Hospitals don't save much on supply chain after they're acquired

Posted August 23, 2018

Publication by Becker's Hospital Review

For the report, titled "Mergers and Marginal Costs: New Evidence on Hospital Buyer Power," researchers examined ECRI Institute data on supply purchase orders from more than 1,200 hospitals from 2009 and 2015.

The report disclosed that across 47 top supply categories, acquired hospitals saved an average of $176,000 annually, or 1.5 percent of total supply costs. These savings were largely driven by a 2.6 percent decrease in costs for physician preference items, which are the expensive, high-tech devices that physicians have strong ties to. According to researchers, the decrease is explained by price negotiation efficiency. Read more