Hospital inpatient and outpatient services encountered inflation rates around 8 percent in the past 12 months, which is 2 percent higher than the previous year, according to a new report.
The January 2010 Budget Impact Projections Report by Novation, an Irving, Texas-based healthcare contracting supply company, found that the cost of medical-surgical instruments increased 1.1 percent in 2009 and 1.6 percent in 2008, while surgical supplies 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.
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.
A new report on supply chain intelligence from the Aberdeen Group shows that knowing where supply chain weaknesses are can boost the bottom line.
The report found top performing companies are 56 percent more likely to perform a root cause analysis of supply chain problems. They are also 97 percent more likely to use supplier/carrier performance scorecards, researchers found.
According to Tim Dumond, a principal at Grant Thornton LLPA, business contingency plans need to start by identifying all possible risks throughout the organization’s supply chain, including vendors.
If hospital executives think going overseas for some supplies may help, they might want to consider this from the new Grant Thornton 2010 Supply Chain Solutions Survey: 49 percent of respondents said global sourcing has increased their ROI, down from 54 percent last year.