Orthopedic companies vie for ASC business: Stryker, Johnson & Johnson, Smith+Nephew & Zimmer Biomet's approach

Four large orthopedic device companies have launched ASC-specific services over the past year and continue to see outpatient surgery as important to their business strategy.

Here is an outline of the ASC services for Johnson & Johnson Medical Device Companies, Stryker, Smith+Nephew and Zimmer Biomet.

Johnson & Johnson Medical Device Companies

DePuy Synthes within Johnson & Johnson Medical Device Companies developed a platform to provide diverse pricing and contracting options for ASCs, as well as operational support. The company has capital programs for purchasing and leasing new equipment, rebates for ASCs, coding and reimbursement assistance, and infection risk-management services.

"We are working with our hospital and surgeon customers to enable this transition. Outpatient sites of care require cost-effective, efficiency-driven innovations, and our products and solutions support these key areas," Rajit Kamal, an orthopedic executive at Johnson & Johnson, told Becker's in January 2020. He was the global leader for the company's knee replacement business at the time, and now serves as the leader of Johnson & Johnson's orthopedic business in the Asia Pacific market. "Additionally, our commercial channels are organized to effectively support outpatient settings. Our professional education showcases how to effectively migrate joint replacements to an ambulatory surgery center and offers best practices to enable this transition."

Beyond the financial component, the company has supply chain optimization services, inventory management for ASCs and patient education tools. Johnson & Johnson Medical Device Companies also developed the ASC Speaker Series with quick tips to maximize ASC operations.

"We no longer view outpatient as an emerging site of care, we believe it is quickly becoming one of the main sites of care for knee replacement procedures, and our innovations and commercial efforts are organized around serving this site of care," said Mr. Kamal.

Smith+Nephew

Smith+Nephew launched its ASC-specific platform in August 2020 and added patient selection and care pathway tools in November. The Aria platform is designed for care coordination between the ASC, partnering physicians and patients. It provides direct feedback and reporting and is designed to reduce the cost per patient. Aria also provides patient engagement tools and can help centers manage bundled payments.

The company offers orthopedic reconstruction, sports medicine, wound management, trauma, extremities and otolaryngology products. Smith+Nephew also has robotic technology used in surgery centers. On Sept. 3, The Center for Orthopedic Surgery in Van Nuys, Calif., became the first ASC to use Smith+Nephew's CORI Surgical System for robotic total knee replacement. The system launched last July.

"Our recent launches and initiatives are still at early stages such as OR3O Dual Mobility Cup, CORI, robotics and our focus on ASCs," Smith+Nephew CEO Roland Diggelmann said during the company's 2020 earnings call on Feb. 18, as transcribed by Motley Fool. "There is a great opportunity to keep growing these and to bring them to more of the world. This will build on our improving execution across the franchises and regions."

Stryker

Stryker launched an ASC-focused business in 2020 to meet the needs of orthopedic surgery centers. The business has more than 22 procedure categories and 13,990 unique products. The company also has options for ASCs including:

· Equipment payment based on procedure volume or consumable purchases
· Deferred payment programs
· Equipment leasing
· Customized payment for equipment

Stryker will also provide business reviews to help surgery centers with future purchasing decisions.

"I'm delighted with the ASC offense [strategy] that we put in place. It involves people from different parts of Stryker that basically quarterbacked the deal and bring in multiple divisions based on the unique needs of every ASC," Stryker CEO Kevin Lobo said during the company's 2020 earnings call on Jan. 28, as transcribed by Seeking Alpha. "Every ASC is unique. Every deal is a customized deal, but the way we've negotiated this enables incredible collaboration across our divisions."

He said the ASC model has exceeded expectations in the past year and he's confident the company will have continued success with ASCs and installing Mako robotic technology. Stryker sold and installed 100 robots in the fourth quarter of 2020 across all settings and overall grew the number of installed systems by 33 percent last year. Mr. Lobo said ASCs delayed large capital spending during the pandemic, but he has observed their spending is starting to pick up again.

Zimmer Biomet

Zimmer Biomet works with ASCs to deliver orthopedic products and practice management tools. The company aims to help ASCs optimize the orthopedic service line, manage costs through the episode of care and provide patient education materials through its Mymobility app.

The company's management services include market analysis, reimbursement negotiation, clinical workflow consulting, financial programs and co-marketing opportunities. Over the past year, multiple surgery centers have incorporated Zimmer Biomet's robotic technology for total knee replacement into their facilities.

The most recent ASCs to add Zimmer Biomet's robotic technology for total knee replacements include Surgery Center of Pinehurst (N.C.), Surgery Center at Midlands Orthopaedics and Neurosurgery in Columbia, S.C., and Surgical Institute of Alabama in Vestavia Hills.

More articles on surgery centers:
After 121 hospital sales over 6 years, CHS doubles down on ASC, outpatient growth
How 3 ASC management companies envision 2021
Colorado health system building $150M orthopedic-focused hospital with ASC, medical office building

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