Value-based purchasing for medical devices.

The performance of the medical device sector falls short of its remarkable potential because of weaknesses on the demand side of the market, in the way products are assessed, purchased, and used. This paper applies the core principles of value-based purchasing (integrated data on price and performance; alignment of financial incentives; and organizational capability to evaluate alternatives) to the medical device market. Emphasis is placed on the challenges posed by information inadequacies, incentive misalignments, and organizational fragmentation between hospitals and surgeons.