A Closer Look: The Disruptive Model

With rising costs and increased patient payment responsibility, there’s no doubt healthcare spending is reaching record highs. And, despite reform efforts, legislation, regulation, and technologies can go only so far in fixing the system. To truly combat the rising cost of healthcare, the focus must shift to disruptive business models, which include innovative ways to deliver existing treatments at much lower costs.

Though it sounds like a simple concept, there are a variety of hindrances preventing this type of model from being widely adopted by hospitals and providers within the orthopedic industry, including:

• Fee-for-service payment models, as well as loyalty to physician preference items and orthopedic reps, offer little incentive for providers to choose less expensive devices;

• The system is confined by mismatched incentives between providers and payers.

One promising new business model that streamlines costs is the rep replacement delivery system. By eliminating inefficiency and the often unnecessary costs accrued by device company representatives in straightforward procedures, hospitals can regain control of the OR, while saving 40 to 70 percent on primary hip and knee replacement surgeries.

It works like this: Surgical device experts train the physicians and operating room staff to perform tasks normally carried out by sales reps in primary, uncomplicated procedures. During the transition process, a trainer remains in the operating room to guide the initial procedures. Once the physician and staff are comfortable, the consultant signs off on the training, but remains available as needed to help with any complications or questions that arise; this leads to significant time and money savings because existing hospital staff can perform duties previously completed by device representatives.

So why aren’t all hospitals on board? The greatest challenges are getting hospitals and physicians to realize the mutual benefits of becoming economically aligned, and helping surgeons consider other device options, rather than those associated with a strong relationship with a specific company. But once both parties come to understand the benefits and agree to share in the cost savings, the disruptive model can help hospitals and surgeons achieve clinical, operational and economic alignment, all while maintaining the highest standards with quality products.

Want to learn more about the advantages of adopting the disruptive model? Check out this article from Healthcare Finance News around the importance of looking to the disruptive model to benefit all stakeholders, including patients.