Orthopedic implants are expensive and as healthcare organizations reevaluate costs, surgeons may face more scrutiny about their choices.
Hospitals and ASCs are either seeking a single vendor to purchase implants at a per unit discount, or reference pricing contracts with multiple vendors. Both methods can save organizations money, but the amount of savings depends on the hospital's relationship with surgeons.
Device companies can also offer rebates, package deals for advanced technology like robotics and augmented reality, or implant guarantees to entice buyers, even if physicians prefer implants from their competitors.
"There's a little bit of a 'race to the bottom' on implant margins, which is insulated in part by surgeons who resist adopting equipment they aren't familiar with or perceive to be inferior," said Thomas Myers, MD, of the University of Rochester (N.Y.). "Some of this is real, some of it is not. Each hospital will have to decide to what degree they will incentivize surgeons to adopt equipment the surgeons don't want to use."
Stanford Emery, MD, director of surgical services and chair of orthopedics at West Virginia University in Morgantown, has seen a move toward hospitals collaborating with surgeons for implant-buying decisions. He said the aligned incentives for fully employed surgeons at academic medical centers with integrated financial structures make it possible to achieve better outcomes for patients and the hospital.
"Contracting policies [for implants] in my area have swung from sole producer options and moved to some flexibility in implant options, though of course not for all industry players," Dr. Stanford said. "This perhaps does not drive the price of a given implant to rock bottom, but it keeps the surgeons relatively happy, allowing them some choices in treating patients with a myriad of complex problems."
Matthew McDonnell, MD, of University Orthopaedic Associates in Somerset, N.J., also sees value in bringing surgeons into the implant-purchasing and cost containment processes.
"Surgeons can often influence price negotiations with vendors," he said. "In the end, costs need to be controlled so that we can continue to deliver high quality, evidence-based healthcare in a sustainable way but not discourage implant companies from continuing to innovate and improve the way we surgically treat patients."
Dr. Emery thinks implant-purchasing strategies should be linked to outcomes data, which is a challenge to produce.
Alan Ng, DPM, of Orthopedic Centers of Colorado-Advanced Orthopedic & Sports Medicine in Denver, Colo., said this trend is already playing out. He is seeing more scrutiny of implant costs and hospital management teams asking why he wants to use new devices. He said it's becoming more difficult to get new technology approved by health systems.
"Many times they want evidence and clinical data on why we need this new implant, when in reality it's a new product or improvement on an existing system with no data on the improved implant," Dr. Ng said. "It's getting more difficult to use these products, because even though it will hopefully give better patient outcomes, they are usually more expensive. We wonder if at times hospital systems use the lack of data to deny the product when in reality they are denying due to increased costs."
Mark Kerner, MD, of Hampton Roads Orthopaedics, Spine & Sports Medicine in Newport News, Va., said he also has noticed hospitals becoming increasingly aggressive in cost reduction, and he said they are less concerned about upsetting physicians by limiting the choice of vendors.
"They are not worried about a surgeon going to a competitor, as they know the competition is under price pressure as well," said Dr. Kerner. "With the rise of ASCs, the hospitals are seeing that surgeons aggressively limit expenditures when it affects their own income stream. Hospitals need to try to match cost competitiveness. One way to do that is to joint venture where the surgeon has a personal stake in hospital expenses."
While costs are a major concern for hospitals and ASCs, Greg Erens, MD, of Emory University in Atlanta, said there are several factors to consider for implant purchasing.
"It's very important to keep in mind the success rate and implant survivorship of a particular implant," he said. "I do think that low cost, high performing implants will likely see an increased market share in the years to come."