Inflation, oil make cost of medical supplies soar

The prices of many products are under pressure because they rely on petroleum.

Chicago Tribune

CHICAGO — Inflation is racing through the economy at a pace not seen in years, touching even the medical gloves used by hospitals, as manufacturers cope with high oil prices.

The cost of living in June shot up at the fastest rate in 17 years, with the Labor Department reporting this week that consumer prices jumped 1.1 percent, a much faster clip than anticipated.

Inflation is corrosive to paychecks, cutting deeply into consumers’ earning power, but the phenomenon hurts even more in an economy struggling to maintain growth. Inflation also hurts companies when they can’t pass on higher costs because of competitive pressure.

Much of the inflation pressure now is a result of oil prices, and its impact is most obvious at the gas pump, though high food prices are also hurting shoppers at the grocery store. Though oil prices have dropped steeply the past few days, they remain at historically high levels.

There are myriad ways the impact of high oil prices touches consumers — or is likely to soon — and the medical supplies used by hospitals and sold in drugstores are one example.

Consumers can see the results at retail outlets such as Walgreen Co. stores, where the retailer says a box containing 120 of its store-brand latex gloves has almost doubled in price. A customer who could get two boxes for $9.99 a year ago now pays a sale price of $7.99 for one box. Oil is used in the manufacture of gloves.

Medical manufacturers, distributors and hospitals all are coping with rising prices, and they are making crucial decisions about whether to raise customer prices or hang tough and eat the higher costs to protect relationships or fend off competitors.

From the thousands of gloves used each day to plastic bed pans, blood bags, syringes and tubing used for delivering medications to patients, prices for many everyday medical products are under pressure because they rely on petroleum, industry players say. In some cases, suppliers such as Mundelein, Ill.-based Medline Industries Inc. are seeing costs double or triple for products.

Though a single glove can amount to pennies, that cost adds up for a hospital. Medline says it’s not uncommon for a 200-bed hospital to use 16,000 gloves a day, or about 6 million a year at a cost of $200,000 a year. A hospital that paid $2.70 two years ago for a box of 100 latex gloves might pay $3.50 to $3.80 today.