Healthcare Insights
Top 25 hospitals by medical supply costs
Supply chain costs account for a large portion of hospital expenses, averaging about 14% of total hospital operating expenses. Expenses that qualify as medical supply costs include:
Supply costs are impacted by external factors like rising pharmaceutical prices, as well as internal expenses like physician preference items (PPIs). Though PPI spending and medical supply expenses are more discretionary than other hospital expenses, supply chain spending has been on an upward trend since at least 2014. According to data from the Definitive Healthcare HospitalView product, total supply expenses at U.S. hospitals increase by about 6% each year.
Using data from Definitive Healthcare’s HospitalView product, we created a list of the top 25 U.S. hospitals by medical and surgical supply costs. Data is sourced from the Medicare Cost Report and aggregated from the most recent 12-month interval tracked in our database.
| Rank | Hospital Name | City | State | Total Med/Surg Supply Costs | Explore dataset |
|---|---|---|---|---|---|
| 1 | Tisch Hospital | New York | NY | $1,254,441,385 | Explore |
| 2 | University Hospital | Ann Arbor | MI | $1,230,399,082 | Explore |
| 3 | Stanford Hospital - 300 Pasteur Dr | Stanford | CA | $1,172,413,947 | Explore |
| 4 | University of Texas MD Anderson Cancer Center | Houston | TX | $1,107,356,026 | Explore |
| 5 | IU Health Methodist Hospital | Indianapolis | IN | $1,045,559,552 | Explore |
| 6 | AdventHealth Orlando | Orlando | FL | $963,537,175 | Explore |
| 7 | NewYork-Presbyterian Weill Cornell Medical Center | New York | NY | $951,439,726 | Explore |
| 8 | Cleveland Clinic Main Campus | Cleveland | OH | $950,978,301 | Explore |
| 9 | UNC Medical Center | Chapel Hill | NC | $898,149,606 | Explore |
| 10 | UK Albert B Chandler Hospital | Lexington | KY | $896,913,544 | Explore |
| 11 | UC San Diego Medical Center | San Diego | CA | $830,250,464 | Explore |
| 12 | Medical University of South Carolina Medical Center | Charleston | SC | $828,769,081 | Explore |
| 13 | Duke University Hospital | Durham | NC | $820,657,161 | Explore |
| 14 | Sylvester Comprehensive Cancer Center | Miami | FL | $759,644,818 | Explore |
| 15 | Dana-Farber Cancer Institute | Boston | MA | $756,436,194 | Explore |
| 16 | Norton Hospital | Louisville | KY | $722,493,272 | Explore |
| 17 | Vanderbilt University Medical Center | Nashville | TN | $715,863,952 | Explore |
| 18 | Yale New Haven Hospital | New Haven | CT | $707,084,443 | Explore |
| 19 | OHSU Hospital - Portland | Portland | OR | $696,509,378 | Explore |
| 20 | Wake Forest Baptist Medical Center | Winston Salem | NC | $680,843,581 | Explore |
| 21 | The University of Kansas Hospital | Kansas City | KS | $655,912,972 | Explore |
| 22 | University Hospital | Charlottesville | VA | $652,284,696 | Explore |
| 23 | Northside Hospital Atlanta | Atlanta | GA | $649,160,711 | Explore |
| 24 | Helford Clinical Research Hospital | Duarte | CA | $646,413,818 | Explore |
| 25 | Orlando Health Orlando Regional Medical Center | Orlando | FL | $643,960,276 | Explore |
Fig. 1 Data is from the Definitive Healthcare HospitalView product and aggregated from the most recent 12-month interval tracked in our database. Data is sourced from the July 2023 Medicare Cost Report release. Accessed September 2023.
Which hospitals have the highest total medical supply costs?
Tisch Hospital in New York City has the highest hospital medical supply costs among U.S. hospitals at $1,254,441,385. Tisch is the main teaching hospital for the NYU Grossman School of Medicine and appears at the top of several other hospital expense lists, including accrued salary expenses (fifth place), operating room costs (seventh place), and housekeeping expenses (second place).
In second place is University Hospital in Ann Arbor, Michigan with $1,230,399,082 in total medical supply costs. This facility is the top hospital in the state of Michigan based on net patient revenue and is one of the largest academic medical centers (AMCs) in the nation.
Rounding out the top three is Stanford Hospital, with total medical supply costs reaching $1,172,413,947. This facility is affiliated with the Stanford School of Medicine and is ranked as one of the 10 best hospitals in the nation by U.S. News and World Report.
Interestingly, all the top five hospitals on this list are ASCs, meaning that they have integrated with medical schools to provide primary education for medical students and residents. Most AMCs are also teaching hospitals, but not all teaching hospitals are AMCs. This is because AMCs can issue medical degrees while teaching hospitals cannot.
The remaining hospitals on the list are among the top U.S. hospitals by net patient revenue and include many other AMCs and cancer centers. The most frequent states to appear on the list are California, Florida, and North Carolina, with three hospitals each.
What costs hospitals the most money?
The biggest expenses for hospitals are the salaries of their employees. According to HospitalView data, on average, salary expenses account for more than one-third of total hospital operating expenses. The second highest expense for hospitals is medical/surgical supply costs, followed by employee benefits.
Overall, employee-related expenses like salaries, fringe benefits, and contract labor account for nearly half of a hospital’s operating expense, on average.
How much does a hospital spend on supplies?
Based on data from more than 4,100 hospitals in HospitalView, the average total supply expense is $38 million per hospital. On average, hospital supply expenses have increased by more than 6% annually since 2017.
In comparison, the average total medical and surgical supply expense for the 25 hospitals on the list is $849 million, or about 22% of total operating expenses.
What is included in total hospital supply costs?
Total hospital supply costs include:
It also includes overhead costs such as:
-
Operation of the facility
Learn more
Healthcare Insights are developed with healthcare commercial intelligence from the Definitive Healthcare platform. Want even more insights? Start a free trial now and get access to the latest healthcare commercial intelligence on hospitals, physicians, and other healthcare providers.
You might also be interested in...
