Value-Based Pricing is gaining attention in MedTech, yet real-world implementation remains limited. I recently shared four key papers with a client that highlight both the promise and persistent barriers to scaling VBP in healthcare procurement – ranging from outdated pricing models to structural challenges in hospitals.
Insights
MedTech Pricing: Why Value-Based Procurement Still Struggles to Scale
Recently, a client asked me to share some relevant literature on Value-Based Pricing (VBP) and the latest trends. My message was clear: It’s the talk of the town and has been for years—yet, VBP still struggles to scale.
While VBP has been widely discussed, scaling it in healthcare procurement remains a challenge. Hospitals, payers, and suppliers recognize the need to align pricing with patient outcomes, yet implementation barriers persist.
📚 I recommend my client to read this 4 papers, which provide some key Insights on Value-Based Procurement in MedTech
Value-Based Procurement Is a Growing Focus
O. Cavlan et al. (McKinsey & Company & Co., 2018) show that VBP can drive significant cost savings for healthcare systems, yet many MedTech firms still rely on traditional cost-plus pricing models.
The Need for Clear Frameworks in Value-Based Payments
M.H. Lopez et al. (Health Affairs, 2020) propose a structured framework for value-based payment models in MedTech. While hospitals and payers support the concept, the shift from fee-for-service to outcome-based payments is progressing slowly.
Technology Is Driving New Pricing Models
V. Peiffer et al. (Journal of Medical Devices, 2019) highlight how AI and machine learning are now being used to measure MedTech value beyond unit sales—factoring in long-term patient outcomes and cost-effectiveness.
Barriers to Scaling VBP in Procurement
L. Lefers (University of Twente, 2023) identifies major roadblocks in adopting VBP at scale, including lack of trust, data-sharing issues, and short-term cost focus. Even hospitals that support VBP struggle with implementation due to rigid procurement structures.
Feel free to reach out if you’d like to explore how to implement VBP effectively—whether in your product development strategy or as a healthcare procurer looking to drive better value through procurement
🔗 McKinsey & Co. (2018): Delivering Value in MedTech
👉 https://lnkd.in/dTVFgQzs
🔗 Health Affairs (2020): Framework for Value-Based Payment Models
👉 https://lnkd.in/dtAPt2hv
🔗 Journal of Medical Devices (2019): Tech-Driven Pricing Models
👉 https://lnkd.in/dSjAXgyS
🔗 University of Twente (2023): Barriers to VBP in Procurement
👉 https://lnkd.in/d_MeHj7x
