Zimmer, Peers Brace for Pricing Storm

"The hip and knee business is the most lucrative segment of the market for most orthopedic manufacturers," says Melicent Lavers, senior analyst for MRG's orthopedics group. "But the hospitals are losing money on the surgeries right now. So it logically makes sense that they should do something about it."

Indeed, she says, some hospitals already have. For example, she says, one hospital managed to cap its implant prices and slash $1.5 million in costs as a result. Going forward, she believes, more and more hospitals could try to follow suit.

Moreover, Lavers suggests, the manufacturers themselves may already see the changes coming. Her colleague, Sarit Daniel, agrees.

"I think the vendors expect this is the wave of the future," Daniel says.

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