By Martin Li,
M.A., CRCST, CER, CIS, CHL
Introduction
Improving decision-making on trauma
implant products, which encompass an estimated 275,000+ devices, can be
daunting for today’s healthcare supply chain professionals. However, the gains
to be had with better contract management are certainly worth the effort, given
that these devices typically total about 65% of an OR’s operational expenses,
holding the potential for substantial cost savings and efficiency gains
(Schneller & Smeltzer, 2006). For instance, it is estimated that
restricting orthopaedic implants to two suppliers can yield cost savings of 40%
to 50% off of the national price list (Appleby, 2020). Thanks to analytics, it
is now possible to greatly simplify contracting and value analysis processes to
identify implant alternatives and compare costs more accurately. Without the
help of today’s robust analytics capabilities, healthcare organizations are
destined to leave millions on the table, not to mention foregoing valuable
process efficiencies realized by having greater visibility into the complex
trauma implant product category (Burns, 2014).
Industry Snapshot
Figure 1 Trauma is by far the biggest category, with the
2024 global market estimated at $11.29 billion.
According to Vantage Market Research,
the global orthopaedic implant market is projected to reach $61.88 billion by
2030 (Vantage Market Research, 2023). Trauma is by far the biggest category,
with the 2024 global market estimated at $11.29 billion. At a compounded annual
growth rate (CAGR) of 6.4%, the trauma implant category is expected to reach
$21.24 billion by 2034 (Vantage Market Research, 2023). Some key factors
driving orthopaedic trauma device market growth include:
- Increases in fractures due to sports
injuries and auto accidents:
Approximately 6.3 million fractures occur each year in the U.S. This
number is only expected to increase, especially as more health-conscious
individuals participate in alternative sports activities that can result
in injury. Implants, which are evolving from being inert to taking on the
form of the bone, are commonly necessary for bone fixation (Schroeder et
al., 2012).
- Osteoporosis in the aging population: Approximately 10 million Americans have
osteoporosis. It is estimated that 54 million Americans with osteoporosis
or low bone density — or half of adults age 50 and older — are at risk of
bone fractures. This is driving demand for trauma devices specifically
designed for elderly patients (Cosman et al., 2014).
- New implant materials: Ongoing research, specifically for
load-bearing zone fractures, is pointing toward greater use of alloys with
slower degradation rates and enhanced mechanical strength to improve
patient outcomes (Zhang et al., 2019).
- 3D Printing technology: This trend is creating a noticeable
surge in 3D-printed orthopaedic trauma implants for personalized
applications using polymer filaments for fused deposition modeling (Yasa
et al., 2019).
While it is safe to say that the
orthopaedic trauma market is booming in industrialized nations, a lack of
awareness could slow growth in underdeveloped economies. Additionally, the
market faces hurdles due to increasing product recalls and post-surgical
complications (Miller & Spilker, 2000).
Feeling the
Industry’s Pain
Making financial sense of the sheer
volume of orthopaedic trauma implants in use today is perhaps the greatest pain
point for organizations wanting to maximize their implant resources. A lack of
insight into product features and cost variations makes it difficult to
evaluate the range of products and reduce the number of vendors to effectively
negotiate volume pricing (Burns, 2014). Without reliable insights, it is very
difficult for healthcare organizations to standardize around a core selection
of products, which would create more operational value. While price typically
accounts for 50% of the decision-making equation around trauma contracting, the
other 50% comes from inventory, product utilization, product waste, and
education (Johnson & Flynn, 2015).
Of course, making the decision to
switch vendors also brings with it a host of management and logistical
challenges. Because trauma is a complex service line, it requires immediate
availability of products and easy replenishment management. Lack of time and project
management resources can make the transition to a new vendor seem overwhelming
(Cram & Greene, 2011). A robust implementation plan should provide
data-driven inventory management, product materials, and comprehensive medical
education offerings that identify in-service needs at all levels (Kuhne et al.,
2016).
How Predictive
Analytics Can Help
In the age of big data, predictive
analytics may well be the next frontier to better manage orthopaedic spend
beyond typical pricing and contracting strategies. For instance, leveraging
analytics to review trauma implant usage provides a valuable snapshot of where
an organization is relative to its total spend, helping to inform decisions on
where to reduce and standardize specific product types (Sun et al., 2018).
Whereas analysts may lack consistency in product knowledge, resulting in blind
spots in contracting decisions, predictive analytics can be used to uncover
patterns from historical information, leading to rapid adjustments that
optimize resources and reduce expenses (Kuhn & Hadar, 2019).
Ultimately, fresh insights also give
healthcare supply chain professionals greater negotiating power to lower
pricing on orthopaedic trauma implants while identifying specific types of
implant products that may offer larger opportunities for cost savings (Unger et
al., 2016).
Leveraging this level of intelligence
gives organizations the ability to:
- Drive standardization
- Evaluate technology
- Analyze spending and utilization
- Impact prices
- Optimize inventory
- Identify pathways to contracting goals
- Define correct product category inclusion
(Kc & Terwiesch, 2009)
Analytic platform filters, compares,
and analyzes critical data to pinpoint unique challenges and deliver a tailored
analysis of an organization’s trauma and extremities portfolio, generating:
- Total spend by product, procedure
category, and vendor
- Procedural volume
- Inventory utilization
- Technology comparisons
- Inventory recommendations
(Porter & Lee, 2013)
This results in:
- Clear, actionable insights to enable
informed and confident decision-making
- Opportunities for standardization within
the Trauma & Extremities category
- More resource bandwidth to streamline
workflow
- Technology comparisons and inventory
recommendations
(James & Savitz, 2011)
How Customers Are
Using Analysis Platforms
Customers are utilizing analysis
platforms to:
- Create requests for proposal (RFP)
- Support conversations with vendors
(especially if there is an issue)
- Maintain compliance and market share
commitments
- Develop pricing strategies
- Identify waste
- Improve utilization
- Promote efficiencies
(Murphy et al., 2018)
To date, approximately 1,500
organizations from 49 of 50 states have provided device data, including 93
teaching institutions and 160 Level 1 or 2 trauma centers. All told, this
reflects 13M+ units submitted and 21 trauma fellowships. Platform users have
generated more than 2,000 reports and realized 12% operational and financial
savings, which is only expected to increase as the platform continuously
improves with additional functionality and insights (Bates et al., 2014).
Beyond this, other benefits have
included:
- Product standardization
- SKU reductions
- Greater visibility into spending and
waste patterns
- Actionable paths to optimize contract
value
(Cutler & Scott Morton, 2013)
Analytics platforms simplify complex
service lines like orthopaedic trauma, making them easier to navigate. At the
very least, customers simply want to understand their business, including where
they are spending their dollars, across which categories, and with which
vendors. Whether they want to assess savings opportunities, view procedural
volumes, analyze utilization, uncover waste, evaluate inventory, or review
contract compliance during a business review, analytics platforms offer a
variety of use cases (Mandl et al., 2012).
One of the most powerful components of
the platform is the real-time conversion guidance, which helps balance
physician preferences with health systems’ goals and objectives. If the goal is
to increase savings, minimize off-contract spend, or achieve higher compliance
levels, analytics platforms can condense six months of effort into just six
minutes of conversation (Topol, 2019). Most importantly, customers receive
their own data back in a clean and accurate format for further validation
(Cresswell et al., 2013).
The Future of
Analytics
What does the future look like for
healthcare using the power of analytics? According to the NIH, the American
healthcare system is at a crossroads, and analytics is expected to play a
pivotal role in the future. However, as an industry, the NIH sees healthcare
facing numerous challenges to the application and use of analytics, namely the
lack of standards, barriers to collecting high-quality data, and a shortage of
qualified personnel to conduct analyses (NIH, 2020). Greater usage is
ultimately expected to consistently improve healthcare delivery, as well as
management of public reporting and data sharing (Weiner et al., 2011).
What can organizations expect to do in
the future with ever greater levels of knowledge derived from the increasing
use of analytics? They can anticipate:
- Enhanced predictive models for patient
outcomes
- Improved resource allocation
- Streamlined supply chain operations
- Greater financial sustainability
(Adler-Milstein
& Huckman, 2013)
Analytics and AI technology
applications are transforming how healthcare systems navigate the volume and
cost of trauma implants. By leveraging data-driven insights, healthcare
educators and professionals can make more informed decisions that lead to cost
savings, improved patient outcomes, and operational efficiencies. The future of
orthopaedic healthcare, empowered by analytics and AI, promises to be more
efficient, effective, and responsive to the evolving needs of patients and
providers alike (Huesch, 2013).
Conclusion
The integration of data analytics and
AI technology in managing orthopaedic trauma implants is a game-changer for the
healthcare industry. By harnessing the power of predictive analytics,
healthcare organizations can navigate the complexities of trauma implants,
reduce costs, and improve patient care. The benefits of adopting these
technologies are clear, from enhanced decision-making capabilities to
significant financial savings and operational efficiencies. As the industry
continues to evolve, the role of analytics will only become more critical,
driving the future of healthcare towards a more data-driven, efficient, and
patient-centric approach.
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