Earlier this year, HHS secretary Sylvia Burwell announced that by 2018, at least half of all Medicare payments would be made through programs that put providers at risk for quality, cost, or value. On the heels of that announcement came another by the Health Care Transformation Task Force that also vowed by 2020 to move at least 75% of their payment arrangements from fee-for-service payment models to alternative payment models and value-based payments. The task force is a coalition of some of the largest healthcare systems, insurers, and employer groups.

These organizations recognize that the current business model for healthcare is no longer sustainable and are actively committed to moving to value-based care. As they make this transition, they’re experimenting with many new models for payment and care delivery, such as ACOs, PCMH, bundled payments, and population health. Key to success will be developing ways to gain control of variation in cost and quality. In order to ensure the organization is delivering the best outcomes at lowest cost, they’ll look closely at treatment protocols and products used, and make decisions that are in the best interests of their organization and populations served. As these changes unfold in the delivery environment, there will be significant implications for many parts of the device manufacturing business, starting with the sales approach, the structure of health system deals, and the management of key relationships.