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What the Future of Orthopaedics Means for You

Tribe offered context that you may find useful as you make sense of these disruptors.

Power shift to payors and providers

Hospital administrators and committees have largely taken away implant decisions once made by surgeons. These decisions consider several factors, including reimbursement from private and public insurers.

Tribe cited: 70% of orthopaedic surgeons are hospital employees; 73% of all hospital purchases are now covered by group purchasing organization (GPO) contracts and 14 states in the U.S. have one insurer with at least 50% market share (data released before the Aetna/Humana and Cigna/Anthem mergers announced).

Heightened regulatory scrutiny

A multitude of new regulations in the U.S. and internationally have forced companies to shift resources to support regulatory and quality compliance.

Tribe cited: Changes in the 510(k) process, UDI implementation, the now-suspended medical device tax and increased scrutiny of orthobiologics, instruments and sterilization.

Unclear sources of innovation

Conversation after conversation at industry meetings turn to lack of innovation in orthopaedics and the continual commoditization of products. Orthopaedic companies continue to focus on product line extensions and incremental updates instead of novel technologies that must undergo stricter and longer regulatory timelines.

Tribe cited: Between 2004 and 2014, orthopaedic Premarket Approvals (PMAs) dropped 8%, while 510(k)s increased 11. At the same time, venture capital has dried up, leaving a hole for companies seeking to develop innovative technology and thus squashing the once tried-and-true model of big companies buying truly innovative technologies.

New healthcare-delivery models

The push from volume to value, and specifically the advent of bundled payments, is a prime example of how orthopaedic companies can impact the focus on reducing procedure costs.

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