See how prices change for spinal implants
There are over 200 spine product manufacturers, although the market is dominated by five main companies.
Despite initial concerns that the passing of the Affordable Care Act would inhibit growth of the spinal implant market, the additional 30 million patients receiving coverage – along with the aging U.S. population and rise of obesity – have helped the market continue to grow.
According to Millennium Research Group’s most recent report, the U.S. spine market is expected to continue to grow modestly through 2022, reaching nearly $7.1 billion.
Currently, there are over 200 spine product manufacturers, although the market is dominated by five main companies.
One-Level Cervical Plate/Screw System (one plate and four screws) - Cervical procedures account for 11% of all spine procedures completed in 2014
| Low | High | Average |
| $1,482 | $3,011 | $2,245 |
One-Level Lumbar Pedicle Screw System (two rods, four screws, set screws or collars/caps) - Lumbar procedures account for 33% of all spine procedures in 2014
| Low | High | Average |
| $3,874 | $6,878 | $5,095 |
Lumbar/T-Lumbar Interbody Fusion (one cage with four screws or a plate) - Interbody Fusions (Lumbar, T-Lumbar and Cervical) account for 33% of all spine procedures completed in 2014
| Low | High | Average |
| $6,045 | $11,045 | $8,355 |
Cervical Interbody Fusion (one cage or spacer with three to four screws or a plate) - Interbody Fusions (Lumbar, T-Lumbar and Cervical) account for 33% of all spine procedures completed in 2014
| Low | High | Average |
| $2,764 | $4,800 | $3,692 |
[Data source: MD Buyline Please note these numbers have been adjusted to exclude special deals, outliers, and unique circumstances.]
Pricing for spine implants can be negotiated in one of three ways: line item pricing, category capitated pricing, and capitated construct pricing.
Line item pricing. This approach allows purchasers to negotiate spine implants at the line item level. An overall discount from the vendor may be the simplest way to review this type of pricing. It generally is best to focus these types of negotiations on products that are used most often.
Category capitated pricing. This approach allows purchasers to lump implants into categories (e.g., interbody fusion screws) and then to negotiate the lowest price for each category. The purchaser should work closely with the vendor to create these categories and the cap pricing for each.
Construct capitated pricing matrices. Hospitals can find this approach very beneficial, if implemented and managed properly. Prior to entering an agreement with any vendor, the purchase should submit the line item details for each of the constructs in order to be able to negotiate to the lowest price available.
With any pricing matrix, it is important to clearly identify all components for each pricing category. To prevent lower-demand components from being used in higher-demand systems, the purchaser may want to state that a procedure will be categorized by its lowest-priced component.
For example, if a medium-demand component is used in a high-demand procedure, the procedure will be paid at the medium-demand price. It also is important to stipulate that these prices be all-inclusive with no additional fees allowed for delivery, freight, or loaner arrangements.
It also is always best for purchasers to seek competing bids from vendors, although sole-source agreement or market-share commitments also can provide savings. These agreements can provide access to better deals and lower pricing, but they also can limit physicians’ options.
When deciding on a commitment agreement, the best approach may be to lock in pricing during the term and to include a clause for an annual review of pricing, given that market standards and pricing can shift.
LeAnne Smith is a senior analyst at MD Buyline.
