It's also worth noting that Congress did remove an incentive for vertical consolidation by modifying the reimbursement policy for newly acquired outpatient clinics. Congress has noticed there was a financial incentive in the way that Medicare operates and they chose to eliminate that going forward.

HCB News: What progress is the industry making in the shift to value-based health care?


DF: Our system is still dominated by fee-for-service but there is a growing percentage of value-based care. There are fee-for-service payments that are modified by a quality incentive of some sort and a more advanced form of payment reform like bundling and ACOs, which are a fairly small part of the overall marketplace.

We also know for sure that Medicare is rapidly trying to mandate the use of the more advanced techniques. On April 1 there will be implementation of a mandatory bundling program for hip and knee replacements.

That is the first mandatory program and I don't think it will be the last. There are definitely incentives out there moving in that direction.

We are going to be running with two systems for a while. We are going to have a value-based system and we are going to have a fee-for-service based system and that is going to last for years — perhaps even a decade or more.

The industry, whether it's providers or manufacturers, has to adapt to a situation in which we have multiple payment systems out there even within a single provider. That creates complications for our industry, but it's something that we have to adjust to because that's certainly the direction we are headed.

HCB News: How do the health care challenges in the U.S. differ from those in Europe?

DF: There are several commonalities — one of which is that there is an increased interest in reducing cost growth in health care. Whether we're in the U.S. or Germany or England or Belgium, you still have that similar pressure on cost and it is important for us all to be aware of.

The demand for additional data for the market access for products is something that is common across the two continents.

What is different is that the U.S. is a bit more advanced in terms of moving toward value-based care and so working in a dual system and the experiments that are going on with value-based care and the new methods that providers, payor, manufacturers are going to have to adapt to all are a bit ahead of the systems in Europe. There are countries in Europe that are watching with great interest in how the U.S. makes these adjustments.

HCB News: What do you think the biggest news stories of 2016 will be?

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