DI Payer Insights - Spinal Surgery: Current and Expected Trends in Payer Management & Reimbursement of Spinal Surgery - 2Q '15
The $12b US spinal surgery market has been marked by headwinds in the last few years as a lack of "price sustaining" innovation from the largest implant vendors and payer pushback on the efficacy of certain procedures has limited growth. Recently, these pressures seem to have eased slightly as the market has returned to low, single-digit growth.
While it is widely held that pressure on access/volumes from payers has "eased" when it comes to spinal surgery, this seems only insofar as policies and practices have not become more onerous in recent months. Certainly none of our work with payers, nor recent conversations with hospital administrators suggests that payers have loosened their policies or lessened their focus on utilization!
Thus industry participants have been rather sanguine in their outlook versus recent years. There is, however, an ominous cloud lurking in the distance that could potentially bring darker days…
The confluence of several trends (increasing cost transparency, high (going higher) deductible plans, hospital employed physicians, ACA/ACOs, and new reimbursement pilots) are giving rise to the potential for incentive disruption, the likes of which, this physician preference market has never seen. If realized, this tectonic shift will cause participants throughout the supply chain of Spine Surgery to have to adjust, sometimes radically, their way of delivering value.
In this report we explore the current payer landscape for spinal procedures with a particular focus on payer expectations for alternative reimbursement prospects in spine.
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