July 7, 2025- Technology is transforming healthcare and hospitals as innovations are revolutionizing surgical procedures, medical devices and diagnostics, according to Cardinal Health. Yet, even in this high-tech environment, hospital staff are managing medical supply inventory by counting items and tracking product availability with a spiral-bound notebook, sticky notes and spreadsheets. A recent Cardinal Health survey of hospital staff and decision makers found that nearly one in four health systems still rely on manual processes to maintain and reorder supplies to support patient care.
Supplies represent the second largest expenditure for hospitals after labor costs. According to the American Hospital Association, in 2023, hospitals spent nearly $147 billion on medical supplies, an increase of 4.7% over the previous year, with supply expenditures expected to grow. Locally, a regional health system may purchase up to 60,000 unique products annually, some of which may be duplicative or unnecessary, according to a McKinsey & Company article.
The operating room – while responsible for nearly 70% of a hospital’s revenue – also accounts for much of the health system waste. In fact, 13% of surgical supply costs can be attributed to wasted supplies.