Hospital Supply Expenses: An Important Ingredient in Health Services Research

Yousef Abdulsalam, Eugene Schneller

Research output: Contribution to journalArticlepeer-review

16 Scopus citations

Abstract

The purpose of this article is to shed light on hospital supply expenses, which form the second largest expense category after payroll and hold more promise for improving cost-efficiency compared to payroll. However, limited research has rigorously scrutinized this cost category, and it is rarely given specific consideration across cost-focused studies in health services publications. After reviewing previously cited estimates, we examine and independently validate supply expense data (collected by the American Hospital Association) for over 3,500 U.S. hospitals. We find supply expenses to make up 15% of total hospital expenses, on average, but as high as 30% or 40% in hospitals with a high case-mix index, such as surgery-intensive hospitals. Future research can use supply expense data to better understand hospital strategies that aim to manage costs, such as systemization, physician–hospital arrangements, and value-based purchasing.

Original languageEnglish (US)
Pages (from-to)240-252
Number of pages13
JournalMedical Care Research and Review
Volume76
Issue number2
DOIs
StatePublished - Apr 1 2019

Keywords

  • hospital costs
  • supply chain management
  • supply expense

ASJC Scopus subject areas

  • Health Policy

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