Top hospitals by medical and linen supply costs

Supply chain costs account for a large portion of hospital expenses, averaging about 14% of total hospital operating expenses. These costs include not only necessary medical and surgical supplies, pharmaceuticals, medical devices and personal protective equipment (PPE), but also purchased services like food preparation or laundry and linens.

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 5% each year.

Below, we've compiled lists of the top 25 hospitals by medical and surgical supply costs and the top 25 hospitals by laundry and linen expenditures. These metrics are updated annually from Medicare Cost Report data.

Top 25 hospitals by total medical and surgical supply costs

Fig. 1 Data is from the Definitive Healthcare HospitalView product and sourced from the Medicare Cost Report. Data accurate as of July 2022.

Which hospital has the highest total medical and surgical supply costs?

Tisch Hospital in New York City has the current highest hospital medical supply costs among U.S. hospitals at nearly $1.2 billion. The hospital’s medical supplies account for 18% of the hospital’s total operating expense.

Many of the hospitals on the list are among the top hospitals by net patient revenue and include academic medical centers and cancer centers.

The average total medical and surgical supply expense for these hospitals is $766 million, or about 25% of total operating expenses. However, supply expense as a percentage of total hospital operating expense ranges from 12% to more than 40% at these facilities.

How much does a hospital spend on supplies?

The average total medical supply expense for 5,660 hospitals in HospitalView is $37 million. Since 2016, average hospital supply expenses increased from about $25 million.

What is included in total hospital supply costs?

Total hospital supply costs include:

• Medical/surgical supply costs
• Medical devices
• Implantable devices
• Drugs charged to patients

It also includes overhead costs such as:

• Buildings and fixtures
• Maintenance
• Operation of plant

Top 25 hospitals by laundry and linen expenditures

Fig. 2 Data is from the Definitive Healthcare HospitalView product and sourced from the Medicare Cost Report. Data accurate as of July 2022.

Which U.S. hospital has the highest total linen costs?

New York/Presbyterian Weill Cornell Medical Center had the highest total linen costs with a reported total of nearly $15 million. This is a top hospital in New York and a leading academic medical center.

Duke University Hospital in Durham, North Carolina had laundry and linen costs that are more than $12 million. The 25 hospitals on this list had an average laundry and linen service expense of $7.1 million.

How much does a hospital spend on laundry and linens?

The average cost for hospital laundry and medical linen services is about $489,000, based on 4,855 hospitals with this figure reported in HospitalView.

What is included in laundry and linen costs?

The laundry and linen cost center metric represents the cost of routine hospital laundry and linen services whether performed in-house or by outside contractors.

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