HospitalsReconSpine

Traditional devicemakers struggle in fast-growing ambulatory market

September 25, 2019  / TARA BANNOW 

Business is booming for the ambulatory surgery industry, but traditional device makers are having a hard time tapping into it, according to a new report from Bain & Company.

In the desperate race to cut costs out of healthcare, ambulatory surgery centers have emerged as a promising solution. ASCs performed more than half of all outpatient surgeries in 2017, up from 32% in 2005, the report found. Orthopedic, spine and cardio procedure volumes are projected to see the most growth through the mid-2020s.

Major players in the device industry, like Johnson & Johnson, Medtronic and Stryker, are going to have to change up their business models if they want to compete in the ambulatory space, said Tim van Biesen, the head of Bain & Company’s global healthcare practice. ASCs have lower reimbursement rates with payers. They’re also smaller, lower volume and more geographically dispersed than hospitals, he said.

But soon enough, van Biesen said, they won’t have much choice.

“It’s not laziness that keeps them in acute care, it’s the volume,” he said. “But as the volume moves, they’re going to have to follow the procedure volume into the ambulatory setting.”

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Chris J. Stewart

Chris currently serves as Chief Operating Officer at Ortho Spine Partners. Prior to that, he was the assistant vice president and business unit leader of Medical Device Management for HealthTrust.

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