2.3 Excise Tax: Taxation on Revenue, Not Profit
January 2, 2013Key Factors in Managing the Sales Process
January 10, 2013
The following is an overview of a recent release by Novation and indicates the estimated impact on budgets and projected effects that hospitals and other healthcare providers will see during 2013. Due to the complexity of these calculations, no warranties or guarantees of any kind are provided. Market changes may modify these estimates at any time.
Overall Price Changes
The approximate average of price changes throughout a hospital is an increase of 2.9%, but this number is pulled significantly downwards by Cardiovascular costs, which are projected to increase only 0.7% throughout the year. Without this number taken into consideration, the overall average is an increase approximately 3.7%. Costs for Facilities are projected to increase the most at 5.9%, while various factors have contributed to push Food and Nutrition up 5.8%. Prices for all commodities may swing wildly depending on world events.
Imports and Exports
Changes in the relative values of currencies have modified the dollar costs for importing and exporting goods. While currencies continue to fluctuate, the US Dollar has lost strength against the Japanese Yen, Russian Rubles, and United Kingdom Pounds, and if these trends continue, the cost of base materials (including oil) may continue to rise. Oil costs may be offset somewhat by greater local production. The US Dollar has had relative gains against Chinese, European Union, and Indian currencies, so imports of materials from these areas may become less expensive than before.
Raw Material Projections
Prices for Paper, Cotton, and Energy are projected to remain roughly the same, so there is no expectation of significant new costs for basic supplies like sheets and bandages. Increased worldwide demand (and other factors) have contributed to a rise in the prices for resins, while metals such as steel, copper, and aluminum are expected to rise during 2013. This may lead to an increase in costs for medical equipment as the cost of production rises.
Stainless steel has recently seen a surplus in production and may not rise as much as other metals.
Rubber and Latex are also currently filling warehouses, but several countries have cut their production volume. If current supplies are purchased and used faster than they are replenished, prices can be expected to rise in early 2013.
Foodstuffs
Food production regions around the world have experienced significant drought, and some crops (such as corn and soybeans) have less than one-third of their plants considered to be in good condition. Wheat prices have risen alongside these costs, while rains in Brazil, India, and Australia have damaged sugar harvests.
Fruits and Vegetables have fared better than staple crops, with relatively solid supplies and plentiful harvests. Barring natural disasters that damage widespread crop areas, prices for these should remain relatively low.
Limited staple harvests have affected meat production and many herds have been thinned. Prices can be expected to remain high for the entirety of the year.
Summary
While several areas have positive signs and lower-than-average changes, most areas will see enough of an increase that hospitals and care providers may begin reconsidering current contracts and looking for better deals on what they already have. Facility costs may be difficult to control, so the primary areas of consideration are likely to be food supplies (outside of fruits and vegetables), Orthopedics, business products, imaging work, and laboratory work as these areas are projected to have the most significant increases in costs.
Early plans to help hospitals deal with these increased costs can help develop closer relationships and ensure long-term partnerships as hospitals see your own company working to help meet their needs rather than contributing to problems by being inflexible in a changing market.
Image: Google Images
