In a flat and declining reimbursement environment you must learn to manage your costs…
What are you doing to lower your costs 60-80%?
- The US Medicare and Medicaid system will be out of money to fund the healthcare needs for the emerging baby-boomer generation by 2017… Medicare is broke!
- Hospitals cannot sustain their overhead on flat, declining reimbursement rates.
- Reimbursement payments to surgeons have declined, while commissions paid to implant sales people have increased.
- Implant costs are as much as 50-80% of the total Medicare hospital reimbursement (DRG).
- The pressure on Providers is growing; third party buyers (like Blue Cross/Blue Shield) are motivating policyholders to go to low cost facilities.
- Provider must:
- Be willing to remove reps from the Operating Room.
- Be willing to purchase products and no longer take consigned inventory.
- They need to think like an owner verses a renter…
- Take the responsibility of ownership
- Train their OR staff to do tasks currently performed by sales reps. Service and support will not be compromised with a fully trained, qualified staff.
- Consider purchasing assets rather than relying on other companies to consign the instruments and implants. A provider has the most control when they are both owner and manager of assets.
- The US orthopedic implant market is approximately a $20 billion dollar industry and is dominated by 6 major device companies who control more than 90% of the market.
- All Industry leaders out-source a significant portion of their implant and instrument manufacturing to third party contract manufacturers.
- Product designs for the majority of orthopedic implants have matured, and the intellectual property protections have lapsed.
- These matured technologies comprise 75% of the implant market; we have identified these commodities as… STABLE TECHNOLOGIES.