Trade war with China threatens to raise hospital costs in Florida

President Donald Trump may have put a handbrake on the proposed tariffs, but the ongoing trade war with China could raise healthcare costs, according to a group of lobbying at Florida Hospitals.

According to Mary Mayhew, president and CEO of the Florida Hospital Association, China produces 90% of ibuprofen, which is used in US counter painkillers, and is the world’s largest producer of antibiotics.

She said that even if the costs of medicines and medical supplies increased by 5%, medical costs across Florida would increase by $500 million. The Trump administration recently announced it was raising tariffs on Chinese goods to 145%.

He said it was too fast, Mayhew said he feared that the sudden imposition of high tariffs would cause a similar supply shortage to what thwarted hospitals at the start of the Covid-19 pandemic. More than 95% of imported surgical gloves and gowns in 2020 were Chinese origin, according to an analysis by the Cato Institute, a libertarian think tank.

So far, drugs have been excluded from customs duties. That exclusion could be temporary given that Trump says he wants to bring their production back to the US.

“We know what happens when the supply chain gets messed up, like we’ve worn masks, gowns and gloves,” Mayhew said. “It’s almost immeasurable to imagine what will happen in the confusion related to medicine.”

The Trump administration’s policies make sense to boost national security and protect the supply of national medical supplies and equipment, Mayhew said. In the months leading up to the coronavirus pandemic, the state’s dependence on China was also highlighted as a matter of the US and China Economic and Security Review Board.

But US suppliers need more time to bolster domestic production, Mayhew said.

“You can’t flip the switch and replace its international dependence with domestic production overnight,” she said.

The pandemic has been an object lesson on how rapidly hospital costs rise, Mayhew said. Medical supplies rose in terms of prices, but the costs of contract nursing in particular skyrocketed by 45%.

With tariffs and trade war escalations, further increases are likely to force hospitals and clinics to consider services where subsidies are often subsidized by other areas of care, Mayhew said, as they have low rates of reimbursement from insurers.

These include mental health care, primary care physician services, inpatient psychiatric care, labor and delivery units.

“Unfortunately, we’re going to look at the services that are bleeding red ink when we’re losing money and trying to maintain our ability to provide care,” she said.

Officials at local hospitals, including HCA Florida, which operates 16 hospitals in the area, said they are waiting to see the impact of tariffs and costs.

Officials at Tampa General Hospital said they are monitoring inventory and existing contracts with suppliers.

“In many cases, external factors such as markets, inflation, and labor shortages affect system costs,” spokesman Beth Hardy said in an email. “General Tampa is working continuously to create efficiency to maintain access to affordable, high-quality care and identify savings.”

Baycare officials said the wide range of equipment and supplies that could be affected include personal protective equipment such as masks, gloves, gowns, lab products, medicines, syringes, imaging contrast, ventilators, imaging equipment and surgical instruments.

To achieve savings and manage supplies from bulk orders, the nonprofit operates an AA 258,000 square feet distribution center, filling more than 12,000 orders per day from 16 hospitals in BayCare and numerous clinics and doctor offices across the Tampa Bay area.

“We will continue to work closely with our vendor partners to understand the potential impacts and to consider alternative sources to mitigate the impact of tariffs,” spokesman Lisa Razzler said in an email.