Healthcare “Supply Expense” Definition

AHRMM and the Healthcare Financial Management Association (HFMA) have developed a standard definition for supply expense in healthcare organizations. This definition helps hospitals and other healthcare organizations compare their supply costs to others and look for ways to improve the quality of care to the communities they serve.

Definition

The net cost of all tangible items that are expensed including freight, standard distribution cost, and sales and use tax minus rebates. This would exclude labor, labor-related expenses and services as well as some tangible items that are frequently provided as part of service costs.