Key takeaways
- The U.S. has 6,093 hospitals. Of its 5,121 community hospitals, 913 are owned by state or local governments, and another 210 hospitals are federal.
- Government health buyers also include about 2,500 local health departments, 59 state and territorial health agencies, VA medical centers, Indian Health Service and tribal facilities, and state Medicaid agencies.
- Purchases run through value analysis committees, group purchasing organizations (84% of hospitals belong to one of the three largest) and, for public hospitals, board approval and bidding rules.
- New money is flowing: the $50 billion Rural Health Transformation Program funds technology, cybersecurity, telehealth and data sharing in every state.
The healthcare market
Healthcare buyers range from 900-bed academic medical centers to rural critical-access hospitals, county health departments and the state agencies that run Medicaid.
| Buyer | How many |
|---|---|
| U.S. hospitals (all types) | 6,093 |
| Community hospitals owned by state and local governments | 913 of 5,121 |
| Federal hospitals | 210 |
| Rural community hospitals | 1,797 |
| VA medical centers / outpatient sites | 170 / 1,193 |
| Indian Health Service and tribal hospitals / health centers | 44 / 391 |
| HRSA-funded health centers (FQHCs) | 1,359, serving 32.4 million patients |
| Local health departments | About 2,500 |
| State and territorial health agencies | 59 |
Public dollars run through all of it. Medicaid spending reached $931.7 billion in 2024, and 72.9 million people were enrolled in Medicaid and CHIP in July 2026. Nearly half of health center patients are covered by Medicaid or CHIP.
Who's involved
- Hospitals and health systems: CIOs and IT security leaders, chief nursing and medical officers, department and service line leaders, facilities and biomedical engineering, and supply chain or materials management directors.
- Value analysis committees, which review new products. They typically include supply chain, clinical, nursing and finance staff, and are most often led by supply chain.
- Public health departments: health officers and directors, epidemiologists, informatics and IT staff, and emergency preparedness coordinators.
- State Medicaid agencies: Medicaid directors and the teams that run Medicaid Enterprise Systems — claims, eligibility and data.
- Federal and tribal health systems: VA medical centers and networks, Indian Health Service areas, and tribally run hospitals and clinics.
How healthcare buys
- Group purchasing organizations. In 2024, 84.1% of hospitals belonged to one of the three largest GPOs — Vizient, Premier or HealthTrust. A GPO contract can open doors, but each hospital still decides what to buy.
- Value analysis. New products usually need clinical and financial sign-off from a committee before purchase.
- Board approval and bidding rules for public hospitals. County and district hospitals follow state procurement law. In Ohio, for example, county hospital boards must competitively bid purchases above a set threshold, though they can buy through nonprofit joint purchasing arrangements instead.
- Federal match for state Medicaid systems. Washington pays 90% of the cost to build Medicaid Enterprise Systems and 75% to run them, once CMS approves the state's plan. States spent about $9 billion on these systems in fiscal 2025.
- Grants. Public health departments and rural hospitals often buy with grant money, so purchases follow grant timelines and federal procurement rules.
Funding to watch
- Rural Health Transformation Program: $50 billion over fiscal 2026–2030 ($10 billion a year), with first-year awards averaging about $200 million per state. Allowed uses include technology, cybersecurity, data sharing, telehealth and AI tools.
- CDC Public Health Infrastructure Grant: more than $5 billion to 107 health departments for workforce, core capabilities and data modernization, running through November 30, 2027.
- Indian Health Service: an $8.18 billion program level in fiscal 2026, with a $9.14 billion request for 2027.
Track deadlines on our government grant deadlines page.
Where buyers gather
- HIMSS27 — April 5–8, 2027, Chicago (health IT)
- AHA Leadership Summit — July 18–20, 2027, San Diego (hospital executives)
- NACCHO360 — July 20–23, 2027, Orlando (local health departments)
More health and human services events are in our public sector conferences list.
How KSG approaches healthcare
- Define the buyer. Public hospital, rural hospital, health department, Medicaid agency or federal facility — each buys differently, so we segment first.
- Find the owner of the problem. We research the department, role and committee that owns your category, not just a generic title.
- Lead with timing. Grant awards, budget cycles, capital plans and system replacements give a credible reason to call.
- Qualify and schedule. Meetings land on your calendar with notes on budget, timeline and who else needs to be involved.
KSG has booked more than 10,000 qualified meetings for clients since 2016. See our embedded SDR teams and market intelligence services.
Sources
- American Hospital Association, Fast Facts on U.S. Hospitals, 2026
- NACCHO, 2022 National Profile of Local Health Departments
- ASTHO, About
- U.S. Department of Veterans Affairs, Veterans Health Administration
- Indian Health Service, FY 2027 Congressional Justification
- HRSA, Uniform Data System, 2024 national data
- Medicaid.gov, Medicaid and CHIP enrollment highlights
- CMS, National Health Expenditure fact sheet
- MACPAC, State Medicaid Enterprise Systems issue brief (July 2026)
- JAMA Health Forum, group purchasing organization membership (September 2026)
- Ohio Revised Code § 339.05
- HHS, CMS announces $50 billion in Rural Health Transformation awards (December 29, 2025)
- CDC, Public Health Infrastructure Grant