Rethink Your Medtech ASC Strategy, Part 1.

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Author: Maria Shepherd
Date: Jan-Feb 2021
From: Medical Product Outsourcing(Vol. 19, Issue 1)
Publisher: Rodman Publishing
Document Type: Article
Length: 1,267 words
Lexile Measure: 1450L

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COVID-19, procedure cost, surgeon-owned ASCs, and decimated capital expenditure budgets are all causing hospital and ASC practice managers to rethink healthcare delivery as well as the purchase of medical devices and equipment. ASCs have adopted a strategy to focus on predictable, low-risk procedures with lower complication rates in an out-of-hospital setting. The cost of the procedure is considerably less, with charges that are 35 to 50 percent lower than hospitals. (1) It is a huge savings for U.S. healthcare, by a projected $40 billion a year. This is the engine that drives ASC growth, creating 5,700 ASCs in 2018, 23 million procedures, and $35 billion in revenues (Table 1).

Why This Is Important

We recommend all our medtech clients include investigation of an ASC strategy for their commercialization and product development plans, especially for a disruptive technology. It is easy to focus on traditional hospitals because they dominate most procedures. Don't miss the ASC and its unique needs as you create your launch plan.

By 2017, ASCs penetrated more than 50 percent of all outpatient surgeries. This is an increase from a 32 percent penetration rate in 2005, and is expected to grow by an average 6 percent per year through 2021, a significant increase from the 4 percent CAGRs seen between 2015 to 2018. Cardiology, orthopedic, and spine procedures are expected to grow at the greatest rates. Since ASCs are more price sensitive, pricing pressure is increased for medtech due to the lower reimbursement rates for ASCs. ASC-based physicians (often owners) are far more price sensitive than hospital-based physicians, who may not have the same level of skin in the game. It's not easy to create a sales plan for ASCs because they are smaller, often independent, with lower revenue potential and sometimes located outside of major metropolitan areas. This increases the cost of distribution and selling, making medtech marketing and sales plans more expensive...

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Gale Document Number: GALE|A652003857