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Supply chain spending is currently the second largest cost for health systems and is projected to surpass labor costs to be hospitals’ greatest expense by 2020. According to Definitive Healthcare data, the top 25 hospitals with the highest total medical & surgical supply costs spent a total of over $14.2 billion in 2018, with an average annual spend of $569 million in 2018.

The top 25 hospitals with the highest laundry & linen services spend in 2018 reported total costs of over $157 million, with an average spend of $6.3 million.

Spending on medical and surgical supplies is particularly discretionary in hospitals and other care facilities, with individual physicians requesting their preferred items. These physician preference items can be more expensive than alternative supplies, and do not necessarily lead to improved care outcomes. Supply costs can be minimized without sacrificing clinical quality, and individual physicians can take responsibility for their personal spending, making them the primary target of hospitals and care facilities looking to lower overall operating costs.

A recent study by consulting company Navigant found that the average hospital could save $11 million on annual spending by streamlining their supply chains. Additionally, it found that health systems with more efficient supply chain systems and costs also had higher value-based purchasing and HAC performance.

Where hospitals often lose out on savings is in their inventory management systems — more than 75 percent of U.S. hospitals still rely on manual inventory management rather than an electronic system. Manual inventory management cannot always account for how long medical devices and other supplies have been sitting unused, how often each type of device is ordered, clinical effectiveness, and more. This disorganization leads to overspending and, and could lead to unfavorable clinical outcomes.

The following lists detail the top 25 with the highest medical & surgical supply costs and the top 25 hospitals with the highest laundry & linen services costs in 2018.

Top 25 Hospitals by Medical/Surgical Supply Costs

 

Hospital Name

Definitive ID

Total Supply Costs

Net Patient Revenue

Staffed Beds

1.

Cleveland Clinic Main Campus

3120

$807,790,898

$5,164,424,360

1,285

2.

University of Texas MD Anderson Cancer Center

4017

$802,699,169

$3,480,505,919

674

3.

University Hospital

2096

$759,414,435

$3,296,778,854

931

4.

NewYork-Presbyterian/Weill Cornell Medical Center

541974

$716,321,119

$5,340,902,266

862

5.

AdventHealth Orlando

873

$713,442,407

$3,769,768,374

2,753

6.

IU Health Methodist Hospital

1365

$684,360,251

$2,851,732,979

1,226

7.

NYU Langone Tisch Hospital

2843

$675,744,563

$4,101,296,000

725

8.

Stanford Hospital

588

$653,161,999

$4,132,132,686

447

9.

Duke University Hospital

2973

$645,814,821

$2,339,265,283

954

10.

UK Albert B Chandler Hospital

274110

$560,162,949

$1,433,168,657

524

11.

UCSF Helen Diller Medical Center at Parnassus Heights

560

$531,809,799

$3,620,962,130

782

12.

Mount Sinai Medical Center

2837

$523,063,874

$2,683,297,481

1,067

13.

Vanderbilt University Medical Center

3742

$519,171,334

$3,442,776,569

626

14.

Mayo Clinic Hospital - Saint Marys Campus

2191

$504,590,000

$2,584,637,894

1,115

15.

Norton Hospital

1678

$504,329,397

$1,948,330,283

340

16.

UC San Diego Medical Center - Hillcrest

550

$496,129,883

$1,842,794,494

381

17.

Methodist University Hospital

3818

$489,257,582

$1,847,831,390

617

18.

Orlando Health Orlando Regional Medical Center

872

$484,884,980

$2,319,178,866

808

19.

Barnes-Jewish Hospital

2442

$478,815,570

$2,028,038,828

1,272

20.

Hackensack University Medical Center

2645

$470,084,181

$1,674,633,238

687

21.

Dana Farber Cancer Institute

1978

$469,196,673

$1,130,077,403

30

22.

The Johns Hopkins Hospital

1914

$454,319,095

$2,041,319,447

1,007

23.

Northside Hospital Atlanta

1000

$437,773,455

$2,081,577,841

536

24.

Brigham and Womens Hospital

1969

$434,118,183

$2,257,366,198

804

25.

UNC Medical Center

3015

$429,106,111

$1,846,906,307

771

 

Fig 1. Data from Definitive Healthcare based on July 2019 Medicare Cost Report release; the next scheduled Medicare Cost Report release is October 2019.

 

Top 25 Hospitals by Laundry & Linen Expenditures

  Hospital Name Definitive ID Total Linens Costs Net Patient Revenue Staffed Beds

1.

NewYork-Presbyterian/Weill Cornell Medical Center

541974

$12,477,564

$5,340,902,266

862

2.

Cleveland Clinic Main Campus

3120

$11,039,879

$5,164,424,360

1,285

3.

Montefiore Hospital - Moses Campus

273024

$8,779,466

$2,728,344,000

1,449

4.

NYU Langone Tisch Hospital

2843

$7,341,042

$4,101,296,000

725

5.

Cedars-Sinai Medical Center

430

$7,163,881

$3,140,742,831

880

6.

Memorial Hermann Southwest Hospital

274147

$6,965,548

$1,438,856,241

547

7.

Ronald Reagan UCLA Medical Center

395

$6,759,698

$1,785,028,754

445

8.

UCSF Helen Diller Medical Center at Parnassus Heights

560

$6,351,378

$3,620,962,130

782

9.

Hartford Hospital

718

$6,133,995

$1,230,702,224

729

10.

Memorial Hermann - Texas Medical Center

4018

$6,071,580

$1,613,167,123

993

11.

Wake Forest Baptist Medical Center

2976

$6,060,459

$1,579,971,117

797

12.

UF Health Shands Hospital

756

$5,756,743

$1,458,878,312

742

13.

Rhode Island Hospital

3603

$5,651,764

$1,228,268,163

622

14.

St Josephs Hospital

814

$5,579,084

$1,230,803,965

527

15.

Aurora St Lukes Medical Center of Aurora Health Care Metro

4534

$5,496,552

$1,428,003,637

854

16.

Hackensack University Medical Center

2645

$5,190,262

$1,674,633,238

687

17.

Long Island Jewish Medical Center

2828

$5,188,740

$2,448,878,160

524

18.

LAC & USC Medical Center

476

$5,173,285

$813,656,534

594

19.

Loma Linda University Medical Center

519

$5,106,893

$1,512,924,248

507

20.

Methodist Hospital

3862

$5,064,850

$1,499,642,523

1,548

21.

The Johns Hopkins Hospital

1914

$5,001,430

$2,041,319,447

1,007

22.

Jackson Memorial Hospital

845

$4,931,996

$1,166,828,685

1,457

23.

Beth Israel Deaconess Medical Center

1970

$4,858,331

$1,394,488,878

679

24.

Mission Hospital - Asheville

2948

$4,781,144

$1,209,452,518

665

25.

Huntsville Hospital

81

$4,633,423

$979,683,478

844

Fig 2. Data from Definitive Healthcare based on July 2019 Medicare Cost Report release; the next scheduled Medicare Cost Report release is October 2019.