Healthcare systems are costly in many countries, and hospitals have always been one of the major cornerstones of the healthcare industry. Medical supplies expense is an increasingly substantial category of hospital costs. In China, the expense of medical supplies is being controlled at the hospital level. Different from drug prescription, medical supplies utilization is not being standardized or guided by clinical guidelines. In order to achieve the goal, many hospitals directly disable the use of the most expensive medical supplies. One missing piece in consideration is the patient heterogeneity, which decides the medical necessity for a specific surgery/procedure and the associated medical supplies requirement. The other challenge is to justify the substitutability of the medical supplies being replaced. In this study, we explore a clinical similarity based framework to analyze the inpatient medical supplies use records and detect unnecessary utilization. More specifically, the inpatient stays are clustered based on patients' clinical conditions. After clustering, inpatient cases within each sub-group should have similar clinical necessities and therefore similar medical supplies utilization patterns. Thus the unnecessary medical utilization can be identified and the cost reduction suggestions can be provided accordingly. This framework will be illustrated though a case study of 3-year inpatient records from a Chinese hospital.