Several health systems are bracing for potential supply challenges heading into a new presidential term.
During his campaign, President-elect Donald Trump floated higher tariffs, which could impact prices for all American workers and businesses.
Eight leaders told Becker's how their supply chains have fared over the past year and how they are preparing for potentially higher costs in the new year:
Janet Carlson, MSN, RN. Executive Director for Ambulatory Surgery Centers of Commonwealth Pain & Spine (Louisville, Ky.): My organization is preparing for the potential proposed tariffs in 2025 by diversifying our vendor relationships for the procurement of our medical supplies and medications. While maintaining our existing relationships, we will continue to partner with additional businesses that are in the United States to ensure timely delivery of goods and supplies while not increasing the costs of the products. Supply chain pressures have been very labile since COVID, things still haven't settled down from that significant disruption. There are still allotment issues and delays in delivery dates and times — we do our utmost to avoid … patient care disruptions. We value the ability of our partnered vendors to store our products, as space is always an issue for an ASC. As with every vendor-partner relationship, communication is tremendously important to avoid disruptions
Omar Khokhar, MD. Gastroenterologist at Illinois GastroHealth (Bloomington): It is unknown at this time how tariffs will impact our supply costs. Overall, supply chain pressures have improved within the last year. The IV fluid shortage seems to be recovering, and all products are currently on the shelves.
Benjamin Levy III, MD. Gastroenterologist at University of Chicago Medicine: If the proposed new tariffs are introduced in 2025, healthcare supply costs could increase in gastroenterology, cardiology and across surgical subspecialties. This certainly could impact both ASCs and hospitals nationally by potentially making medical supplies from certain countries more expensive — including gloves, masks and specialized instruments used during procedures. Hopefully medical equipment companies will increase domestic production in the United States. Tariffs on raw materials used in the production of medical devices could increase supply costs and overall healthcare expenses.
Hopefully, tariff exceptions will be made for medical devices, personal protective equipment — like gloves and masks — and procedure instruments to help keep healthcare costs lower in America with the goal of prioritizing public health. Tariff exceptions also would prevent disruptions in medical supply networks.
Peter Passias, MD. Orthopedic Spine Surgeon at NYU Langone Health (New York City): Over the past years, our supply chains have generally improved in line with our recovery globally from the pandemic. In our experience, this has not yet returned to baseline, and certain specific and notable distinctions persist. There have also been individual hurdles related to random natural disasters, such as the recent shortage in IV fluids with recent extreme weather. In preparation for the tariffs this has been considered along with general inflationary related pressures, and projections for diminished reimbursements in certain scenarios. This is generally reflected in our drive for streamlining cost efficiency and OR efficiency to maximize volume. There will certainly be an anticipation of selective utilization of more cost effective alternatives in several cases.
Khawar Siddique, MD. Neurosurgeon and Co-CEO of DOCS Health (Los Angeles): It is too early to know what tariffs, if any, will be implemented under the Trump administration. Hopefully, the threats of tariffs are a negotiating ploy. But, we have seen significant increases in prices over the inflationary last two years. Unfortunately, our only remedy was to raise prices of services where we could and re-negotiate payor contracts where possible.
Barbara Smith. Administrator of Coastal Virginia Surgery Center (Newport News): Likely it will impact many things — we will need to wait and see just how serious it becomes. I have adjusted our budget hopefully enough, but it will take time to feel the full impact.
Anthony Spasaro. Director of Ambulatory Clinics at Monument Health (Rapid City, S.D.): Supply chain issues have definitely improved this year. Any new tariffs would impact supply costs, how much would depend on the length of the tariffs.
Zeeshan Tayeb, MD. Owner and Medical Director of Pain Specialists of Cincinnati: Over the years I have had vendors who supply items both domestic and internationally provide excuses for supply shortages and cost variants. Aside from the COVID-19 pandemic, I specifically recall the shortages and price increases related to environmental factors such as hurricanes. It seems with every newsworthy storm, I hear that the manufacturer, distributor or some supply chain link happened to have a warehouse that was in the direct line of the storm, thus resulting in shortages, backorders or increased prices. It never fails to amaze me that the product I want is not available, but a more costly replacement is. The skeptic in me wonders if that is just a way to move product. Meanwhile, a quick Google search reveals that a large supplier like McKesson netted a profit of $3.16 billion in 2023.
These details outline that using excuses like tariffs, hurricanes or even pandemics are ways for large distributors to maximize profits. As providers, we must have the supplies. Therefore, we will be forced to order and pay whatever price is set, for whatever reason is given. Within my group, we work diligently between vendors to source the lowest price of the products our team requests. By utilizing [group purchasing organizations] and communicating with local representatives, we have been successful in keeping our costs as low as possible. Having a frugal purchasing agent helps keep the costs in check, as you do the best to balance the books. This process has not been better or worse over the years but remained the same. There is always a product that is not available, on backorder or had an environmental issue causing the rise in pricing or temporary shortage. We continue to navigate and prosper knowing this is the cost of doing business.