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Five years ago, I wrote a column about what hospitals want device companies to know. The aim was to guide orthopedic vendors on ways to effectively and strategically engage with customers. I asked health system executives, service line leaders and surgeons what they believe device companies should consider when seeking to grow their business with providers. The primary theme from those conversations was that providers seek strong vendor relationships to help solve everyday problems.
Since then, the healthcare landscape has continued to be transformed by M&A activity, reimbursement changes, site-of-care procedure shifts and an overarching desire to cut costs. Still, the opportunity to build vendor/hospital strategic relationships remains. Orthopedic companies that understand and respond to their customers’ pain points move beyond transactional relationships and create partnerships with surgeons, department leadership and executive administration.
Continued Growth in Orthopedics & Spine and Site of Care Shifts
According to Donnelle Jageman, Director of Orthopedic Intelligence with Sg2, continued strong growth in orthopedics and spine will create additional opportunities for suppliers to strategically collaborate with hospitals, health systems and ambulatory care providers.
Sg2, a Vizient company, projects 13% growth in outpatient orthopedics throughout the next decade, with significant activity in several procedural areas, including joint replacement. Sg2’s 2024 Impact of Change Forecast projects five-year growth of almost 30% in elective hip and knee replacements and over 50% growth in shoulder replacements. Smaller but still significant growth is projected for hip and knee revisions, hand and upper extremity services, and foot and ankle procedures.
The robust growth in shoulder replacements is fueled by next-generation implants, emerging and innovative surgical techniques, expanding CMS reimbursement and improved outcomes. Shoulder replacements will soon occur in outpatient sites by a large majority compared to inpatient care. In contrast, many hip and knee revisions will remain inpatient, with the overall growth dampened by improvements in primary replacement outcomes and clinical advancements.
For this article, I followed up with the same people I spoke with in 2019 and asked them to share ways the vendor/provider relationship has changed and can continue to be strengthened. The perspectives include:
• Kate Gillespie, R.N., Assistant Vice President, Orthopaedics & Spine, Virtua Health
• Alok Sharan, M.D., fellowship-trained orthopedic spine surgeon and President of the Spine and Performance Institute
• Fred Slunecka, consultant and retired Chief Operating Officer of Avera Health
Their diverse insights provide a glimpse into providers’ thinkings about the role that orthopedic companies play in helping them achieve their goals and address their challenges.
Encourage Collaborative Relationships
Virtua Health opened the Virtua Joint Replacement Institute (VJRI) on its Voorhees, New Jersey campus to increase access to quality care and improve the patient experience. A strengthened vendor strategy has helped VJRI enhance transparency in the buying process and support cost reduction metrics.
As part of its journey toward a clinically integrated supply chain, Virtua transitioned its value analysis process to a product request system that incorporates physician-level analytics with accurate and actionable product data. A physician-led committee determines final approval.
Ms. Gillespie and her colleague Ana Victoria Sanchez, Vice President of Supply Chain & Support Services at Virtua, shared recent experiences and noted that the collaborative approach to product and equipment requests has led to a disciplined and structured relationship with vendors. Establishing a foundation that involves clinical and operational leaders has led Virtua to facilitate a more effective and strategic approach to service line planning while meeting daily operational and cost-effectiveness requirements.
The process was recently evaluated when Virtua considered adding robotic-assisted systems to its neuro spine service line. A comprehensive market analysis was conducted, and a multidisciplinary committee participated in the selection and voting process. The committee members included cybersecurity, clinical informatics, physicians, finance, clinical and operational representatives. Ms. Gillespie and Ms. Sanchez noted that since its implementation, results have been favorable.
The lesson of vendor engagement, they said, is to incorporate value analysis and clinically integrated supply chains. At the same time, they noted the process must also include collaboration and planning to overcome internal and vendor silos.
The decision to base vendor partnerships on mutual commitment to organizational goals and population health yielded benefits to all parties; Virtua improved the system’s financial performance by approximately $650,000 in the first year of the program. In some cases, the decision to focus on select vendors improved not only transactional relationships but also strategic, sustained and mutually beneficial relationships between Virtua and their preferred vendors.
Expand Organizational Thinking
Dr. Sharan is a practicing spine surgeon in Edison, New Jersey, and a pioneer in the Awake Spinal Fusion procedure, a novel outpatient surgical approach that does not require general anesthesia. He believes that moving procedures to ambulatory surgery centers (ASCs) can lead to improved patient outcomes and decreased costs for payors and patients. The shift in cases to outpatient settings also offers opportunities for orthopedic companies to meet the unique needs of the ASC environment.
Dr. Sharan said the comments he made in 2019 about the vendor/provider relationship remain true today. First, the evolution of outcomes-based reimbursement requires that vendors align with physicians on product quality and pricing.
“If vendors can demonstrate that their products contribute to better clinical and patient outcomes, they will be better positioned,” he said. “Patient outcomes, sometimes referred to as ‘functional outcomes,’ go beyond surgical technique and implants to measure whether the patient actually gets better in terms of less pain, more mobility, return to work and quality of life. Vendors that link their products to improved functional outcomes could represent a significant differentiator that aligns with value-based reimbursement.”
Second, Dr. Sharan said that vendors must expand their knowledge of provider needs beyond the operating room. He noted this could involve re-envisioning the role of sales reps to develop their understanding of the physician, facility supply chain and patient environments and urged companies to immerse themselves in customers’ clinics to strengthen their relationships.
“Experience gained through immersion often yields surprising insights that span patient experience, physician preference, operational throughput and financial considerations,” he said.
Engage in Collaboration and Transparency
Mr. Slunecka spent 36 years at Avera Health in Sioux Falls, South Dakota, before retiring and becoming an advisor to health systems and device manufacturers. His decades of experience, including years in the C-suite, give him a deep knowledge of what successful vendor/provider relationships look like.
Mr. Slunecka has seen firsthand how reducing the number of vendors a hospital system uses leads to greater standardization and a decrease in cost. Physician buy-in is essential for the strategy to work, he said. When Avera Health built a service-line model, it ensured that physician leadership was part of the process. Physicians were educated in healthcare economics and supply chain management and armed with decision-making power.
Clinical service line leaders were told that their job was to reduce variation of care across Avera’s system. That meant agreeing on specific vendors that the supply chain team would negotiate with and bring pricing information back to the physicians for decision-making.
Mr. Slunecka said orthopedics is a challenging service line to develop because surgeons often want to continue using the implants, instruments and technology they used in training. A portion of Avera Health’s vendor consolidation was focused on aligning EMR, CT and MRI technologies so that orthopedic and emergency room departments across their hospitals could better communicate with each other about patient records, diagnostics and multidisciplinary treatments.
The goal of the program was not to get all orthopedic surgeons to use the same hip or knee device immediately. “It’s important to take the long view,” Mr. Slunecka said. “As I brought in new physicians — the next generation of surgeons — and created new systems of care, how could I create consistency in product use so that 70% or 80% of my cases are done with one vendor and the remainder with a backup vendor?”
The strategic process to streamline the number of vendors allowed for greater purchasing transparency and boosted trust between physicians and departmental managers while creating a shared vision for reducing costs and improving quality care systemwide.
Providers also strengthened their vendor relationships by choosing companies based on their ability to understand the complete needs of the system and demonstrate that their products and services contributed to an overall improvement in care and a reduction in cost, Mr. Slunecka said.
Final Thoughts
The health system, hospital and ASC environments will remain complex as they adapt to evolving consumer needs and payor requirements. Providers will continue to seek vendors that actively invest in a partnership to increase the quality of care and assist hospitals in meeting strategic and financial objectives. Device companies that demonstrate their willingness to be active partners will be rewarded with increased market share.
To achieve this vendor status, device companies should aim to:
- Understand the ways their products work in the provider and patient environment and ways the products’ cost effectiveness assists the system in achieving its metrics.
- Build relationships with department heads and executive leaders and strive for a seat at the strategy table.
- Deliver differentiated products and services backed by data-supported insights measuring patient outcomes.
- Pursue collaborative relationships with surgeons, IDNs, supply chain and value analysis teams to learn and respond to their pain points.
Five years ago, I wrote a column about what hospitals want device companies to know. The aim was to guide orthopedic vendors on ways to effectively and strategically engage with customers. I asked health system executives, service line leaders and surgeons what they believe device companies should consider when seeking to grow their business...
Five years ago, I wrote a column about what hospitals want device companies to know. The aim was to guide orthopedic vendors on ways to effectively and strategically engage with customers. I asked health system executives, service line leaders and surgeons what they believe device companies should consider when seeking to grow their business with providers. The primary theme from those conversations was that providers seek strong vendor relationships to help solve everyday problems.
Since then, the healthcare landscape has continued to be transformed by M&A activity, reimbursement changes, site-of-care procedure shifts and an overarching desire to cut costs. Still, the opportunity to build vendor/hospital strategic relationships remains. Orthopedic companies that understand and respond to their customers’ pain points move beyond transactional relationships and create partnerships with surgeons, department leadership and executive administration.
Continued Growth in Orthopedics & Spine and Site of Care Shifts
According to Donnelle Jageman, Director of Orthopedic Intelligence with Sg2, continued strong growth in orthopedics and spine will create additional opportunities for suppliers to strategically collaborate with hospitals, health systems and ambulatory care providers.
Sg2, a Vizient company, projects 13% growth in outpatient orthopedics throughout the next decade, with significant activity in several procedural areas, including joint replacement. Sg2’s 2024 Impact of Change Forecast projects five-year growth of almost 30% in elective hip and knee replacements and over 50% growth in shoulder replacements. Smaller but still significant growth is projected for hip and knee revisions, hand and upper extremity services, and foot and ankle procedures.
The robust growth in shoulder replacements is fueled by next-generation implants, emerging and innovative surgical techniques, expanding CMS reimbursement and improved outcomes. Shoulder replacements will soon occur in outpatient sites by a large majority compared to inpatient care. In contrast, many hip and knee revisions will remain inpatient, with the overall growth dampened by improvements in primary replacement outcomes and clinical advancements.
For this article, I followed up with the same people I spoke with in 2019 and asked them to share ways the vendor/provider relationship has changed and can continue to be strengthened. The perspectives include:
• Kate Gillespie, R.N., Assistant Vice President, Orthopaedics & Spine, Virtua Health
• Alok Sharan, M.D., fellowship-trained orthopedic spine surgeon and President of the Spine and Performance Institute
• Fred Slunecka, consultant and retired Chief Operating Officer of Avera Health
Their diverse insights provide a glimpse into providers’ thinkings about the role that orthopedic companies play in helping them achieve their goals and address their challenges.
Encourage Collaborative Relationships
Virtua Health opened the Virtua Joint Replacement Institute (VJRI) on its Voorhees, New Jersey campus to increase access to quality care and improve the patient experience. A strengthened vendor strategy has helped VJRI enhance transparency in the buying process and support cost reduction metrics.
As part of its journey toward a clinically integrated supply chain, Virtua transitioned its value analysis process to a product request system that incorporates physician-level analytics with accurate and actionable product data. A physician-led committee determines final approval.
Ms. Gillespie and her colleague Ana Victoria Sanchez, Vice President of Supply Chain & Support Services at Virtua, shared recent experiences and noted that the collaborative approach to product and equipment requests has led to a disciplined and structured relationship with vendors. Establishing a foundation that involves clinical and operational leaders has led Virtua to facilitate a more effective and strategic approach to service line planning while meeting daily operational and cost-effectiveness requirements.
The process was recently evaluated when Virtua considered adding robotic-assisted systems to its neuro spine service line. A comprehensive market analysis was conducted, and a multidisciplinary committee participated in the selection and voting process. The committee members included cybersecurity, clinical informatics, physicians, finance, clinical and operational representatives. Ms. Gillespie and Ms. Sanchez noted that since its implementation, results have been favorable.
The lesson of vendor engagement, they said, is to incorporate value analysis and clinically integrated supply chains. At the same time, they noted the process must also include collaboration and planning to overcome internal and vendor silos.
The decision to base vendor partnerships on mutual commitment to organizational goals and population health yielded benefits to all parties; Virtua improved the system’s financial performance by approximately $650,000 in the first year of the program. In some cases, the decision to focus on select vendors improved not only transactional relationships but also strategic, sustained and mutually beneficial relationships between Virtua and their preferred vendors.
Expand Organizational Thinking
Dr. Sharan is a practicing spine surgeon in Edison, New Jersey, and a pioneer in the Awake Spinal Fusion procedure, a novel outpatient surgical approach that does not require general anesthesia. He believes that moving procedures to ambulatory surgery centers (ASCs) can lead to improved patient outcomes and decreased costs for payors and patients. The shift in cases to outpatient settings also offers opportunities for orthopedic companies to meet the unique needs of the ASC environment.
Dr. Sharan said the comments he made in 2019 about the vendor/provider relationship remain true today. First, the evolution of outcomes-based reimbursement requires that vendors align with physicians on product quality and pricing.
“If vendors can demonstrate that their products contribute to better clinical and patient outcomes, they will be better positioned,” he said. “Patient outcomes, sometimes referred to as ‘functional outcomes,’ go beyond surgical technique and implants to measure whether the patient actually gets better in terms of less pain, more mobility, return to work and quality of life. Vendors that link their products to improved functional outcomes could represent a significant differentiator that aligns with value-based reimbursement.”
Second, Dr. Sharan said that vendors must expand their knowledge of provider needs beyond the operating room. He noted this could involve re-envisioning the role of sales reps to develop their understanding of the physician, facility supply chain and patient environments and urged companies to immerse themselves in customers’ clinics to strengthen their relationships.
“Experience gained through immersion often yields surprising insights that span patient experience, physician preference, operational throughput and financial considerations,” he said.
Engage in Collaboration and Transparency
Mr. Slunecka spent 36 years at Avera Health in Sioux Falls, South Dakota, before retiring and becoming an advisor to health systems and device manufacturers. His decades of experience, including years in the C-suite, give him a deep knowledge of what successful vendor/provider relationships look like.
Mr. Slunecka has seen firsthand how reducing the number of vendors a hospital system uses leads to greater standardization and a decrease in cost. Physician buy-in is essential for the strategy to work, he said. When Avera Health built a service-line model, it ensured that physician leadership was part of the process. Physicians were educated in healthcare economics and supply chain management and armed with decision-making power.
Clinical service line leaders were told that their job was to reduce variation of care across Avera’s system. That meant agreeing on specific vendors that the supply chain team would negotiate with and bring pricing information back to the physicians for decision-making.
Mr. Slunecka said orthopedics is a challenging service line to develop because surgeons often want to continue using the implants, instruments and technology they used in training. A portion of Avera Health’s vendor consolidation was focused on aligning EMR, CT and MRI technologies so that orthopedic and emergency room departments across their hospitals could better communicate with each other about patient records, diagnostics and multidisciplinary treatments.
The goal of the program was not to get all orthopedic surgeons to use the same hip or knee device immediately. “It’s important to take the long view,” Mr. Slunecka said. “As I brought in new physicians — the next generation of surgeons — and created new systems of care, how could I create consistency in product use so that 70% or 80% of my cases are done with one vendor and the remainder with a backup vendor?”
The strategic process to streamline the number of vendors allowed for greater purchasing transparency and boosted trust between physicians and departmental managers while creating a shared vision for reducing costs and improving quality care systemwide.
Providers also strengthened their vendor relationships by choosing companies based on their ability to understand the complete needs of the system and demonstrate that their products and services contributed to an overall improvement in care and a reduction in cost, Mr. Slunecka said.
Final Thoughts
The health system, hospital and ASC environments will remain complex as they adapt to evolving consumer needs and payor requirements. Providers will continue to seek vendors that actively invest in a partnership to increase the quality of care and assist hospitals in meeting strategic and financial objectives. Device companies that demonstrate their willingness to be active partners will be rewarded with increased market share.
To achieve this vendor status, device companies should aim to:
- Understand the ways their products work in the provider and patient environment and ways the products’ cost effectiveness assists the system in achieving its metrics.
- Build relationships with department heads and executive leaders and strive for a seat at the strategy table.
- Deliver differentiated products and services backed by data-supported insights measuring patient outcomes.
- Pursue collaborative relationships with surgeons, IDNs, supply chain and value analysis teams to learn and respond to their pain points.
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Patrick Vega is Consulting Director for Vizient’s Excelerate and PPI Orthopedics. Mr. Vega consults to member hospitals, health systems and physicians in musculoskeletal services with a focus on high-value care by aligning cost, quality and performance.
