The Hidden Cost of Expired Supplies: Lessons from Hospital Inventory Counts

• Kara L. Nadeau, Healthcare Industry Contributor

During inventory counts, hospital supply chain leaders are often surprised at the number of expired items that are found. Here are three real-world examples spanning large, medium and small healthcare organizations:

• Over $1M in expired products found in a large acute care hospital system
• Over $120,000 in expired products found in a 570-bed hospital
• Several expired items found in a storage area of an approximately 150-bed hospital ahead of an accreditation inspection by TJC (The Joint Commission)

Symptoms of a broader problem

Finding expired products in a healthcare facility during an inventory count can be indicative of broader supply chain management challenges, including poor inventory management practices.

When a healthcare supply chain leader can’t determine how much inventory they have on hand, they risk purchasing too many supplies, and often those supplies expire before they can be used by clinicians in patient care delivery.

Case in point: A published study on inventory management practices at a 580-bed Alabama hospital found inventory record inaccuracy significantly impacted its supply chain, “leading to both overstock and daily shortages throughout the facility.”¹

As the study authors stated: “Operational symptoms described within the paper may direct decision-makers to consider the potential impact that inaccuracy is causing on their hospital supply chain and how to address the impact.”

Clinical, compliance and financial impacts of product expiry in healthcare

Medical/surgical and drug product expiry stemming from poor inventory management practices, including ineffective and inaccurate inventory counts, is a huge safety problem for patients, a significant risk and compliance problem for hospitals, and a tremendous source of waste and costs.

TJC has issued guidance to accredited healthcare organizations on managing and storing packaged sterile supplies in their facilities with the goal to protect patients from infection and “other potential harm from expired or compromised supplies and devices.”² The guidance states:

“Organizations must identify the best location to store the supplies so that staff can readily access them, ensure the supplies are being stocked to the most optimal par levels, and that items have not passed their expiration dates.”

The OR is one area where expired medical supplies and devices put patient safety and hospital compliance at risk. Research has shown that the perioperative environment:³

“Contributes to 70% of all hospital waste, and a proportion of this is due to unused surgical supplies, such as those stocked but never used as they go past their use-by date.”

Turning to a hospital’s bottom line, up to 20% of the total cost of surgical supplies may be attributed to unused supplies, according to published research.

How GHX Inventory Count Services supports effective expiry management

GHX Inventory Count Services deliver fast, accurate, point-in-time inventory data for hospitals using proprietary tracking software (HITS) and handheld scanners.

Trained team members conduct counts across supply chain, pharmacy and clinical areas (e.g., OR, Cath Labs), with results available in user-friendly reports via the GHX Inventory Count Services Customer Portal. These reports provide insights on stock levels, expiring products, and inventory value to support confident, informed decision-making.

In 2024 alone, GHX identified and valued almost $9 million in expired products, with an average of $90k worth of expired supplies per healthcare organization.

1. Neve BV, Schmidt CP. Point-of-use hospital inventory management with inaccurate usage capture. Health Care Manag Sci. 2022 Mar;25(1):126-145. doi: 10.1007/s10729-021-09573-1. Epub 2021 Aug 6. PMID: 34355302; PMCID: PMC8342273.

2. Quick Safety Issue 65: Managing packaged sterile supplies and devices, TJC, June 15, 2022, https://www.jointcommission.org/resources/news-and-multimedia/newsletters/newsletters/quick-safety/quick-safety-issue-65/

3. Amber Downes, David G. Healy, Expiry dates in surgical equipment: What are the options?, The Surgeon, Volume 22, Issue 4, 2024, Pages 212-214, ISSN 1479-666X, https://doi.org/10.1016/j.surge.2024.03.003.