INFLATIONARY INDICES JULY 1, DECEMBER 31, 2012
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1 INFLATIONARY INDICES JULY 1, DECEMBER 31, 2012
2 AMERINET INFLATIONARY INDICES Amerinet s Customer-Focused Portfolio Get on the fast track to savings. A typical healthcare provider can reduce costs on 60 to 65 percent of its purchases with contracts addressing: Diagnostic imaging Environmental services Executive resources Foodservice Laboratory Medical supplies Office solutions Pharmacy Plant engineering Surgical supplies July 1, December 31, 2012 These projections represent industry inflationary performance, actual pricing through Amerinet contracts and programs, and the expected impact of upcoming contract bids. Most contracted products should reflect lower inflationary impact than the general industry projections. The percentages express the best estimate possible from all input elements. The actual inflationary increases will be subject to social, economic and political pressures, which are impossible to accurately predict. 1 AMERINET INFLATIONARY INDICES
3 Product Category Amerinet Projection Industry Projection Comments Business Travel Air Travel (Domestic) 2-7% Car Rentals (-1) - 2% Hotel Rooms Mid-Range: 1-5% Upper Range: 2-6% Meetings 4-8% Diagnostic Imaging Barium 0% 15% Contrast Media (ionic) 0% 10% Contrast Media (MRI) 0% 2% Contrast Media (nonionic) 0% 3% Digital Imaging Equipment 0% 3-7% Dry Laser Imagers 0% 0% Imaging Equipment 0-3% 4-5% Excludes new technology and newly introduced equipment. Ultrasound 0% 0% Excludes new technology and newly introduced ultrasound equipment. X-Ray Developing Chemicals 8-15% 8-15% X-Ray Film and Related Products 8-80% 20-80% Konica and Fuji price increases of 8-15% firm to March 31, Carestream price increses 20-80% effective immediately. (dependent upon film type). Environmental Services Can Liners 10% 20% This market will continue to be volatile in 2011 with any small international incident or shortage sending prices higher rapidly. Cleaning Supplies 5% 7% Industrial Paper 5% 10% Current pricing guaranteed through October Soaps and Disinfectants 0% 5% GOJO guaranteed through June Textiles 15% 30% Shortage of supply has caused this market pricing to skyrocket. Executive Resources Consulting Services 0% 0-2% Pricing expected to remain relatively flat for the remainder of the year. Moving Services 3% 2-5% Two to five percent higher pricing in the summer months due to tight capacity and then pricing goes down to pre-summer levels in the September - December 2011 months. Telecommunications (voice and data) 0% 0% Zero changes expected for the remainder of the year. Temporary and Permanent Staffing 0% 0% Rates expected to stay level. Wireless Communication 0% 0% Zero price fluctuations expected. REDUCING HEALTHCARE COSTS. IMPROVING HEALTHCARE QUALITY. 2
4 Product Category Amerinet Projection Industry Projection Comments Foodservice Beverages (carbonated) 7.5% 10% Increase due to price of corn syrup (fructose). Beverages (coffee and juice) 12% 20% The freeze in Florida is having significant impact on the juice pricing this year. Bread and Bakery 8% 12% Canned/Frozen Products 7% 10% Cheese, Ice Cream and Milk 8% 12% Detergents 3% 6% Lack of caustic raw materials are driving this market. Dietary Paper 3% 7% Dixie guaranteed though November 2011, Solo through September Enterals 0% 0% Amerinet/Abbott pricing protected through December Amerinet/Nestlé pricing protected through December Laboratory Analyzers 0% 0-3.5% Consumables 0% 3.5-6% Disposables/Plastics 0-8% 3.5-6% Kits, Reagents 0-3% 3-6% POC Diabetes 0% 4-6% Medical Supplies Electrodes 0-3% 0-4% Amerinet pricing firm through February Exam Gloves 0-25% 10-25% Amerinet pricing is firm through 2014 on surgical gloves, Ansell imposed a 25% increase on latex exam gloves. Foam-based Products 0-2% 0-6% Amerinet patient surfaces pricing is firm through November Forecasts call for raw materials to increase slightly. Incontinence Products 0-5% 0-5% Amerinet pricing is firm through 2013 for Attends. Needles and Syringes 0% 2-5% Amerinet pricing firm through July Watching to see if the Suppliers attempt to pass along the Medical Device Tax due in 2013 in the next negotiations. Patient and Fetal Monitoring 0-3% 0-6% Patient Plastics 0% 2-5% Amerinet pricing is firm through June Patient Room Furniture 0% 0-5% Amerinet pricing firm through December Steel pricing continues to affect this market. Rehabilitation Equipment 0% 0-15% Respiratory Supplies 0% 0-8% Amerinet pricing protected through November Demand for products to deal with H1N1 is waining, but some manufacturers are still taking advantage of facilities and increasing pricing in the open market. 3 AMERINET INFLATIONARY INDICES
5 Product Category Amerinet Projection Industry Projection Comments Medical Supplies (Continued) Stretchers 0% 0-8% Steel pricing continues to affect this market. Urological Products 0% 0-5% Amerinet pricing is firm through December Office Solutions Computer Hardware 0-3% 0-3% Minor changes anticipated. Computer Software 0-4% 0-4% Minor changes anticipated. Forms 0-2% 0-4% The increase in forms pricing represents the cost of raw materials (paper) and changes in the Consumer Price Index (CPI). Office Furniture 3-4% 3-10% The office furniture industry has experienced a substantial increase in the cost of raw materials, especially in steel, aluminum, copper, plastic, wood and fuel. Office Supplies 10% 2-20% Office supplies are increasing due to the rising cost of raw materials such as plastic. Additionally, changes in the value-added tax (VAT) in China are also a contributing factor. Paper, Copy 10% 3-15% Paper prices are increasing due to market changes associated with decreased supply. The closing of mills is another contributing factor. Paper, Other 5% 3-10% Factors contributing to the increase include increasing fuel costs, rising foreign demand and high operating rates at the mills. Toner 10% 7-15% Toner prices will inrease due to the rising cost of oil and its impact on plastic prices. Pharmacy Albumin 5% 5% Supplies are beginning to tighten up once again. Biotech Products 9% 9% Increased demand and high manufacturing costs with limited patent populations will drive price increases. Branded Oral and Injectable Products (contract) 5% 8% A number of products are nearing the end of their lifecycle forcing price increases. Branded Oral and Injectable Products (non-contract) 9% 9% Economic downturn forcing price increases as well as uncertainty over health reform along with approach of patent expirations. Generic Products (contract and non-contract).5-1% 6% Increased competition and new products due to patent expirations will keep increases minimal, however, due to supplier consolidation and regulatory issues, prices will continue to rise. IGIV 0% 5% IGIV supply issues have resolved. Price increases to moderate as inventory levels increase. IV Sets and Solutions 3% 4-7% Prices for plastics and freight costs have increased and will be passed along to customers. Total Projected Hospital Pharmacy Expense 2% 1-3% Includes price inflation, utilization, mix of products and a blend of utilization and mix. Consumer Price Index Prescription Drugs % For a 12 month period as of December 2010, CPI showed no change, holding at 4.3%. Producer Price Index Prescription Drugs % For a 12 month period as of December 2010, PPI down 2.3% (6.9 to 4.6%). Sources; Hoffman J, Shah N, Vermeulen G, et al. Projecting future drug expenditures AJHP 2011; 68: US Dept. of Labor, Bureau of Labor Statistics, Amerinet Pharmacy contract terms. REDUCING HEALTHCARE COSTS. IMPROVING HEALTHCARE QUALITY. 4
6 Product Category Amerinet Projection Industry Projection Comments Plant Engineering Carpeting 0% 3% Oil prices are rising, but demand is slow to recover so pricing should remain relatively flat. HVAC Equipment 4% 8% Raw material, manufacturing and distribution expenses are rising. Medical Gases 5% 10% Price increases are due to increases in energy expenses. Approximately percent of the cost to produce medical gases is energy (electricity and natural gas) and another percent is related to fuel costs for both manufacturing and distribution. Paint and Coatings 0% 6% Raw materials are in short supply due to manufacturing capacity issues. Increasing petroleum costs are price driver. Plumbing Supplies 0% 4% Metals market pricing is primary driver. Water Treatment 0% 5% Raw materials price increases. Labor and overhead are primary cost drivers. Surgical Supplies Anesthesia Equipment 0% 0-5% Amerinet pricing is protected through September Manufacturers continue to work with customers on an individual basis for capital equipment orders. CPTs 0% 0-2% Pricing is firm through December CSR Wrap 0% 0-5% Amerinet pricing is firm through September Orthopedic Implants 0% 0-10% Pricing is firm through April Packs and Gowns - Disposable 0% 0-5% Pricing is firm through December Sterilizers, OR Lights and Tables 0-3% 3-6% Pricing is firm through July Surgical Dressings 0% 0-5% Pricing is firm through May RFPs are currently out. Surgical Gloves 0% 2-3% Pricing is firm through May AMERINET INFLATIONARY INDICES
7 As a leading national healthcare group purchasing organization, Amerinet collaborates with acute and alternate care providers to create and deliver unique solutions through performance improvement resources, guidance and ongoing support. With better product standardization and utilization, new financial tools beyond contracting and alliances that help lower costs, raise revenue and champion quality, Amerinet enriches healthcare delivery for its members and the communities they serve. To learn more about how Amerinet can help you successfully navigate the future of healthcare reform, visit The inflationary indices described have been provided to Amerinet by member institutions, contracted suppliers, a broad spectrum of industry sources and HealthINFLATION News. For more news on healthcare inflation and healthcare costs, visit REDUCING HEALTHCARE COSTS. IMPROVING HEALTHCARE QUALITY. 6
8 Improving Your Supply Chain Management Professional Services and IT Data Analytics Quality and Safety Revenue Enhancement Education and Networking Questions? Ask your Amerinet representative or call Customer Service at Amerinet serves acute and alternate care providers nationwide JP
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