The pricing pressure hospitals already exert over the medical device industry could get a boost as hospitals increasingly look to form alliances with physicians, according to Moody’s Investor Service.
Deals between hospitals and doctors have cut device makers out of the purchasing decision loop, especially for "physician-preference items" like stents, cardiac rhythm therapy devices and orthopedic implants, the rating agency said in a June 24 note, according to Bloomberg Businessweek.
“As hospitals increasingly provide physicians with greater incentives to control costs, they are better positioned to limit the number of vendors,” the note said, according to the magazine.
That means device companies with innovative and cost-effective products will fare better, according to Moody’s vice president Diana Lee, who noted that the downward pricing trend could be exacerbated by Medicare reimbursement rate cuts.
Late Thursday the U.S. House of Representatives sent a reprieve to a 21 percent Medicare rate cut to President Barack Obama’s desk, nearly a week after the Senate approved the measure.