Reimbursement structures across Europe create challenges for orthopaedic braces and supports manufacturers

A rapidly ageing population, the increasing trend toward non-invasive treatments and better disease management strategies are driving the demand for orthopaedic braces and supports in Europe.

“Demographics show that by 2020, the number of elderly will account for nearly a quarter of Europe’s total population,” says Frost & Sullivan Research Analyst Eleni Grammenou. “These changes in demographics will correlate positively with the increase in demand for orthopaedic braces and supports due to an expected rise in the incidence of age-related conditions such as osteoporosis and osteoarthritis.”

The European market for orthopaedic braces and supports generated a revenue of $502 million in 2004, which is projected to increase to $678 million in 2011, at a compound annual growth rate (CAGR) of 4.4 percent between 2001 and 2011.

Across Europe, healthcare costs are rising, placing hospitals under severe pressure to control budgets and cut costs.

As a result, greater emphasis is given on reducing recovery time for patients alongside improving quality of healthcare provision. There is also a growing trend toward non-invasive devices for prevention, treatment and rehabilitation. These factors are likely to generate significant demand for orthopaedic braces and supports.

Cost containment is, in fact, the common issue uniting the different national healthcare systems of Europe. Although management structures and healthcare systems vary from country to country, almost all their governments are adopting various measures and reforms to maximise value for money. The aim of these reforms is to curb expenditure while maintaining consistent or improved quality of service.

“All European governments are increasingly concerned about containing the costs of providing orthopaedic bracing and supports products as well as ensuring that sufficient products and quality services are offered for other conflicting healthcare demands,” says Ms. Grammenou.

The efforts of healthcare providers are likely to affect the dynamics and competitive landscape of the market as well as intensify competition. More significantly, the cost containment strategies are impacting the level of reimbursements for orthopaedic braces and supports.

Reimbursement systems in Europe vary considerably in terms of pricing, co-payments and settlements. The complexities arising out of these differences create complications for third-party payers such as private insurance companies and social security systems. These companies play a key role between the patient and the healthcare organisation selling the braces and supports.

Reimbursement in all countries, therefore, depends upon compliance with a complex set of rules and regulations. In the Netherlands, for instance, the Government has drawn up a detailed list specifying the indications for which braces and supports will qualify for reimbursement.

Similarly, France has an advisory committee for healthcare benefits – the Tariff Interministeriel des Prestations Sanitaires (TIPS) – which decides the level of reimbursement according to the economic and medical benefits that the bracing and supports are likely to provide. However, this system has come under heavy criticism for its complexity and long-winded bureaucratic procedures, especially for innovative products.

In the United Kingdom, the National Health Service (NHS), which reimburses orthotic products is coming under increasing pressure to reduce or eliminate the number of rigid knee braces prescribed for orthopaedic patients.

“The numerous reimbursement structures and regulations present in various countries affect the type of products that qualify for commissioning by government bodies,” notes Ms Grammenou. “Hence, one of the main challenges for manufacturers of orthopaedic braces and supports is to seek ways to improve market access, perhaps by developing products that accurately address market needs as well as meet European regulations.”

With cost constraints driving some hospitals to even consider re-using braces and supports, sales revenues are in danger of being affected.

Closely monitoring end-user needs is likely to benefit manufacturers in terms of clinical applications and strengthen their competitive position in the market. Addressing and exceeding customer expectations is likely to increase sales revenues and market shares.