Two Other Seismic Changes for Orthopedics

JP Morgan analysts identified many factors that will influence the use of medical devices. But the two that may have the greatest impact are the shift of cost and higher deductibles to U.S. patients and the Centers for Medicare & Medicaid Services’ Bundled Payments Initiative (BPI). The financial burden of healthcare still is shifting toward the U.S. patient. This will have a deep impact on American attitudes of use and expectations of the U.S. healthcare system especially for elective procedures.

BPI is a Medicare program that can have significant impact on orthopedic procedures. Under BPI, a gain-sharing program will reduce costs and increase the quality of care, and enable hospitals to distribute a portion of those savings to participating physicians. According to JP Morgan analysts, this program will most likely be more successful with acute vs. chronic care scenarios, because acute procedures, such as orthopedic surgery, are easier to define and quantify. BPI is a complex program to understand, but with orthopedic surgeons on board to reduce costs, product mix, price and use are likely to be impacted.