Traditional medical device companies — including Medtronic, Boston Scientific, Zimmer Biomet and Stryker — are trying to prove their worth to hospital systems looking for more than just widgets to implant to treat a variety of maladies.
No where is this more apparent than in the world of orthopedics, where scrutiny has fallen on implant prices, even as the industry has responded by pointing out that a big part of the costs of a joint replacement happen when the patient has been released from the hospital. From April this year, the bundled payment regime was instituted in 800 U.S. hospitals by which Medicare would pay them a lump sum per joint replacement for a defined period. That period of time stretches from 3 days before the surgery to 90 days after it. If hospitals’ costs are lower than the Medicare lump sum, they win. Otherwise… well you get the picture.
Acutely aware of the cost-conscious, value-driven environment, ortho companies are looking for ways to help their customers navigate value-based care. Zimmer Biomet made an interesting play last week in buying a virtual or telerehab startup RespondWell for an unknown sum.