Increasingly Value-Focused US Medical Imaging Market Redefines Vendor-Customer Relationships
Vendors and providers initiate shift to shared-risk agreements and long-term technology partnerships, finds Frost & Sullivan
Vendors and providers initiate shift to shared-risk agreements and long-term technology partnerships, finds Frost & Sullivan
MOUNTAIN VIEW, Calif., Nov. 30, 2015 /PRNewswire/ -- The fee-for-service reimbursement model that has been the norm in U.S. medical imaging is on its way to becoming obsolete. The increasingly popular accountable care payer-provider contracts are set to phase out existing payment models and, in their wake, alter provider-vendor relationships. The shift to value-based, outcomes-based or quality-based payments will push forward new purchasing frameworks in the medical imaging space, focusing on value, risk-sharing and long-term technology partnerships.
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Analysis from Frost & Sullivan, Development of Value-based Imaging (http://bit.ly/1SlQQHn), finds the greater focus on value-based purchasing will eventually touch every segment of the imaging provider spectrum and may become the standard in five years.
For complimentary access to more information on this research, please visit: http://bit.ly/1Pq0bQN.
"According to the current consensus, more than one in seven imaging procedures in radiology and one in five imaging procedures in cardiology will already be reimbursed as part of bundles in 2016," said Frost & Sullivan Transformational Health Principal Analyst, Nadim Daher. "This advent of new payment models is already affecting the top and bottom lines of imaging providers, and will deeply impact the way customers assess imaging vendors and invest in imaging technology, thus encouraging new methods of working with vendors through enterprise-level deals."
In fact, nearly one in two imaging facilities are experiencing the rising influence on purchase decisions of enterprise stakeholders such as the C-suite, hospital management, financers and IT that do not belong to core imaging departments. Each stakeholder at the decision table has an agenda, priorities, and a set of key performance indicators (KPI) that imaging vendors need to commit to improving.
In a growing number of deals, this commitment is actually being contractualized. In fact, as payers continue to put healthcare providers more at-risk through accountable care models, large healthcare institutions are initiating discussions with imaging vendors regarding the feasibility of sharing some of the risk, as well as some of the profit.
Furthermore, unprecedented consolidation in the healthcare provider and payer markets is starting to reflect on the addressable market as well. A smaller pool of larger customers will compel vendors to rethink, if not revamp, their value proposition. Redesigning cross-modality solution packages and consultative sales approaches around value and outcomes will not be an easy task, especially for established imaging vendors.
"Vendors need to re-think their sales approach and value proposition to secure a position as the vendor of choice in each modality, as well as take more ownership of their customers' KPI," noted Daher. "They will need to exhibit higher pricing transparency, offer ROI modeling tools and provide best-in-class analytics capabilities to help customers rationalize imaging investments and quantify imaging outcomes."
A number of high-profile, long-term vendor-customer alliances have started emerging in the U.S. medical imaging market, not unlike the new-generation of managed equipment services (MES) contracts being signed in various countries in Europe. These win-win technology partnerships are a solid step towards the re-alignment of incentives across the imaging value chain.
Development of Value-based Imaging is a Market Insight that is part of the Advanced Medical Technologies (http://ww2.frost.com/research/industry/healthcare/advanced-medical-technologies) Growth Partnership Service program. This Insight, based on a survey of enterprise, imaging, clinical and technology stakeholders, outlines the implications of value-based pay models on imaging vendors. It captures current market status and charts the evolution of the transition from the fee-for-service paradigm.
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