Surgeon ownership in medical device distribution: does it actually reduce healthcare costs?

Surgeon ownership in medical device distribution is a new model that proposes to reduce the costs associated with surgical implants. In surgeon-owned distributorships (SDs), the surgeon becomes the purchaser through ownership and management of a distributorship. The purpose of this study is to determine whether significant cost savings can result from SDs.

Five existing SDs were retrospectively reviewed, and their implant pricing was compared with non-SDs. The hospital pricing for implants supplied by the SDs was compared with 2010 pricing from the best contract/capitated rate for like implants from non-SDs.

The average first-year cost savings for the SDs was 36%, with US$2,456,521 total savings in 2010. For distributorships in business for over 2 years, the average annual price from the SDs actually decreased by 1.41%.

This study demonstrates that SDs are capable of providing substantial healthcare savings through lower implant costs and reduced annual price escalations.