While rising gas prices are no picnic--no matter who you are--they've been particularly troublesome for hospitals, whose supply prices have shot up dramatically of late. Many--but not all--of the price hikes are driven by the continually-rising price of oil, but others are not. All told, it's an ugly picture that shows no signs of getting better over the near term. And with many hospitals at the break-even point or even losing money, supply costs could be the straw that breaks the camel's back for some.
Goods that use oil as an ingredient in their manufacture are particularly hard hit. For example, at Walgreen Co. stores, a box containing 120 store-brand latex gloves is now $7.99 when it's on sale, while customers could get two boxes for $9.99 a year ago. Countless other products, including plastic bed pans, blood bags, tubing and syringes also use oil in their production. Given oil's stratospheric prices of late, costs for production are doubling or even tripling, manufacturers say. This can generate huge additional expenses for hospitals that, for example, might use 16,000 gloves a day, or 6 million a year, at an annual cost of $200,000.
Unfortunately, as inflation spreads its web across the economy, other types of goods have also gotten more pricey. For example, hospital gown prices have jumped dramatically, up 40 percent per unit, to around 70 cents each, according to supplier Medline Industries.
Despite the expanding cost of inputs, some vendors have decided to hold off on increasing prices, including Baxter International and Hospira. However, executives doubt they can hold out much longer. Brace yourself.
To learn more about supply price pressures:
- read this piece from the Chicago Tribune