Hospital supply expenses are surging again, signaling that inflationary pressures and utilization trends remain deeply embedded across the industry.
Kaufman Hall’s “National Hospital Flash Report” data collected from 1,300-plus hospitals in September and released in mid-November shows sharp increases across most regions and hospital sizes, underscoring how supply chain dynamics are reshaping budgets, operational planning and strategic priorities heading into 2026.
10 key notes:
1. Nationally, supply expenses rose 6% month over month and a striking 13% year over year, with 8% year-to-date growth compared to last year. These figures signal that inflationary forces and supply chain complexity are still exerting real cost pressure, even as disruptions ease. For C-suite leaders, the message is clear: supply cost management can no longer be treated as a procurement issue alone; it is a strategic priority touching operations, finance, clinical leadership and enterprise planning.
2. Across regions, the story becomes even more nuanced. The West posted some of the sharpest increases, with supply expenses climbing 8% month over month, 15% year over year, and 11% year to date. These numbers point to the costly realities facing hospitals in markets with high patient acuity, significant procedural volume and elevated logistical costs. Even small shifts in utilization or pricing can cascade quickly.
3. The Midwest showed a similar pattern of sharp short-term escalation, with expenses rising 8% month over month and 13% year over year. While year-to-date expenses were up a more moderate 7%, the month-to-month spike suggests renewed pressure in categories like pharmaceuticals, surgical supplies and commodity products — areas where price volatility has persisted despite broader economic stabilization.
4. In the South, supply cost increases were comparatively restrained, rising 4% month over month and 8% year over year, matching the region’s 8% year-to-date average. Still, even “moderate” increases represent a meaningful budget impact for systems already balancing rising labor costs and softening margins.
5. The Northeast and Mid-Atlantic saw a 6% month-over-month increase, 11% year-over-year growth and 8% year-to-date rise — a pattern that reflects high procedure intensity and ongoing pharmaceutical inflation. These environments often require extensive inventory management and significant upstream coordination, heightening the strategic importance of supply chain partnerships.
6. The Great Plains region stands out with the most dramatic spike: 20% year-over-year growth and a 9% year-to-date increase, despite a more stable 6% month-over-month movement. Such a steep annual rise may signal delayed contract resets, higher distribution costs across wide geographies, or shifts in clinical utilization patterns.
7. Hospital size also plays a meaningful role in shaping supply cost trajectories. The smallest hospitals, those with 25 beds or fewer, saw costs rise 6% month over month and 13% year over year, reflecting the challenges these facilities face in negotiating pricing power and managing inventory with limited scale.
8. Mid-sized hospitals experienced diverse but consistently high increases. Facilities with 26 to 99 beds saw 6% month-over-month growth and 10% year-over-year increases, while those with 100 to 199 beds posted 6% month over month and 11% year over year. These organizations must strike a delicate balance between utilization management and maintaining reliable supply access across service lines.
9. Larger hospitals and health systems saw some of the fastest growth. Hospitals with 200 to 299 beds experienced 8% month-over-month increases and 13% year-over-year growth, while 300 to 499-bed hospitals saw the same 8% month-over-month jump and 15% year-over-year rise. These higher-acuity organizations typically carry larger surgical volumes and more complex supply portfolios, making them particularly exposed to price and utilization shifts.
10. Facilities with more than 500 beds reported significant pressure: 8% month over month, 13% year over year, and 12% year to date, some of the highest year-to-date increases of any size group. For major regional systems, these numbers reflect the compounding effect of high demand, sophisticated care models and premium supply needs.
