A market analysis report concludes that the U.S. market for prescription-based O&P devices will “grow modestly through 2022 despite each market facing distinct reimbursement challenges,” according to a press release issued by Decision Resources Group, Burlington, Massachusetts. The report, U.S. Markets for Orthotic and Prosthetic Devices 2014, covers the period from 2012-2022. Decision Resources Group attributes market growth to the expanding aging population in need of O&P care due to conditions such as arthritis, orthopedic soft tissue damage, diabetes, and peripheral artery disease.
Other key findings from the report include the following:
- The U.S. orthotic device market accounts for 90 percent of total O&P device revenues, and within that market, orthopedic braces generate a similar percentage. As a result, major orthopedic brace manufacturers such as DJO Global, San Diego, California; Össur, Reykjavik, Iceland; and DeRoyal Industries, Powell, Tennessee, are generating large shares in the overall market.
- O&P device manufacturers face significant pressure from general reimbursement reductions that will intensify as proposed cuts to Medicare continue through 2020, which is negatively affecting pricing. Pricing pressures have been further heightened by product commoditization.
- The proliferation of off-the-shelf orthotic devices has decreased demand for prescription products.
“The prosthetic device market is facing an even greater threat through 2022 as Medicare audits continue to investigate the medical necessity of lower-extremity prosthetic components,” said Brady Baker, a Decision Resources Group senior analyst. “This may result in the denial of reimbursement, and the uncertainty is leading some facilities to choose lower-cost options.
“Large competitors, such as Ottobock [Duderstadt, Germany,] and Össur, have distributed marketing literature to assist with coding and to ensure defensible reimbursement claims to deal with this hurdle,” continued Baker. “Although this strategy will help them stand out against their competitors, these audits will ultimately result in declining revenues in the lower-extremity component market.”