Supplier Relationship Management (SRM) plays an important role in the reduction of costs and the optimization of performance in industrial enterprises. Despite enormous investments in innovation, the health care sector has not experienced fundamental change yet. However, increased market dynamics and the implementation of economic principles will force health service providers to optimize cost structures as well as effectiveness and efficiency of business relationships. This paper reviews the current state of the art in the field, translates and amends the current findings for the health care context, and presents a case study illustrating the impact of the implementation of SRM principles in a leading Swiss hospital.