Stryker CEO sees orthopedics moving to ASCs — But how fast?

During the first quarter earnings conference call, Cowen and Company's Joshua Jennings asked Stryker CEO Kevin Lobo his opinion on whether orthopedic surgeries and total joint replacements will move to ASCs.

Stryker, which has provided knee, hip and spine implants to orthopedic surgeons for years, has recently begun to sell the Mako robotic technology for joint replacements more aggressively over the past 12 to 18 months. Mr. Lobo mentioned earlier in the call that ASCs are purchasing the robotic technology to use in cases with commercial payers and there could be opportunity there in the future.

During the call as transcribed by Seeking Alpha, Mr. Jennings asked whether the migration of orthopedic procedures was a risk to the knee and hip market. "I guess, overall, how are you thinking about the potential transition impacting the market?"

Mr. Lobo acknowledged the transition to ASCs is still in the early stages and CMS isn't paying for total joints in the ASC, although select commercial payers are.

"I think you've read, I am sure, in USA Today about other procedures that were moving to surgery centers, and I think there has been a significant backlash based on some bad outcomes," Mr. Lobo said. "So it's really difficult to predict. I think it is a trend for the future. I think more and more procedures will move. But predicting the pace of that change is going to be tricky, especially if you have bad outcomes that will certainly stall it."

Mr. Lobo went on to say the American Hospital Association was conservative on the issue and AdvaMed wasn't taking a "strong stand" on either side. "If the procedures migrate and they are done safely, that's fine with us," he said. "We really just want great patient outcomes, and if they end up moving to the surgery centers, we really don't see that changing the dynamic of the demand for the procedures, and we don't think that competitively causes a problem."

Finally, he noted that the current migration of orthopedic procedures hasn't negatively impacted Stryker's business.

More articles on outpatient orthopedic surgery:
4 qualities of ideal outpatient TJR candidates
The Orthopaedic Institute names 4 new executives
Anterior hip replacement in the ASC: 7 key questions with Dr. Andrew Wickline

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