MNI INTERVIEW: Supply Disruptions Boost US Hospital PPE Costs

Global supply chain constraints continue to hamper the delivery of critical medical gear to the U.S., pushing up the prices of personal protective equipment needed to combat the Covid-19 pandemic, the chair of the Institute for Supply Management's new hospital index told MNI.

Hospitals across the U.S. are feeling pressure from the government to build up stockpiles of personal protective equipment for the fall, and traditional manufacturers of PPE still aren't able to keep up with increased demand, Nancy LeMaster said. Many hospitals have had to turn to alternative sources for PPE, which are often much more expensive.

"The level of inventory requested from the market exceeds the level of production," she said. "That's not a short-term fix."

"We're going to see high prices for a while," she added, noting that in some cases hospitals surveyed by ISM said they were paying more than triple the price they normally would for PPE.

SUPPLY CONSTRAINTS

The inaugural ISM Hospital PMI rose to 68.9 in July after reaching 63.6 in June, marking two consecutive months of growth in industry activity following "extreme" contractions in April and May. The association began collecting data on hospitals in 2018.

The supplier deliveries sub-index worsened in July, LeMaster said, as the global supply chain is still unable to catch up with demand for equipment. Business activity was up in July, but grew at a slower pace than June.

EMPLOYMENT RECOVERING

Meanwhile, the employment sub-index was up "significantly" by 14.5 in July following 3 months of contraction, she said.