22-04-2025
Trade war with China threatens to raise Florida hospital costs
President Donald Trump may have put the handbrake on some proposed tariffs but the ongoing trade war with China could hike the cost of health care, according to the group that lobbies for Florida hospitals.
China produces 90% of the ibuprofen used in over-the counter pain medication for the United States and is the largest producer of antibiotics worldwide, said Florida Hospital Association President and CEO Mary Mayhew.
Even a conservative 5% increase in the cost of pharmaceuticals and medical supplies would result in a $500 million rise in health care costs across Florida, she said. The Trump administration recently announced it was raising tariffs on Chinese products to 145%.
That's too much, too quickly, said Mayhew, who said she fears the sudden imposition of high tariffs will cause supply shortages similar to those that hindered hospitals at the start of the Covid-19 pandemic. More than 95% of imported surgical gloves and gowns in 2020 were Chinese in origin, according to an analysis by the Cato Institute, a libertarian think tank.
So far, pharmaceuticals have been excluded from tariffs. Considering that Trump has said he wants to bring their production back to the United States, that exclusion could be temporary.
'We know what happens when those supply chains are disrupted — like they were with masks and gowns and gloves,' Mayhew said. 'It's almost unfathomable to imagine what would happen with a disruption related to medicine."
The Trump administration's policies make sense to boost national security and to safeguard the nation's supply of medical supplies and equipment, Mayhew said. The nation's dependence on China for medications was also highlighted as a problem by the U.S.-China Economic and Security Review Commission in the months leading up to the coronavirus pandemic.
But U.S. suppliers need more time to ramp up domestic production, Mayhew said.
'You can't just flip a switch and replace that international dependency with domestic production overnight,' she said.
The pandemic was an object lesson in how quickly costs can rise for hospitals, Mayhew said. Medical supplies went up in price while the cost of labor, especially contract nursing soared by as much as 45%.
Further increases due to tariffs or an escalation of the trade war would likely force hospitals and clinics to look at services that, because they have low reimbursement rates from insurance companies, are often subsidized by other areas of care, Mayhew said.
Those include mental health care, primary care physician services, inpatient psychiatric care, and labor and delivery units.
'Unfortunately, for any hospital, or any business for that matter, when you are losing money, and you are trying to maintain your ability to provide care, you inevitably will look at those services that are hemorrhaging red ink,' she said.
Local hospital officials, including HCA Florida, which operates 16 hospitals in the region, said they are waiting to see the impacts of the tariffs and costs.
Officials at Tampa General Hospital said the are monitoring inventory and existing contracts with suppliers.
'Oftentimes, external factors such as the market, inflation and workforce shortages impact system costs,' said spokesperson Beth Hardy in an email. 'Tampa General is continuously working to create efficiencies and identify savings to maintain access to affordable and high-quality care.'
BayCare officials said that broad categories of equipment and supplies that could be affected include personal protective gear like masks, gloves and gowns, lab supplies, pharmaceuticals, syringes, imaging contrast, ventilators, imaging equipment and surgical instruments.
To achieve savings from bulk ordering and manage supplies, the nonprofit operates a a 258,000-square-foot distribution center where about 100 team members fill more than 12,000 orders per day from BayCare's 16 hospitals and its numerous clinics and doctor's offices across the Tampa Bay region.
'BayCare will continue monitoring the situation closely as we work with vendor partners to understand potential impacts and consider alternative sources to mitigate the effects of tariffs,' said spokesperson Lisa Razler in an email.
