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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. 

Top U.S. hospitals by total medical and surgical supply costs

RankHospital NameCityStateTotal Med/Surg Supply CostsExplore dataset
1Tisch HospitalNew YorkNY$1,254,441,385 Explore
2University HospitalAnn ArborMI$1,230,399,082 Explore
3Stanford Hospital - 300 Pasteur DrStanfordCA$1,172,413,947 Explore
4University of Texas MD Anderson Cancer CenterHoustonTX$1,107,356,026 Explore
5IU Health Methodist HospitalIndianapolisIN$1,045,559,552 Explore
6AdventHealth Orlando OrlandoFL$963,537,175 Explore
7NewYork-Presbyterian Weill Cornell Medical CenterNew YorkNY$951,439,726 Explore
8Cleveland Clinic Main CampusClevelandOH$950,978,301 Explore
9UNC Medical Center Chapel HillNC$898,149,606 Explore
10UK Albert B Chandler Hospital LexingtonKY$896,913,544 Explore
11UC San Diego Medical CenterSan DiegoCA$830,250,464 Explore
12Medical University of South Carolina Medical CenterCharlestonSC$828,769,081 Explore
13Duke University HospitalDurhamNC$820,657,161 Explore
14Sylvester Comprehensive Cancer CenterMiamiFL$759,644,818 Explore
15Dana-Farber Cancer InstituteBostonMA$756,436,194 Explore
16Norton HospitalLouisvilleKY$722,493,272 Explore
17Vanderbilt University Medical CenterNashvilleTN$715,863,952 Explore
18Yale New Haven HospitalNew HavenCT$707,084,443 Explore
19OHSU Hospital - Portland PortlandOR$696,509,378 Explore
20Wake Forest Baptist Medical CenterWinston SalemNC$680,843,581 Explore
21The University of Kansas HospitalKansas CityKS$655,912,972 Explore
22University HospitalCharlottesvilleVA$652,284,696 Explore
23Northside Hospital AtlantaAtlantaGA$649,160,711 Explore
24Helford Clinical Research Hospital DuarteCA$646,413,818 Explore
25Orlando Health Orlando Regional Medical CenterOrlandoFL$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: 

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.