Hospitals have spent more than $3B securing personal protective equipment during COVID-19

Photo: AlenaPaulus/Getty Images

During the COVID-19 pandemic, hospitals across the U.S. have spent more than $3 billion to procure personal protective equipment for worker and patient safety, although PPE costs have steadily declined since the second quarter of 2020, according to data released this week by Premier.

Prior to the pandemic, in 2019, hospitals typically spent a little over $7 per patient per day on PPE. That figure skyrocketed to $20.40 during the spring of 2020, driven by increased consumption, off-contract buying and PPE bidding-wars against federal and state governments, and other providers, to source limited supplies. 

Since that time, pricing has fallen to $12.45 per patient, per day – or about half of what was paid during the height of the pandemic.

The data also shows that for some PPE categories, such as eye protection, surgical gowns and face masks, pricing is very near pre-pandemic levels, while demand remains strong.

WHAT'S THE IMPACT?

While prices for some PPE have declined since the pricing peak in Q2 2020, prices for other items remain high. A box of 100 gloves that cost $2.39 in February 2020 now costs $30, according to The Los Angeles Times. And many providers have made the switch from standard face masks, at 20 cents apiece, to N95 masks, which provide greater protection but cost $2.50 apiece.

This has left open the question of who should foot the bill for pandemic expenses. Doctors' and dentists' lobbies in California have said insurers should pick up the costs, claiming they're flush with cash after collecting premiums during the pandemic while paying fewer claims than usual. The California Medical Association has supported legislation that would require insurers to reimburse medical practices for pandemic-related expenses such as PPE and disinfectant.

Some of those groups have said Medicare and Medicaid should be billed for PPE and other pandemic-related costs, but so far efforts to that effect have failed at the federal level, the Times said. But some individual states, such as Washington, have enacted laws requiring private health insurers to reimburse a portion of those costs.

Insurance trade groups have opposed these measures.

Meanwhile, The Washington Post reported in February that assisted living facilities, dentists' offices and even hair salons have charged customers hidden fees to help with costs related to PPE or cleaning linked to the coronavirus. According to The New York Times, those fees can range from a few dollars to $1,000 in some cases. One senior living facility, for example, charged $900 for masks, cleaning supplies and meal delivery, and tacked a $60 PPE fee onto ambulance rides.

THE LARGER TREND

The high prices for PPE during Q2 2020 were linked to widespread shortages that occurred around that time as COVID-19 case counts surged, weighing hospitals down with an influx of patients. That necessitated procurement of a much greater volume of PPE than hospitals were used to dealing with.

Almost overnight, hospitals were using about 10 times their usual amount of PPE products, and up to 15 times the usual amount of N95 respirators in the hardest-hit areas. While previously these items were used only for known infectious respiratory illnesses during surgery, hospitals were now using them as universal precautions for all patients.

This created a perfect storm, allowing unscrupulous actors to operate in a "gray market" selling counterfeit products to strapped hospitals.

In simple terms, the gray market for PPE emerges when hospitals buy items at a reduced price and then resell them. They're selling bona fide products, but shady companies have moved counterfeit products through these brokers.

In January, President Joe Biden invoked the Defense Production Act, using it to ramp up production of masks, face shields and other PPE so that national supply exceeds demand.

Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com