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Impact of economy starting to be seen in Europe’s orthopaedic segment
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From cutbacks at hospitals to the financial challenges private clinics face, the worldwide economic crisis that hit the world in 2008 has slowly but significantly impacted our daily orthopaedic practice. Across Europe, the focus on the financial crisis has been different from region to region. Some countries have focused on efficiency and the push to increase productivity for the same or less cost. Other countries have discussed the appropriate indications for treatment.
Health care expenditures are a large portion of a nation’s overall budget. Everyone is expecting increased pressure to reduce health care costs and increase efficiency. Some nations have already introduced significant change by reducing what types of drugs can be used and the number of operations allowed.
However, until recently, orthopaedic surgeons in Europe have not felt the effects of the financial crisis enormously. The overall fear is there will be major changes in orthopaedic activities, including patient care, research and education. Restrictions in surgical volumes and the significant pressures on product pricing will also cause some operating challenges.
Per Kjaersgaard-Andersen
Those who provided comments for this article noted that the uncertain business environment is making it difficult for companies to commit to long-term structures and head count. There has been reduction in force announcements from multiple companies in the health care sector and it is estimated the impact from 2011 to 2013 will be a 5% reduction of employees. Furthermore, we may see a relocation of manufacturing and research and development out of Europe and into emerging markets.
Tough economic times coupled with significant recalls in the medical device sector are leading to new challenges to bring new products to market. It will be more expensive and slower to introduce new technologies. This additional burden adds to the already strained financial situation, however, such pressure may have a positive outcome. The duty of responsibility to prove the economic value of products will shift to the manufacturers going forward. In the interim, this will likely result in denial of access to new technologies, or at least some significant rationing. However, we should see better value propositions for new products longer term.
There is a lot of conflict between different countries’ competent authorities, health care associations and industry over the regulation of surgical products. The likely impact will be less clinical decision-making by individual surgeons and more restrictive protocols imposed for treatment options.
The distrust we are starting to see between individual member countries may lead to a fragmented system of product approval and post-market surveillance in Europe, which will further burden industry. It is unclear whether there will be any consolidation of adverse event reporting or continued country-based reporting.
The tough times have only just begun. However, as orthopaedists, we must take action to assist our politicians to prevent unbearable disasters.