Collect artificial joints into the hospital, whose cake is cannibalized? Who is the biggest winner?

Image source @ Visual China

Text | Vb arterial network

After April 15, the artificial joints of the second single collected by the state began to enter the hospital from the negotiating table. Artificial joints have moved from the era of ten thousand yuan to the era of thousands of yuan.

A patient in Ordos cost more than 30,000 yuan for artificial joint surgery four months ago, while she only cost 4,000 yuan for another leg artificial joint implant in April.

The sharp decline in surgical costs has led to the growth of the volume of artificial joint surgery in China, and some doctors said that the amount of artificial joint surgery increased significantly in April. Patients who have not been able to operate in the past due to price factors can also undergo surgery.

But for doctors, the admission of artificial joints after collection brings more uncertainty. On the one hand, it is a direct impact on income, although artificial joints are implemented at the price after collection and harvesting in many parts of the country, only some provinces have adjusted the price of the projects for doctors to perform surgery.

On the other hand is a change in the service model of the past. In an artificial joint surgery, the role of the manufacturer is not only the provider of artificial joint consumables, but also the manufacturer is indispensable in the preoperative training, surgical tool provision, postoperative disinfection and other links of orthopedic surgery. After the artificial joint collection, the profit margins of manufacturers and distributors are compressed, is there any incentive to provide professional services other than high-value consumables?

For enterprises, the butterfly effect of artificial joint collection has begun to slowly unfold, and its impact on the market is more profound than price reduction. The experience of vascular stent collection tells the market that the winning bid result is far from the end of the enterprise game. What will happen to the qualifying race between companies in the orthopedic artificial joint collection?

Under the gradual approaching of the national harvest of the spine, the arterial network conducted interviews and analysis on the impact of the collection of artificial joints after entering the hospital, trying to explore the new changes and new enlightenment of the market.

How the butterfly effect of price cuts is changing the industry

After the collection of artificial joints into the hospital, the decline in doctors' income and the number of patients' surgeries, these changes are still within the expectations of practitioners in the domestic orthopedic industry.

After the implementation of the national artificial joint belt collection policy, the average price of artificial hip joints has dropped from 35,000 yuan to about 7,000 yuan, and the average price of artificial knee joints has dropped from 32,000 yuan to about 5,000 yuan, an average decrease of 82%. As a selective surgery, after learning about the artificial joint collection, most patients choose to postpone the operation after the artificial joint collection is admitted to the hospital.

But even as the volume of surgery increases, doctors' incomes suffer. In the past, the doctor's income from an artificial joint was about 1,000 yuan, and the price reduction of consumables would have a part of the impact on the doctor's income.

A doctor said that after all, the operation is still to be done, and the impact on income is relatively open.

The Health Insurance Bureau has also compensated for the impact on doctors' incomes, and Medicare has highlighted the value of medical staff's labor services by adjusting the price of artificial joint surgery projects. For example, in Ordos, the Ordos Municipal Medical Security Bureau held an expert demonstration meeting on the price adjustment of artificial joint replacement projects on April 11 to demonstrate the prices of 18 artificial joint surgery projects involved, and the maximum project price increase was 1,000 yuan, the minimum increase was 300 yuan, and the average increase was 807 yuan.

However, the adjustment of project prices has only been carried out in some provinces and cities, and most provinces and cities have not yet made adjustments.

The impact of income is not the most worrying thing for doctors, after the artificial joint collection, the doctor's concern lies more in whether the service quality of manufacturers and channels can be maintained as before.

In the past, in clinical surgery, manufacturers and channel distributors needed to provide doctors with preoperative consultation, logistics assistance, follow-up guidance, cleaning and disinfection, postoperative tracking and other orthopedic products supporting professional services to meet the needs of doctors to the greatest extent.

Although the accompanying service in the national artificial joint collection is also included in the bidding scope, some manufacturers said that the price of the accompanying service in the winning bid of the collection cannot cover the cost of the additional service provided by the manufacturer.

An industry insider said: "The winning price of the artificial joint collection and procurement companion service is 50 yuan to 200 yuan, and the industry consensus is that the cost of an artificial joint surgery service fee is 1000-1500 yuan." For example, in joint surgery, power tools are needed, as well as power tools consumables saw blades, suction, bone cement and other consumables, which have been provided free of charge by manufacturers and agents in the past. A single fee of 50-200 yuan can not cover these costs at all, which may lead to a significant decline in the overall service. ”

Who will bear the additional costs of the follow-up? At present, from the perspective of local policies, some provinces and cities have introduced policies for hospitals to bear this part of the cost.

In the documents of Tianjin Municipality, Fujian Province, Hainan Province and Hunan Province on the implementation of centralized procurement of artificial joints, it is clear that the cleaning and disinfection of non-dedicated power tools and related tools is borne by medical institutions, and the relevant costs are included in the cost of medical services. The price of the accompanying service includes only the compliant "follow-up" service, assisted assembly tools, necessary tool usage guidance, surgical operation training, etc.

The second major concern is the enthusiasm of manufacturers to carry out clinical education in the future. In China, the training of doctors in the field of surgery is basically led by manufacturers. It is undeniable that the manufacturer provides a large part of the specialized education and doctor training services for doctors, including exchanges at home and abroad, domestic exchanges, and some surgical training.

Every year, domestic orthopedic leaders invest hundreds of millions of yuan in market education and training. Weigao Orthopedics prospectus and annual report disclosed that the sales expenses in 2020 reached 630 million yuan, and the sales expenses in 2021 reached 740 million yuan, an increase of 110 million yuan over the same period last year. The reason for the increase in sales expenses of Weigao Orthopedics is to strengthen the expansion of sales channels and the development of secondary hospitals, and increase online and offline medical education and training. Chunli Medical, another joint leader in China, has a sales cost of 340 million yuan in 2021, an increase of 41.92% over the previous year.

It is true that domestic orthopedic enterprises carry out online and offline promotion activities such as conferences and academics on the one hand in order to enhance the influence of products and promote products and therapies. But on the other hand, it also provides systematic support for domestic doctors and has become an important part of the education and training of domestic doctors. After the collection and reduction of profits, the motivation of manufacturers to provide market education is insufficient, and whether the relevant education and training can be continued in the future is also a major problem.

Collection and mining break the old rules, and the new order needs to be established in exploration, and in the new development, the industry pattern is also slowly changing.

How to reshape the market landscape

The most direct impact of artificial joint collection is that the market space is compressed, and the cake of the entire industry has become smaller. However, with the landing of the collection, the way the entire industry divides the cake and the enterprises that share the cake will also change.

Judging from the existing landing situation, the collection may change the proportion of the segment in the artificial joint market; and many participants in the artificial joint market in the past will also have enterprises slowly out.

In the artificial joint collection, the hip joint is divided into three products: ceramic to ceramic, ceramic to polyethylene, and alloy to polyethylene based on the friction joint interface. Ceramics is one of the most wear-resistant materials of all materials, wear is very small, so there are fewer particles produced, hip replacement pottery to pottery greatly reduces wear particles, pottery to pottery hip joint is also the most expensive artificial hip joint, pottery to poly is second, gold polymerization price is the lowest.

In the past, in the artificial joint market, the market share of tao to pottery, pottery to poly, and gold to poly was not much different. The price and profit changes brought by the collection may change the dosage of different artificial hip joints.

An artificial joint manufacturer analyzed: "In the collection, all product prices have dropped, Tao to the pottery hip joint manufacturer quotation at 8000 yuan to 9000 yuan; Tao to poly poly manufacturers mostly in the 7000 yuan quotation, there are also the highest winning bid price to 8000 yuan." However, there is a gap between the cost of these two products, the cost of pottery to pottery may be six or seven thousand, and the cost of pottery to poly products is lower than that of pottery to pottery products. The price reduction of the collection changed the gross profit margin of both products. It is possible that manufacturers will not mainly promote pottery to pottery products in the clinic, but mainly promote pottery to poly products. ”

In the past, in the domestic artificial hip market, gold parapolymerization is the most used product, pottery poly market proportion ranks second, pottery to ceramic market proportion ranks third, but the difference in the amount of several products is not large. The gap in dosage after collection and harvesting may become larger. The industry generally believes that Tao has become the product with the largest amount of use for gatherings, and this trend can also be seen from the reports of various winning companies.

In overseas markets, tao versus poly is also the most used product, on the one hand, because although the clinical effect of tao versus poly is not as good as that of tao versus pottery, it is also good enough to meet clinical needs. On the other hand, it is because Tao has a high degree of acceptance of poly products and a greater tolerance for surgical techniques. Collection and procurement may promote domestic consumption to be closer to overseas.

It also has the opportunity to become a catalyst for the development of other market segments, accelerating the rapid development of the small joint market such as elbow, ankle and shoulder joints.

At present, the domestic small joint market volume is dozens of times different from that of the United States, and the gap is far greater than the gap between the hip and knee markets.

In the United States, there were more than 1.7 million hip and knee replacement surgeries in 2018, and the number of hip and knee surgeries in China did not reach 1 million. However, in the United States, the number of shoulder surgeries has reached more than 100,000 units, and the number of shoulder surgeries in China is only about 10,000; the number of ankle surgeries in the United States has reached 20,000 units, while the number of ankle surgeries in China has reached only a few hundred. In the small joint market, the domestic market still has great potential for development.

The growth rate of the small joint market is also much higher than that of the hip and knee markets. Collection and mining may become an accelerator of the joint market, and the more refined joint market will achieve rapid development.

As an important segment of orthopedics, the change of the artificial joint market pattern involves the game of multiple forces, and the formation of the new market pattern is a new balance reached by the multi-force game. Under the new balance is a fierce game between enterprises.

Domestic who will be the real winner

Referring to the experience of cardiac stent collection, the result of winning the bid for a while is not the final win or loss, and the winning bid is not once and for all, and there is still a situation of losing both at a low price and a price. In the winning market of artificial joints, how will domestic enterprises play the game?

For artificial joint collection, it will generally be divided into two camps: import and domestic, but from the perspective of check volume, the imported first-line brand market is still relatively stable.

An industry insider said: "If from the total amount of point of view, there are nearly 30 domestic bidders, there is no doubt that domestic production can get a larger amount." However, the winning bid of imported first-line enterprises is very good, with large quantities and high prices. ”

For domestic enterprises, the competition between domestic enterprises is also quite fierce. Although the domestic leaders have won the bid, there are also low-price winning enterprises. Although some domestic enterprises have won the bid in the whole line, the product price does not have a great advantage compared with that of imported enterprises.

In general, the first-line enterprises in the imported enterprises are more dominant, and the domestic products will also expand their market share in the collection, and whose cake will be finally divided?

Industry insiders said: "The easiest to get out are imported second-tier brands and brands with weak domestic products. Because when the collection of price factors affecting product selection is flattened, in the end, the market is still choosing products, and the advantages of enterprises with stronger product strength will be more obvious. ”

In the artificial joint collection game, it is worth mentioning that the non-winning market space of artificial joints cannot be ignored. There is also a certain space in the orthopedic artificial joint collection market, which is quite different from the stent collection market.

First of all, the purchase volume of artificial joints is based on the data of 2020, and the compound growth rate of the domestic artificial joint market in 2015-2019 is 20.65%. The share of aggregate reporting volume is 90% in 2020, but as the market grows, the volume of non-winning markets is even larger, and it is expected to account for 20% of the market share in 2021.

The space of the non-winning market is mainly affected by two factors, one is the payment standard for products that have not won the bid stipulated by the local medical insurance bureaus, and the other is the selection criteria for the products that have not won the bid. These two points are greatly affected by policies, and the policies currently issued by various places are different.

Across the country, most provinces and cities have the highest price of products that have not won the bid, but Fujian Province has given a more relaxed policy.

The medical insurance payment standard for non-selected artificial joints in Fujian Province is set at 25,000 yuan / set, and individuals within 25,000 yuan are included in the scope of medical insurance payment after paying 20% of the first, and are paid according to the provisions of basic medical insurance, and the part exceeding 25,000 yuan is paid by the patient. The medical insurance payment standard for non-selected artificial joints will be gradually adjusted to no higher than the maximum selected price of the selected products in the same group within two years in accordance with national regulations.

The payment standards and selection criteria for the follow-up non-winning markets have yet to be introduced by more provinces and cities.

Artificial joint collection has also catalyzed the heating up of the field of orthopedic digitization, and orthopedic joint surgery robots have become the pipelines that domestic enterprises have laid out. Domestic minimally invasive, Kuanyue medical and other enterprises have increased their investment in the research and development of surgical robots.

With the landing of artificial joints, the national organization of medical consumables collection and collection of "third single" orthopedic spine has also entered the specific implementation stage. Domestic orthopedic consumables manufacturer Weigao Orthopedics previously said at the investor exchange meeting that compared with standard joint surgery, spinal surgery has higher requirements and greater risks for operators, and the National Medical Insurance Bureau will seek the advice of experts and may adopt rules that are more relaxed than joints.

But just as the artificial joint collection and landing brings us the same feeling, until the end, the result is undecided. Gathering is not the last journey of domestic enterprises. Perhaps there is no period of orthopedic enterprises have a stronger sense of distress than the current situation, policies are changing, rules are changing. However, the goals of a number of domestic enterprises have not changed.

As an orthopedic artificial joint company said to Arterial Network: "In a market as large as a global artificial joint, there is still no influential Chinese brand. Domestic enterprises still have to take a long road. ”