Hospital inpatient and outpatient services encountered inflation rates around 8 percent in the past 12 months, which is 2 percent higher compared to the previous year, according to a new report.
The inflationary data is included the January 2010 Budget Impact Projections Report by Novation, an Irving, Texas-based healthcare contracting supply company. The report focuses on price management strategies for the members of VHA, Inc., the University HealthSystem Consortium and Provista, but also offers insight into hospital supply chain data and analytics that impact the entire industry.
The report notes that the cost of medical-surgical instruments saw modest increases of 1.1 percent in 2009 and 1.6 percent in 2008, while surgical supplies only rose 0.6 percent in 2009 after seeing a 2.2 percent rise in 2008 and laboratory instruments and equipment experienced modest price increases in 2008 and 2009.
Other factors influencing hospital supply chain budgeting include the price of gasoline, which increased 55.2 percent in 2009. The cost of intermediate finished goods (less food) increased 3.2 percent for hospitals during the past 12 months, and freight trucking costs decreased 1.4 percent in 2009.
The Budget Impact Projections Report is published each January and July and features data from Novation's database, suppliers, raw materials resources, the U.S. Bureau of Labor Statistics' Producer Price Index (PPI) and the Consumer Price Index (CPI).
Novation's healthcare supply chain projections for 2010 indicate the CPI for food is projected to increase 2.5 percent to 3.5 percent. Factors in 2010 that could raise food prices, the report says, include the weakening U.S. dollar, economic speculation, low production levels and energy costs.
Hospitals could also be hit with dramatic price increases for centrifuged latex, which are linked to supply and demand for oil. Latex prices have increased 32.5 percent over the last three months and have increased every month since June 2009.
Novation develops and manages competitive contracts with more than 600 suppliers, and purchased nearly $35.7 billion in 2008.