Value-based Healthcare - Overview, Status and Benefits

In this mm.Blog post, we intend to share our understanding on one of the rising important topics of healthcare industry – value-based healthcare or VBHC. We will  summarize and share an overview of why VBHC is becoming more and more popular in recent days. Our insights are based on the research done, through reviews of various literature, online articles and industry insights.

Definition of value in the context of healthcare

Providing high quality health benefits for every Dollar or Euro spent is one of the most important goals for any healthcare system. Improving patient outcomes is what finally matters. Economic sustainability of healthcare can significantly improve when value benefits can be achieved for patients, payers, providers and suppliers. Value should define the framework for performance improvement in healthcare. Porter ME., 2015 defined ‘Value’ in healthcare as the patient health outcomes achieved per dollar spent.

VBHC is more concerned with quality than quantity of care. It can be defined as a healthcare model based on compensation for outcomes. This system differs from the traditional fee-for-service (FFS) or quantity of care system. In traditional systems, medical providers are on a pay per use type of compensation structure.

Why Value based healthcare is gaining popularity

According to research from Boston Consulting Group (BCG), VBHC approaches deliver higher-quality patient outcomes at the same or lower total cost for a given condition. VBHC is gaining momentum as the proliferation of technologies and capabilities in health care informatics make it possible to collect outcome data and to share the information broadly with clinicians and the public.

Some of the results are:

    • Patients know with greater certainty which physicians and hospitals deliver better care at the same or lower cost, as well as which drugs, procedures and medical devices would work best for them.
    • Payers reimburse based on outcomes and push therapies towards care delivery with better outcomes.
    • Providers compete based on achieved medical outcomes, thereby attracting more patients, referrals and payer support.
    • Suppliers take a more holistic approach, strategically selecting where to play and what to offer to improve outcomes.

For a successful example one can name OrthoChoice in Stockholm, one of the first big scale bundled payments in the world. In 2008, all major hospitals in the county of Stockholm signed the contract for a bundled payment for low-complex hip and knee replacements. The bundle includes the full cycle of care, from pre-operation to follow-up and complications that occur as a result of the surgery. This way, the bundle rewards reduced levels of complications and infections. (source: VBHC-Thinkers-Magazine 2019)

A comparison of progress across countries

In Europe, Sweden has been named the leading pioneer in VBHC in a study by The Economist in 2015 and 2016. Many organisations are actively implementing VBHC, such as the University Hospital in Uppsala and the Sahlgrenska University Hospital in Gothenburg. Sweden’s national registry has been one of the key drivers.

According to an assessment conducted by BCG for VBHC implementation, Sweden emerged top on list, followed closely by Singapore, while Germany and Hungary came in last. The BCG maturity-assessment framework uses four success factors to evaluate a country’s progress toward value-based health care on two broad dimensions: “Clinical engagement”, “National Infrastructure”, “Data quality” and “Outcomes based initiatives”.

The chart below combines a top-down assessment of a summarized factor national enablers of VBHC (clinician engagement and national infrastructure) with a bottom-up assessment of data quality and use at existing disease registries across 12 major health conditions. It maps countries and their progress in these general factors.

Going into more detail, a country’s performance on each criterion is rated on a scale of 1 to 5, with 1 representing low readiness and 5 representing best practice track success factors, as well as a score for overall readiness, which is the unweighted average of all 35 criteria. In this approach, Germany is at the bottom of the list, owing mainly to limited access to high-quality data and poor data utilization.

The diagram below displays the average score in the four broad categories to track the success factors, as well as a score for overall readiness.

Benefits through VBHC strategy

Several benefits come from the introduction of a VBHC strategy to all the involved stakeholders, such as patients, healthcare providers and payers, as well as to society. VBHC models offer better health outcomes to patients, reducing the costs associated with the full-care cycle, such as those related with hospitalizations and use of medical resources. In these models, healthcare providers (e.g., physicians, pharmacists and nurses) are more efficient in delivering and managing patient-oriented care and more likely to engage patients in achieving the recommended goals. In this way, patients could reduce attributable risk factors, through prevention and awareness campaigns, and achieve better early clinical outcomes by receiving early diagnoses and/or targeted therapies. Consequently, healthcare systems are less constrained in terms of costs and the required investments are more realistic and effective, focused on specific needs. The following visualization shows the relations and activities among relevant stakeholders. (source – Redondo, P et al., 2019).

Added value by medical magnesium

Through our product platform mm.X, medical magnesium is contributing to VBHC strategies in collaboration with stakeholders so that more value can be provided to the patients. Our vision is to significantly improve surgical therapy of patients avoiding the gap between the patients’ desire for best treatment and the general focus on cost reduction:

  • Improving the quality of care for a target patient population requiring surgical treatment eliminating risks of a required intervention (risk of infection, rehabilitation, time off work).
  • Appropriately reducing the costs, growth in expenditures of payors without reducing the quality of care for a target patient population requiring surgical treatment.

The majority of treatments for fractures are currently using conventional metal implants (e.g. plates, screws and nails). These implants used to be made of stainless steel or titanium, requiring a removal surgery in many indications.

With the help of advancement in product research, medical magnesium has introduced the mm.X platform of products based on magnesium technology to combine stability and bioabsorption. The technology makes removal surgeries obsolete, as the fracture gets stabilized to full recovery before the implant dissolves in a controlled manner. In several in-vivo trials, mm.X has shown good results, which indicate a potential rollout to more products. Therefore, we believe in contributing to a VBHC through our mm.X implant technology.

Author: VR/FC

Vos, D.I. and Verhofstad, M.H.J., 2013. Indications for implant removal after fracture healing: a review of the literature. European Journal of Trauma and Emergency Surgery, 39(4), pp.327-337.
Redondo, P., Ribeiro, M., Machado Lopes, M.B. and Gonçalves, F.R., 2019. Holistic view of patients with melanoma of the skin: how can health systems create value and achieve better clinical outcomes?. ecancermedicalscience, 13.
Soderlund, N., Kent, J., Lawyer, P. and Larsson, S., 2012. Progress toward value-based health care: lessons from 12 countries. The Boston Consulting Group, ed. Valuebased Health Care.
Porter, M.E. and Guth, C., 2012. Redefining German health care: moving to a value-based system. Springer Science & Business Media.
Nilsson, K., Bååthe, F., Andersson, A.E. and Sandoff, M., 2017. Value-based healthcare as a trigger for improvement initiatives. Leadership in Health Services.
Porter, M.E., 2008. Value-based health care delivery. Annals of surgery, 248(4), pp.503-509.

We are happy to host Marc Ebinger, Co-Founder&CEO of RIMASYS, a Cologne-based Surgical Education startup for this mm.Blog episode.  Together with thoughts of one of medical magnesium’s founders, Kilian, we hope you find a good read on the topic of founding and running a medTech startup in Germany and the German healthcare ecosystem.

You are both based in NRW, RIMASYS in Cologne and medical magnesium in Aachen: Establishing a healthcare startup in NRW, what is your experience? What were your success factors?

Marc: “After living in Cologne for over 10 years I would recommend all young talent to try out the spirit of the open-minded and dynamic Rhineland. In addition to the high quality-of-life, more than 10 million people are living and working in the Rhine-Ruhr area. There is a high density of universities and business opportunities. NRW is very Start-Up friendly. The success factors of our region are the clinical networks here and the vibrant city of Cologne attracting brilliant talents from all over the world. As the Rhine-Ruhr is located in the heart of Europe, we have three international airports which are reachable in less than one hour. We attract healthcare professionals from all around the world developing with us new educational tools and MedTech innovations in our training center CADLAB Cologne.”

Kilian: “Our background spinning out of the RWTH Aachen university combined with the Rheinland mentality, one helps one has been a key element of becoming, what we are right now. We received support by many of the RWTH research institutes, the RWTH innovation and finally the university clinic of Aachen has become a reliable partner. The high level of education and availability of applicants for open positions, from a skilled manufacturing engineer to PHD in neurobiology at our Aachen location, was and is a crisp success factor. This enables us to build up our smart and pragmatic team at medical magnesium around the translation of latest research into surgical theatres.
Biomaterials take long breath as bio absorption needs to be validated in long term efforts. You only have one shot, as any other development cycle takes too long. Aside from collaboration with the University, I would name the collaboration among the endless list of strong MedTech companies in NRW a success factor. Even If competitive, we established partnerships with a mindset of: Big ocean – lots of fish, there is room for many trawler,  which I believe in personally.”

What is your take on German healthcare in worldwide competition? If you could forward one message to Mr Jens Spahn what would it be?

Marc: „German healthcare is more and more under cost pressure. Due to the DRGs hospitals need to shorten operation time. Additionally, keeping with the work time law surgeons in training have reduced hours used to train procedures in the OR. Thus, less number of cases and routine. This has the impact of lowering quality of skills and therefore increasing costs for post-treatment of unsuccessful operations. Every patient should have the right to get treated by experienced surgeon. With all the simulation possibilities, hands on training should be outsourced from the operation room like in other disciplines. Such as the aviation industry where pilots learn all relevant skills in a flight simulator. Training and simulation must be reflected in the DRGs and surgeons need support for outsourced training simulation without risking the patient’s outcome.“

Kilian: „The German healthcare market is characterized by a very low-price level, but high volumes compared to other countries in the EU. Compared to the US or Japanese market, it catches few economical industry attraction. But there is an astonishing number of medical experts, so industry focuses on education and convincing opinion leaders of their respective technology, with a possible fast rollout in the language cluster Switzerland, Austria, and Germany. Therefore, the German market is still of significant importance for most companies.
There is another very important characteristic of German healthcare. My message to Minister Spahn would be: Establish new and speed up existing reimbursement routes for more cost-effective patient treatment with evident clinical data. The German reimbursement system leads to a low price level, but at the same time prevents fast spreading of innovative patient treatment as very long procedural time schedules and a lack of clear responsibilities have become routine. For example, a resorbable trauma implant for children surgery with a possible total cost benefit (through eliminating removal surgery) takes several years for a general reimbursement route after it has stated its clinical effectiveness.”

Kilian, medical magnesium is producing medical implants with a very “hardware” based business model. How do you compare the German Medical technology Center Tuttlingen and your location in Aachen NRW for a medical device start-up?

Kilian: „Tuttlingen has an incredibly experienced workforce and know-how at the companies there. Sometimes it is hard to identify the right partners because most of the knowledge is not marketed and intangible. As medical device company, we have reliable partnerships with a network of companies around Tuttlingen. They offer support in many of our „daily“ requirements as an implant manufacturer.
Still, I would not consider relocating or opening a branch in Tuttlingen. Our approach at mm, sometimes naive, helps to pursue and further develop ideas with a very open minded and young team. Tuttlingen and the impressively successful companies there already lack skilled young professionals, probably mostly reasoned in its remote location and beautiful nature. Accessing and collaborating with companies in Tuttlingen from our base in Aachen, with all the benefits I mentioned above, seems to be the best pick for medical magnesium.“

Marc, the RIMASYS group is further looking into digital business models around surgical education, such as your Surgical Island platform. If you think through internationalization, is opening a US entity in the Silicon Valley an option for you or would you prefer more traditional clinical hotspots such as Boston or Houston with the impressive TMC infrastructure?

Marc: „We will always keep our roots in the vibrant city of Cologne as all our team enjoys the Kölsch lifestyle and the openness of the culture here. As the US market is in our focus over the next couple of years, we are already building up all the basic infrastructure and partnerships to address the special needs of the North American market. We would prefer more the clinical hotspots as the intense and dynamic work and the close collaboration with all the Healthcare professionals is in our DNA. To become the Go-To platform for surgeons and healthcare professionals we need the digital talents. Surely it is not just the Silicon Valley where we can offer them a harmonious working and living culture.“


Rimasys GmbH is a technology-driven health-tech start-up, founded as a university spin-off in 2016. Core of the Cologne based company are proprietary biomechanical algorithms describing injury mechanisms, utilized to generate lifelike fractured anatomical specimen with closed soft tissue mantle. Rimasys is focusing on enhancing surgical education and improving patient outcomes by advancing practical skill training and medical device development. Further innovation is focused on digital health, artificial intelligence, and virtual reality. The growing team of 35 young and ambitious professionals is aiming to build a disruptive eco-system of solutions at high pace enhancing surgeon education and interaction. For more information, visit

Planning and performing clinical studies in times of COVID-19

Clinical studies are an important tool to generate clinical data during medical device development and its time on the market. The data being generated and declared as clinical data are safety and performance data of the medical device. Prior to CE certification, these data are required to demonstrate the conformity with certain regulatory requirements. However, even after the product has been placed on the market, manufacturers are obliged to actively collect clinical data for vigilance purpose to further surveil the product’s safety and performance initially demonstrated in a pre-market situation. These post-market clinical data reveal the product’s safety and performance during regular practice and allow to identify and evaluate undiscovered risks to continuously update the benefit-risk assessment over the device’s entire life cycle. One way to actively collect clinical data under real-life conditions is to carry out Post-Market Clinical Follow-up studies (PMCF studies).

The current pandemic has a profound impact on the planning and preparation of clinical studies. In order to successfully run a clinical study in times of COVID-19, sponsors have to think about alternative strategies and spend increased effort on forward planning.

Increasing digital networking activities

To conduct a clinical study, one of the first tasks is to recruit participating study sites. Conferences and symposia are particularly important for attracting medical partners and building up a network. They offer a good opportunity for manufacturers of medical devices to present their products and to meet physicians and important key opinion leaders in person to establish valuable contacts. In times of the corona pandemic, such events are impossible and were converted into a digital format. Even though this new format is now well accepted, it offers only limited networking possibilities. In order to provide adequate information and to facilitate networking, we make a special effort to present ourselves well on social media platforms and on our company’s website. To proactively expand our network of clinical partners, we continuously contact promising clinics and investigators by phone or e-mail to introduce our company, our products and (pre-)clinical research activities. Furthermore, we established the possibility to be actively contacted using if there is an interest regarding to a cooperation or participation as a clinical study site. We come back to requesters as soon as possible.

Overcoming limitations due to travel and visitation restrictions

Due to the limited travel and visitation possibilities, personal on-site meetings in clinics to present study projects or discuss study questions are also highly restricted. Fortunately, digital meeting formats also offer a remedy here and are actively used by us. However, travel and attendance restrictions also affect ongoing clinical studies. For example, study subjects may no longer be able to attend to the planned data collection visits, and clinical monitors may no longer be able to visit the study centers. The latter must verify that the study is being conducted and data collected properly as part of on-site quality assurance. Although the presence of study subjects is required for certain examinations by the investigator at the study center, we recommend remote monitoring whenever possible to best ensure data quality independent of on-site visits.

Of course, study subjects might also be infected by Covid-19 or must be quarantined as a precaution. An infection impairs the health of the study participants, may affect generated data and prevent further participation at the clinical study. A quarantine might also prevent the subject from participating on planned study visits at this time. As a result, Covid-19 has a strong influence on data quality and the completeness of data sets.

Whenever possible, we thus recommend obtaining study data from quarantined subjects by phone at the scheduled time if no medical examination is planned as part of this study visit

How to deal with surgical restrictions

Due to the ongoing pandemic, many employees in hospitals must carry out new medical tasks in order to provide sufficient care for the large number of corona patients that are admitted and require appropriate treatment. This is accompanied by the postponement of non-essential surgeries to save resources, especially affecting clinical studies with implants intended for sport injuries as these kinds of surgeries are often postponed. Thus, study relevant data are not collected in the scheduled time. In addition, the massive restriction on team sports might reduce the incidence of certain sports injuries in the light of further patient recruitment. In order to achieve the best possible recruitment rate, we therefore recommend recruiting enough study centers to reach the target number of study participants within a reasonable period of time.

Consider an impaired rehabilitation of patients

Finally, there is also the risk that essential post-operative rehabilitation and physiotherapy after surgery may be impaired by corona restrictions. Manufacturers who initiate clinical studies in times of COVID-19 and whose data to be collected may be affected by inadequate rehabilitation measures, should take this into account. Hence, we suggest the possibility to inquire whether the rehabilitation of the study participant was carried out as intended for the respective indication or not. This information will help to interpret the collected data correctly.

With the help of these alternative methods and approaches, Sponsors might be allowed to plan and conduct clinical trials in the best possible way by successfully counteracting some of the major limitations caused by the COVID-19 pandemic.

Author: CC

MDR moratorium: A halftime report

In 2017, the European Commission has agreed on and published a new regulatory framework for medical devices to substitute the present Medical Device Directive, thereby increasing the scrutiny on medical device manufactures and supply consistent and practicable rules EU-wide. 

In the beginning, the MDR was often understood as a major burden for both established and new medical device companies due the increased requirements for pre-clinical data and post-market surveillance. Originally, manufacturers of medical devices were given a three year transition period until May 26th 2020 to duly adapt their internal processes and products to the new regulation. 

During the transition period, however, it became clear that the MDR is not only a challenge for manufactures, but that notified bodies and competent authorities themselves encountered a variety of obstacles as well leading the entire transition onto a rather rocky road. In late 2019, only a small fraction of notified bodies was designated for MDR due to a significant delay within the designation process. The MDCG (Medical Device Coordinating Group) was also way behind their schedule for relevant guidance documents intended to clarify and substantiate the European Commission’s expectations on how to follow the new rules, and the European database for medical devices (Eudamed) seems to be delayed by a matter of years even. And then: Covid-19. 

European Comission deciding for a 12 month extension

As a result, the European Commission decided to extend the transition period by one year. This extension period has now reached half time, but still: only 17 out of 48 notified bodies that have applied for designation until recently have actually been designated yet.[1] In addition, although quite a number of guidance documents has been published already, the list of guidance documents under development is constantly growing. While there were 30 MEDDEV guidelines available under the MDD, more than 40 MDCG guidances have been published up to now – some of them have already been revised – and another 36 documents are currently on the schedule.[2] In summary, it appears that a lot of open questions and uncertainties are still to be addressed even half a year after reaching the original MDR-deadline. 

Logically, the Medical Device Regulation (MDR) has been the main topic among medical device manufacturers from all divisions for the past years now and with its implementation still in progress, the debate on how the elevated expectations for quantity and quality on clinical data will actually affect the industry still lives on. Of note, the transition from MDD to MDR comes with considerable costs for established manufacturers not only in regard to the time and personnel required for implementing the changes, or the increased service fees from the notified bodies, but especially in regard to the revised general safety and performance requirements (formally: essential requirements). A recent survey from a German EDC service provider indicates that medical device companies spend approximately 5% of their annual revenue for MDR compliance alone.[3] It has thus often been feared that a considerable number of products will drop out from the market – especially those for orphan diseases and rare conditions – for their manufacturers to cope with the rising costs and that innovation of new products decelerates due to this increased level of required clinical data, making the life especially difficult for young businesses and start-up companies.  

Our approach at medical magnesium

Being founded in 2015, our team at medical magnesium was faced with the upcoming regulatory changes early onWe implemented the future requirements into our current proceduresanticipated the need for sufficient clinical data on our MDR projects early on and allocated our resources accordingly. This allowed us to dynamically render our process to the respective needs and shift our focus even on short notice. Half-time through the transition, we thus managed to achieve our first main goals as a medical device company on the fly by receiving the CE mark for our first devices under the MDD. Our believe in procedural dynamics and open discussion among all company departments (from development to clinical affairs) allowed us to anticipate the MDR moratorium early on and specifically guide our resources onto certain projects to speed up the process of product validation and certification. As a result, we had been able to draft and submit the complete technical file for our latest mm.X implant, the mm.CS, early before deadline and have finally received the CE mark for our third class III implant. 

Being able to achieve these goals during this rather turbulent time of MDR transition and the ongoing health crisis not only fills us with pride. It lets us believe that small business can certainly stand their ground in the MDR regulated medical device market and allows us to face the future confidently. 


Author: MG 




Mechanics of resorbable magnesium: Overview among implant materials

Mechanics of materials are characterized in certain parameters such as utimate tensile strength, elongation and more. This a very engineering focused way of describing features. In trauma care other features are highlighted:

• Bending resistance until breakage of the fracture plate,
• Easy and controllable insertion of screws,
• Torque resistance of the screw drive before the screw drive is rounded,
• Safe and stable bone fragment repostioning and many more.

As magnesium is a light metal and the use as biomaterial is relatively new, we will think through some implant design features and compare it to existing implant materials.

General implant material comparison

A lot of the material behaviour and the derived implant behaviour can be read in the Tension-Elongation Diagram. We have brought an actual exemplary test result from our lab:

The x-axis describes the elongation of the material, the resulting tensile strength is displayed on the y-axis. The tensile strength is displayed in measured Force divided by the cross section of the rod. The unit of the resulting tension is Newton (Force) by Section (mm²) or N/mm².

To visualize this: A force of 500N (Meaning the gravity force of appr. 50kg) applied on a rod with a diameter of 2mm would result in a tension of 500N/ (1mm²*π) = 166 N/mm²
In this example, a 2mm magnesium rod can withstand the gravity load of 100kg or 1000N before plastic deformation starts and it begins to deform. Up to this point it will always return into its original geometry (like a spring). Loads above this limit result in a plastic, permanent deformation.

Using fracture plates, it is of essential importance to allow small bending operations to precisely match the anatomical shape of the fractured bone. The design of the alloy behaviour must therefore leave room for a plastic deformation in a controlled manner, this can be found in the diagram in the plastic deformation after the elastic phase.

Prominent polymer materials such as PEEK display a value of 100 N/mm², translated to a 2mm rod allow a load of 30kg. Resorbable materials like PLLA or PLDLA normaly reach their limit at around 50 N/mm². Biocomposite materials, such as used by most sports medicine companies, even reach lower limits as the mixed ceramic material such as ß-TCP further weakens the structure.

In comparison to resorbable materials, modern surgical permanent titanium materials reach out to 800-1000 N/mm² with the known usual possibilities of bending manipulation., which allows a downsizing of trauma implants. In comparison cortical bone reaches up to 250 N/mm².

The mechanical resistance of magnesium is in the middle in between polymers and titanium materials. In comparison to polymers, which are favorable to break instantly (ductile behaviour) , magnesium implants allow anatomical bending for a safe configuration.

Implant screws: Interface design

A trauma implant always has, in most cases, two or three, interfaces: The is the implant-Instrument interface, the so-called drive, an optional screw-plate interface and the screw bone interface.

The implant-instrument interface is incorporated in the screw head. The torque to protrude the screw into the bone is transmitted through a small surface. This results in a lot of load on this section. Polymer designs have trouble to transmit the required torque and establish a resulting compression force due to their low mechanical resistance. In comparison with titanium, magnesium implants require special attention concerning the drive design. The required insertion torques, around 1-2Nm for 2.7mm cortical bone screws, represent values closer to the mechanical limits.

As bioabsorbable magnesium screws are inserted into hard cortical bone, we only apply the more stable drive shape designs. Most of our products will feature a star shaped drive interface. In internal testing we have measured the maximum torques before screw-driver cams out and the drive is finally “stripped” or “rounded”, meaning a total failure of the interface.

In a total perspective, a mechanical chain has always one component which represents the weakest link. In screw design, this should always be the drive. The instrument (driver) shall not break, as it is expensive and possibly harmful to the user and the patient (because of possible sharp pieces). If the screw head shears off completely, a headless threaded pin is hardly removable. In comparison to titanium implants, in an “emergency” magnesium implants can be overdrilled using standard surgical drills.

As a result, the magnesium designs, require a larger drive (meaning transmitting surface) than comparable titanium implants to ensure the same usability. The maximum torque which can be applied by manual insertion is very much influenced by the handle of the screwdriver. After these lessons, we put a lot of stress on the right sizing for the screwdriver handle and have applied torque limiter whenever useful.

The world of resorption adds very interesting new aspects into the equation. We will look more closely into this in another blog post.

Author: KR