Growth Trends in the US Healthcare System: What % are FFS vs ACOs?

It is a trend we all want to see.

What are the percentages of payments and covered lives in ACOs vs. FFS? And, what does this mean to medtech in the overall trend of value-based care (VBC) payment models that assess outcomes and focus on population health strategies?

Health insurers like Aetna, Anthem, Cigna, UnitedHealth Group report reimbursing 50% or more of their medical claims via value-based payment models. Aetna, Cigna and UnitedHealth Group are three of the top ten health insurers in the US [1], so this trend is one that we expect to see expand to most commercial insurance plans in the US. And for once, commercial insurers are at the head of the pack, far beyond Medicare.

Since 2011, the number of ACOs has grown from 70 to 923 in early 2017 [2]. That is an impressive CAGR of 44.5%. These 923 active ACOs cover more than 32 million lives, which pushes the number of covered lives to more than 10 % of the U.S. population [3].

These data were found in articles from Forbes [4] on the medtech industry push for a modification in federal anti-kickback regulations that would to permit medical device companies to share in the transition from FFS-based medicine to VBC.

Medtech can help patients find the best care in the best place, for the best amount and at the best time. Will these trends keep patients out of the hospital, if medtech shares risk with physicians and hospitals?

Innovation and VBC care is always about Identifying new spaces and unmet needs

Medtronic has launched the Control Workflow system in the United States for use with its SynchroMed II intrathecal drug-delivery system as an innovative VBC product. Chronic pain is a state where patients are in a nasty cycle of spiraling doses of opioid medications with little to no improvement in pain management or quality of life. This makes the patient segment that is taking high dose oral opioids with low efficacy or those who can’t tolerate oral opioids the model patient population for the new Medtronic system. The Medtronic device is implanted under the skin to deliver medication into the intrathecal space of the spine. While many pain management applications such as neurostim are designed to treat the chronic pain patient after a problem with drug misuse has surfaced, Medtronic’s goal is to get to the potential opioid abuser before opioid misuse becomes an issue and early results look good [5].

Looking for an innovation partner? Contact us. Our last three projects were:

  • Medtech product strategy development: legacy product in a commodity space

  • Medtech price sensitivity analysis

  • M&A third party analysis




[3] Ibid