“Big Ortho” vs. “Small Ortho” Advantages/Disadvantages?
“Big Ortho” vs. “Small Ortho”???
It depends on what you’re looking for.
Before we break down the pros and cons of each, it might be helpful to start by defining terms.
Historically, the orthopedic device marketplace has been dominated by a small handful of companies. When people use the term “Big Ortho” they’re generally referring to the 4 largest total joint implant manufacturers, which currently hold approximately 86% of the market. Conversely, “Small Ortho” is comprised of all the remaining companies which collectively share roughly 14%.
As for which represents the better fit for surgeons, the answer may vary based on your unique situation.
There are advantages and disadvantages to both.
“Big Ortho”
Advantages
The large companies certainly have a leg up when it comes to brand recognition and awareness. If using products from a big name/market leader, is important a relatively small number of companies will fit the bill.
If you’re looking for a one stop shop that can meet most of your orthopedic needs, “Big Ortho” will probably be your best bet. While no one company has the best solutions for every situation, these large players have a tremendous breadth of product offerings.
If new product approval is a concern, working with a large company often helps to facilitate the process. All the market leaders are already on contract with every major hospital system and GPO, as well as most community/rural facilities.
Disadvantages
One downside to working with the big players can be their ability to quickly adapt to shifts in the market or individual customer needs. Much like the majority of hospital systems, and our federal government, tremendous levels of bureaucracy can stagnate progress.
A second issue surgeons often face when working with “Big Ortho” relates to pricing inflexibility. A robust market share creates leverage, and leverage allows certain companies to play hard ball on selling price. While these companies often tout workarounds in the form of rebates, demand-matching constructs, and volume-based discounts, these programs rarely deliver to the level promised.
Finally, the bigger the company the more people competing for attention and resources. Surgeons often report that the market leaders are unresponsive to their individual concerns/ideas. Feeling like a number on the sales spreadsheet is not uncommon.
“Small Ortho”
Advantages
One major advantage of working with a smaller company comes in the form of flexibility and responsiveness. The ability to adapt quickly to changes in the market and/or create individualized solutions for specific surgeons/practices can be a major asset. If you’re looking for personal attention, these companies can be a great option.
A second perk to working with a smaller company relates to pricing flexibility. The lack of a large share of the market to protect, and a desire to grow, generally makes smaller companies more willing to price products aggressively. While each company and situation are unique, when cost is a factor “Small Ortho” should at least be considered.
Lastly, smaller orthopedic companies are often the ones driving innovation. Creating dynamic product solutions is a requirement for smaller players to become and stay relevant. There’s a reason the market leaders buy “Small Ortho” companies. You might be surprised how many of the products currently being sold by the big four were innovated by someone else.
Disadvantages
One downside to working with the small players can be the lack of brand recognition and awareness. If using products sold by long established companies is important to you, then “Small Ortho” may not be a great fit. At times there is a false perception that smaller companies correlate to less reputable products. While this narrative is demonstrably false, perception can be a powerful factor.
A second challenge surgeons face when choosing to use a smaller company is hassle related to contracting/product approval. While some of these smaller companies are already established with major health systems and GPO’s, there is often additional work associated with getting new products approved. That said, approval is almost always an option for a surgeon/company willing to put in the effort.
A third potential disadvantage when choosing a “Small Ortho” company is the scope of the product portfolio. Filling out product lines takes companies considerable time and money. You’re likely to find that product offerings for each individual company will have strengths and weaknesses. In these situations, surgeons often find working with a trusted medical device broker desirable as they can help “build a portfolio” accessing options from multiple different companies.
