Health Care Trends: Cost Control Measures in Full Swing
Affordability drives medical devices purchases and use. Even the most remarkable devices can see a tremendous downturn in usage is reimbursement is lowered. That's why an an annoucement that CMS is considering changes to coverage of certain medical procedures is making device company CEOs more than a little nervous.
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The economic recession has forged tighter bonds between hospitals and their group purchasing organizations. Medtech interviews Novation LLC's president and CEO Jody Hatcher, who has set an aggressive tone in dealing with device manufacturers.
The effects of the current financial crisis are becoming more apparent in the health care arena, where payors, providers, suppliers and everyone else involved in the industry re-evaluate their respective strategies. Medical suppliers must rethink the way they get their products into the hands of physicians and clinicians. And hospitals, reeling from the increased cost of doing business, must find ways to address the challenges of uncompensated care, rising staff costs, and increased equipment expenses.
In the current credit crisis, the widely held notion that health care is a recession-proof industry is being put to the test. The pretext has been that no matter how poor the economy becomes, people will still need medical treatment, and private and public insurers will still have money set aside to pay for those treatments. Although there's some validity to that oversimplification of health care as a business, it doesn't take into account the real fuel that keeps any business running--the availability of credit. While medical supply manufacturers may be in a better position than many companies in other industries, hospitals, which purchase those medical supplies, are not faring as well. That should be a concern to all.