By John Strong, Co-Founder, Access Strategy Partners Inc.
With all the data out there, Frontiers© wants you to stop and ponder a few numbers we unearthed in the past couple of months.
Smart orthopedic implants are on the horizon, and at a cost estimated at $20,000 each. In fact, CMS has already aligned certain incentives for monitoring a patient’s joint replacement procedure to reimbursement. Developers say these are a sure-fire way to help improve outcomes. How will you evaluate this technology? The same article notes that the number of total knee replacements will grow from 1.4 million in 2025 to 3.4 million in 2040.
A January 2015 Forbes survey indicated that 24% of medical device manufacturers reported the biggest challenge in their business was “managing geopolitical risk.” We would argue that with rising tensions with China and Russia, that number is already growing exponentially in 2022. Healthcare providers need to seriously consider this risk with regard to their procurement strategies this year. In fact, the value of U.S. imports from China for pharmaceuticals and medical equipment, products and supplies reached $20.74 billion in 2019. Our foreign relations issues include “supply chain disruption and (reduced) manufacturing capacity,” according to Paul Keckley. How dependent is your supply chain on Chinese-made ingredients and finished goods?
As of January, between 8,000 and 12,000 containers containing medical supplies were being held up at U.S. ports. While we hope at press time the number will be lower, the fact is that this has caused shortages of commonly used, relatively inexpensive medical products that has driven prices higher. For example, there are currently plenty of aluminum crutches available at $40 per pair, but none at current contract prices of around $14 per pair. Is your sourcing strategy pivoting to the new realities of supply and demand beyond price alone? Are you considering the carbon-footprint of these cheap supplies or willing to pay more for U.S. made products?