Spend Management Outlook
As innovation accelerates across cardiology, orthopedics, and surgical services, health systems need new ways to evaluate technology, manage utilization, and connect clinical advancement to financial performance.
Physician preference items sit at the center of some of healthcare's most important decisions. They influence clinical outcomes, physician adoption, service-line growth, and financial performance. Yet many organizations still evaluate them primarily through the lens of price.
But that approach is hard to sustain.
Innovation is accelerating across cardiology, orthopedics, and surgical services. New technologies are expanding treatment options, improving procedural capabilities, and creating opportunities for growth. More procedures are moving into ambulatory settings, reimbursement models continue to evolve, and margins remain under pressure.
The result is a different set of decisions—and higher stakes for getting them right.
While projected inflation remains relatively moderate across cardiology, orthopedics, and surgical services, the more pressing issue is understanding the economics behind procedural care. Device cost is only one piece of the equation. Technology adoption, site-of-care shifts, reimbursement, utilization patterns, and physician alignment increasingly determine whether innovation strengthens performance or creates new financial pressure.
The question is no longer simply which technologies to adopt, but how to evaluate, govern, and scale innovation in ways that support both clinical and financial goals.
| Category | Estimated inflation |
|---|---|
| Cardiology | 2.19% |
| Orthopedic overall | 2.92% |
| Orthopedic supplies | 2.64% |
| Joint implants | 4.06% |
| Spinal | 2.12% |
| Surgical services | 2.38% |
PPI remains a major driver of procedural cost, margin performance, and service line strategy across cardiology, orthopedics, and surgical services. While projected inflation is moderate compared with other categories, organizations face growing demands to evaluate technology adoption, site-of-care migration, physician preference variation, and reimbursement complexity when aligning clinical and financial decision-making.
For more detailed projections, access the data tables for cardiology, orthopedics and surgical services as well as our methodology.
Several market forces are expected to shape physician preference item strategy in 2027:
| Market force | PPI impact |
|---|---|
| Innovation acceleration | New technologies create opportunities for improved outcomes, but also introduce adoption, governance, and cost challenges. |
| Ambulatory migration | More procedures are moving into lower-reimbursement settings, increasing focus on cost-per-case and margin performance. |
| Reimbursement evolution | Organizations face greater accountability for total episode performance rather than individual procedures. |
| Technology investment | Robotics, pulsed field ablation, personalized implants, and other innovations require stronger adoption criteria and oversight. |
| Clinical variation | Physician preference and utilization differences continue to create opportunities for standardization and performance improvement. |
1. The device isn't the only cost that matters anymore.
PPI categories are increasingly influenced by factors that extend well beyond device cost. Technology adoption, reimbursement, utilization patterns, physician variation, and total episode performance all play a role in determining financial outcomes.
That means organizations need a broader view of procedural economics—one that accounts for device selection, adjunctive product use, reimbursement, utilization variation, and downstream care costs.
2. Procedures are leaving the hospital. Revenue is following.
Orthopedic and surgical procedures continue to move into ambulatory settings, while cardiovascular ambulatory surgery center (ASC) expansion is beginning to emerge in select procedural categories.
As care moves beyond the hospital, organizations need greater visibility across sites of care, stronger contracting strategies, and tighter alignment among physicians, operations, and supply chain teams. Consider how those shifts affect margins, utilization, and long-term service-line performance.
3. The next wave of innovation will test your governance model.
Innovation continues to reshape procedural care. Pulsed field ablation, structural heart technologies, coronary drug-coated balloons, renal denervation, orthopedic robotics, personalized implants, neuromodulation, and robotic-assisted surgery all have the potential to improve care delivery.
They also create new operational, financial, and utilization challenges.
Leading organizations are establishing adoption criteria, utilization review processes, contracting strategies, documentation requirements, and total cost-of-ownership assessments before adoption accelerates. The goal is not to slow innovation—it's to ensure innovation delivers measurable clinical and financial results.
The technologies may be different across cardiology, orthopedics, and surgical services, but the underlying challenge is the same: determining which innovations create lasting value—and which simply add cost and complexity.
1. Cardiology: Innovation is changing how care is delivered—and how it’s financed.
Cardiology innovation is accelerating, with electrophysiology and structural heart technologies driving the greatest shifts in spend. Rapid adoption of pulsed field ablation, next-generation mapping systems, and growing atrial fibrillation volumes is accelerating procedural growth, while transcatheter valve therapies and emerging aortic regurgitation devices are expanding the structural heart market. Organizations should prepare for an uptick in coronary drug-coated balloons and renal denervation, which require strong clinical governance and standardized patient selection. Cardiovascular ASCs remain an emerging trend, with regulatory changes and physician interest creating new considerations for contracting, operational planning, and supply chain strategy. Operational and workflow efficiencies can optimize margins by means other than isolated focus on device costs. Room setup and throughput, anesthesia workflows, and recovery/same-day discharge pathways where appropriate can help maximize procedural volumes in both the hospital and ASC environments.
Explore deeper insights into pulsed field ablation, structural heart innovation, coronary drug-coated balloons, renal denervation, ASC strategy, and other emerging trends shaping the cardiology market in our cardiology category insights report.
2. Orthopedics: The shift to outpatient care is reshaping strategy, technology, and spend.
As more orthopedic procedures move to ASCs, organizations face increasing pressure to manage margins through standardized care pathways, implant selection, and contracting strategies. Technology is advancing with portable robotic and navigation systems designed for ambulatory settings, requiring organizations to balance clinical benefits with per-case costs. Emerging innovations—including personalized spinal implants—may improve outcomes. Health systems should monitor evolving reimbursement models, including the proposed expansion to the Comprehensive Care for Joint Replacement Model, which may further align physician preference, implant selection, and 90-day episode-based cost management. If finalized as proposed, the Comprehensive Care for Joint Replacement Expanded Model would begin Oct. 1, 2027.
Discover how ASCs, robotics, personalized implants, reimbursement changes, and other emerging trends are influencing orthopedic care in our orthopedics category insights report.
3. Surgical services: Rising cost pressures are driving surgical strategy and operations.
Margin pressures are prompting health systems to rethink how surgical services are managed across care settings. As procedures migrate to ambulatory environments, organizations are placing greater emphasis on standardization, contracting, supply chain alignment, and careful management of high-volume consumables. Participation-based contracting models, persistent supplier cost increases, and new regulatory requirements—such as surgical smoke evacuation mandates—are reshaping purchasing strategies. Organizations also must evaluate the growing role of robotic-assisted surgery, balancing total cost of ownership with utilization, operational efficiency, and clinical value.
Learn how ambulatory surgery, supplier dynamics, robotics, contracting strategies, and emerging regulatory requirements are influencing surgical services in our surgical services category insights report.
As procedural care becomes more complex and technology adoption accelerates, physician preference item strategy should be coordinated across clinical, operational, financial, and supply chain stakeholders.
| Priority | Executive action |
|---|---|
| Evaluate total procedural economics | Look beyond device cost to understand total episode performance that includes quality measures and reimbursement impact. |
| Strengthen technology governance | Establish adoption criteria, utilization review processes, and total cost of ownership assessments. |
| Improve cross-site visibility and physician engagement | Align contracting, utilization management, and physician engagement across care settings. |
| Connect clinical and financial strategy | Coordinate decision-making among physicians, finance, operations, and supply chain leaders. |
Moderate inflation does not mean lower complexity. That’s why organizations must develop a more disciplined approach to evaluating technology investments and measuring performance across the episode of care.
The systems that benefit most from innovation won't necessarily be the first adopters—they'll be the ones that understand where innovation improves outcomes, where it improves economics, and where it simply adds complexity.
Rachael Zirkelbach, Donnelle Jageman, Megan LaRose, Katherine Zentner, Josh Aaker, and Audrey Roche contributed to this article.
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Kyna Henrici is a medical evidence director at Vizient, specializing in cardiovascular technologies. She evaluates clinical evidence and emerging therapies and translates complex research into actionable insights that help healthcare organizations make informed decisions about resource utilization and patient care...
Becky LaGrone is an accomplished healthcare sourcing and category management leader with more than 20 years of experience across provider organizations, GPOs, IDNs, and national health systems. She currently leads the $8.2B Surgical Services/PPI portfolio at Vizient, where she drives category strategy, supplier partnerships, executive negotiations, member value creation, innovation pipeline development, and leadership of senior category managers...
Robert Lerman, MD, is vice president of cardiovascular category management for the Vizient clinical spend management team. In this role, he leads a group of cardiovascular experts who align value propositions for both providers and suppliers, maximizing the impact of every dollar spent in healthcare...
Alexandra Palasz is a medical evidence director—orthopedics at Vizient, specializes in evaluating clinical evidence, emerging technologies, and market trends across the orthopedic medical device landscape. With an engineering background, Palasz provides evidence-based insights that support sourcing, contracting, and technology assessment for healthcare organizations...
Senior Vice President, Physician Preference
As vice president, category management at Vizient, Allen Passerallo is an accomplished healthcare supply chain leader with extensive expertise in sourcing, value analysis and purchasing. He has held senior leadership roles at Cleveland Clinic and Johns Hopkins Health System, where he advanced value-based care strategies and delivered significant cost savings. During his decade at Cleveland Clinic, Passerallo led initiatives that...