Medical supply costs stabilize

Physicians should not see much in the way of price increases, a report suggests.

By Victoria Stagg Elliott — Posted Oct. 9, 2009

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The prices of most medical and surgical supplies have not grown a lot over the past year and are not expected to do so over the next.

That is according to a report issued Sept. 17 by Premier, a hospital- and health system-owned data research and analysis center, and data from the Bureau of Labor Statistics.

"There's some inflation, but it is the lowest I have seen in the last five or six years," said Mike Alkire, president of Premier Purchasing Partners, the supply-chain service division of the Charlotte, N.C.-based organization.

Premier's health care alliance is a coalition of 2,200 hospitals and 63,000 other health care sites such as physician offices. Premier collects and analyzes numbers supplied by the coalition.

Premier's analysis suggests that inflation through 2010 for medical and surgical supplies will average between 1.6% for those used in imaging and as high as 4% for those consumed by laboratories. Supplies used in cardiovascular and surgical services will increase in price by about 3.2%. These projections are similar to ones made in a report issued in March.

According to BLS data, the annual inflation rate for medical supplies and equipment was 1.3% in August; a decrease from the 2.6% reported in August 2008.

Experts say inflation has gone down and will stabilize in the future because an increasing number of pharmaceuticals are becoming available as generics. In addition, budget-cutting means that institutions are not stocking up on as many supplies. The reduced demand is leading suppliers to hold prices steady.

"All these things are having an impact on inflation and flattening it this year," said Alkire.

The prices of certain materials, however, are expected to grow more than others. Costs for medical isotopes, any equipment that includes an oil-based material, such as vinyl gloves, or anything needed to prepare for a possible A(H1N1) influenza outbreak are expected to increase the most, because demand is or may be greater than available supplies.

However, supplies are still outpacing the general rate of inflation. According to the BLS, the Consumer Price Index was down 1.5% from August 2008 to August 2009, although taking out volatile food and energy prices, the index went up 1.4%. Those percentages were not seasonally adjusted.

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