advocacy Efforts

Healthcare organizations should stay informed about changes to trade policies and tariffs that may impact their supply chain. Engaging in advocacy efforts with industry associations and policymakers can influence decision-making and promote policies that protect the healthcare sector from unnecessary cost burdens.

Joining professional organizations that actively advocate for healthcare interests can provide valuable insights and offer a platform for influencing trade policies. For example: Join an advocacy group that works with policymakers to secure exemptions for critical medical products. Participation in policy discussions helps healthcare providers have a voice in shaping regulatory outcomes.

9. Assess Tariff Exposure Using the Harmonized Tariff Schedule (HTS)

To effectively mitigate tariff challenges, healthcare organizations must first understand their tariff exposure by analyzing which medical products are affected and how costs will be impacted. Using the HTS, organizations can classify imported goods, determine applicable duty rates, and assess secondary cost impacts such as freight, storage, and labor. This insight allows procurement teams to anticipate cost fluctuations and adjust sourcing strategies accordingly.

By regularly reviewing the HTS and working with trade compliance experts, healthcare providers can identify opportunities to minimize costs—whether through alternative sourcing, duty exemptions, or leveraging trade agreements. A clear understanding of tariff exposure helps organizations make data-driven procurement decisions while maintaining budget stability and high-quality patient care.

10. Use Predictive Replacement Planning to Optimize Capital Spending

Healthcare leaders can mitigate tariff-related cost increases by implementing predictive replacement planning, which helps them proactively manage capital equipment purchases over the long term. By developing a 10-year road map, organizations can identify which medical devices and equipment need replacement and when, allowing them to plan purchases strategically rather than reactively. This approach ensures that capital spending is aligned with clinical and operational needs while avoiding unexpected costs.

A well-structured capital equipment road map can also be shared with device manufacturers to lock in pricing and secure long-term agreements, reducing exposure to market fluctuations and tariff-driven price hikes. In return, manufacturers gain commitment from healthcare providers, ensuring a stable supply chain and reducing procurement risks. By leveraging predictive replacement planning, healthcare organizations can stabilize costs, avoid last-minute purchases at inflated prices, and improve financial forecasting for major equipment investments.

A Strategic Approach to Mitigating Tariff Risks

Navigating the challenges posed by tariffs requires a proactive and multifaceted approach. By identifying functional equivalents, diversifying suppliers, monitoring risks, and optimizing procurement practices, healthcare providers can build a more resilient supply chain that safeguards patient care and minimizes financial impact.

Ready to strengthen your supply chain strategy? Learn how ECRI can help you mitigate tariff challenges and enhance operational efficiency.