Supply Costs Rise by 25% at 25 Health Systems
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Hospital Supply Costs Rose Significantly in 2024, Outpacing Inflation
A new report from the American Hospital Association reveals a substantial increase in hospital expenses in 2024, driven largely by rising supply and labor costs. This analysis details the key findings, impacts, and potential future trends.
Key Findings from the American Hospital Association Report
The American Hospital Association’s (AHA) annual “Cost of Caring” report, released on April 30, 2025, indicates that hospital expenses grew by 5.1% in 2024. This growth rate exceeded the overall inflation rate of 2.9% for the same period.Supply costs, on average, accounted for 13% of total hospital expenses in 2024.
While expense growth is beginning to slow in 2025, the report emphasizes that it remains elevated, particularly due to ongoing pressures related to labor and supply chains. This sustained increase in costs presents significant challenges for hospitals and healthcare systems nationwide.
Supply Cost Increases Across Major Health Systems
Analysis of quarterly data from 25 health systems reveals varying degrees of supply cost increases year-over-year (YOY). The following table details supply costs for the quarter ended September 30, 2024, where available, or the most recent quarter reported.
| Health System | Location | Quarter Reported | Supply Costs (USD) | YOY Change |
|---|---|---|---|---|
| Allegheny Health Network | Pittsburgh, Pennsylvania | Q3 2024 | $359.6 million | +12.5% |
| Ardent Health | Brentwood, Tennessee | Q3 2024 | $275.8 million | +9.5% |
| Bayhealth | Dover, Delaware | Q1 2024 | $92.5 million | +5.9% |
| Baylor Scott & White Health | Dallas, Texas | Q1 2024 | $759 million | +14.7% |
| Christus Health | Irving,Texas | Q1 2024 | $456.7 million | +10.3% |
| cleveland Clinic | Cleveland, Ohio | Q3 2024 | $427.1 million | +12.5% |
| CommonSpirit Health | Chicago, Illinois | Q1 2024 | $1.7 billion | +9.3% |
| Community Health Systems | Franklin, Tennessee | Q3 2024 | $618.7 million | +11.1% |
| HCA Healthcare | Nashville, Tennessee | Q3 2024 | $3.4 billion | +8.8% |
| Intermountain Healthcare | Salt Lake City, Utah | Q3 2024 | $444.6 million | +11.6% |
| Lifepoint Health | brentwood, Tennessee | Q3 2024 | $484.6 million | +10.2% |
| Mass General Brigham | Boston, Massachusetts |