Devicemakers explore risk contracts with hospitals

Tiptoeing into the broader accountability movement, some of the largest medical-device manufacturers are negotiating experimental deals with hospitals to take on performance-based financial risk for their implants.

While drugmakers have been testing risk-based contracts for several years,devicemakers are just beginning to explore taking on risk for products such as pacemakers and other implantable devices. Experts say cardiac devices are a primary focus of new risk-sharing agreements under discussion, likely because hospitals face potentially lower payment rates for congestive heart failure patients. “They're aligning risk to the kind of risk that matters to providers,” said Brandi Greenberg, a managing director at the Advisory Board Company.

Experts say each risk-based contract between a hospital and devicemaker is structured differently. Some agreements may stipulate that the manufacturer return a percentage of the device's price if it doesn't meet certain performance goals or fails within a set period of time. Under other agreements, a hospital pays more for a device that fulfills a manufacturer's quality and economic claims.

Read the full story via Modern Healthcare.