Readers of Orthopedics This Week voted with their collective computer clicks to tell us which stories were most interesting in 2014.
From mega-mergers to small entrepreneurs making their mark, from the antics of a dangerous rogue to the passing of a warm and generous lion of the spine world, from the new world of generics and distribution and musical chairs of device sales reps to the latest in orthopedic science, you read it all.
Here, in ascending order, are the 15 best orthopedic stories of 2014.
15. The Best Orthopedic Surgeons
Who are the top spine surgeons, knee surgeons, sports medicine specialists or hip surgeons? Asking other surgeons who they’d recommend (peer review, in other words) is one way to answer that question. And when we assembled the list of peer selected top guns, you clicked on those lists the most.
The rest of this list covers individual stories.
14. Spine IPOs Multiplying (January 31, 2014)
When K2M joined the list of spine companies going public in 2014, investors had seven spine companies on whom to place their bets. By the end of the year, the list dwindled by one as Baxano Surgical put its assets up for auction.
13. In Defense of Salespeople (August 26, 2014)
The reports of the death of the device salesperson have been greatly exaggerated. What is the role of the great medical salesperson? The granddaddy of them all, Robert Wood Johnson who was inspired by Joseph Lister, M.D., at the 1876 Centennial Exposition in Philadelphia, reminded us. From a startup firm with 14 employees occupying one floor of a factory building in 1886, Johnson & Johnson grew into an operation of several thousand workers in what was the largest factory space in the world when Johnson died at age 64.
The company went public in 1944. An investor buying $375 worth of shares back then would have J&J stock worth more than $10 million now. Since 1970 alone, the stock has rocketed 10, 000%.
12. Myths and Facts About Orthopedic Surgeon Compensation (October 22, 2014)
How a physician earns a living is increasingly subject to regulatory and physician community review, criticism and even control.
Two announcements regarding orthopedic surgeon compensation—one on the last day of September and one a month earlier—offered startling new information about orthopedic surgeon pay and how ineffective it is at delivering job satisfaction or even performance.
The first announcement was the release of the Medscape Physician Compensation Report for 2014 which looked at 25 physician specialties and ranked them in order of both compensation and job satisfaction. The second announcement was CMS’ (Centers for Medicare and Medicaid Services) release of the physician payment data base which had been collected as part of the Sunshine Act.
The Medscape report said that 56% of orthopedic surgeons would not go back into medicine. The CMS release opened a floodgate of stories about which surgeons were supposedly getting the most money. Turns out, the data was incomplete and lacked context.
11. What’s Next for Spine’s Most Notorious Rogue? (January 7, 2014)
The State of New Jersey called him “a man lacking good moral character” and a “danger to the public.”
Richard Kaul is no longer a licensed physician and the judge who presided over his three-month circus of a trial threw a 105-page book at him and said he should lose his medical license.
Kaul did not go gently into the good night, launching a massive public relations campaign to charge that the effort to take away his medical license was about constraint of trade, corrupt doctors and a scope of practice fight between traditional spine surgeons and upstart interventionalists.
Kaul was fortunate he wasn’t remanded to nearby Rahway Federal Penitentiary.
10. The Forgotten Acquisition (May 23, 2014)
Stryker Corp. bought MAKO Surgical for $1.65 billion. Zimmer Holdings, Inc. is paying $13.3 billion for Biomet, Inc. But there was another, quiet, perhaps forgotten billion dollar acquisition that worked its way to closing in 2014. Interestingly enough, this other billion dollar deal could trigger yet ANOTHER billion dollar orthopedic industry transaction.
Smith & Nephew, plc purchased ArthroCare Corporation for $1.7 billion in 2014. The deal brought together two major sports medicine and arthroscopic treatment companies, as well as tee up the other major MIS (minimally invasive surgery) firm—ConMed Corporation—and give strategic heft to two major orthopedic trends—the accelerating growth of outpatient care and MIS.
And the deal was arguably a more telling indicator of changing orthopedic treatment paradigms, shifting distribution channels and alternative care providers than either Stryker’s or Zimmer’s deals.
9. Generic Devices – It’s About Distribution (May 28, 2014)
The value of generics lies in distribution, not in manufacturing, wrote guest writer, Stephen Lichtenthal.
This has happened because of the incremental nature of orthopedic design improvements and the FDA’s low tolerance for risk. As reimbursement models change, squeezing out cost in distribution is rewarded. Because the devices are less differentiated from each other, hospitals can go back to managing their own inventory.
Removing local sales representation in conjunction with low R&D (research and development) costs creates the savings generic implants generate. Those devices can replace 80% of implants sold by conventional vendors, said Lichtenthal.
8. HSS: Sculco Stepping Down, Albert Stepping Up (April 16, 2014)
There is a new era at Hospital for Special Surgery (HSS) in New York. For 11 years, it was the vision and drive of Thomas Sculco, M.D. that led this outstanding facility to new heights. In 2014, Dr. Sculco said it was time for a change so he convinced Todd Albert, M.D. of the Rothman Institute in Philadelphia to take his place.
7. Who Will Buy Smith & Nephew? (June 14, 2014)
Investors, analysts and the ortho industry couldn’t stop talking about who would buy Smith & Nephew. That was a lot of attention for a company that was not officially for sale. While Medtronic, Inc. looked like a suitor until Covidien plc came along, Stryker emerged as the most likely bidder.
Orthopedics is morphing into an industry driven by scale economics, not innovation economics and the buyer’s ability to apply competitive pressure to orthopedic implant suppliers has become painfully apparent to all industry participants.
Size negotiates with size. Larger buyers force sellers to get larger too. No one wants to negotiate from a position of weakness.
By year’s end, Smith & Nephew was still independent and the waiting continued.
6. Stryker Reps Defect to DePuy (June 17, 2014)
Five Stryker sales reps in Northern California went AWOL on April 4, 2014. Before Stryker knew what happened, the five reps had resigned, gone over to DePuy Orthopaedics and brought their business with them. Stryker’s business was decimated in the area so they sued the reps and DePuy for damages.
The game of musical chairs for sales reps and distributors continues as the industry consolidates.
5. 11 Best Spine Technologies of 2014 (November 20, 2014)
Innovation continues to assert itself year after year as OTW’s five spine surgeon judges selected the 11 best new spine technologies for 2014. As seems to happen every year, the range and quality of submissions were excellent. More than 40 new products were submitted.
The winners included: new bone graft procedures, surgical skin closures, image enhancements, smart phone applications and software developments, better endoscopes, 3D planning tools, improved pedicle screws and anesthetic delivery systems.
4. Major Study Update: Stem Cells Ease Back Pain (May 2, 2013)
A story from 2013 of Mesoblast Ltd.’s release of a Phase 2 human study of MPCs (mesenchymal precursor cells) as an intradiscal injection treatment for back pain continued to interest readers. This was the latest in string of studies examining the ability of a certain type of stem cell to treat back pain.
Researchers injected allogeneic MPCs into damaged intervertebral discs in what is, essentially, a one hour outpatient procedure.
At six months, 71% of those patients who received a low dose of MPCs met the pre-specified treatment success criteria. By contrast, only 20% and 30% of the patients in the two control arms who received hyaluronic acid and saline met the pre-specified success criteria.
3. Smith & Nephew Goes Rep-Less With Some Hips and Knees (August 6, 2014)
Smith & Nephew announced it would cut some orthopedic implant prices in half with a “no-frills” option called Syncera that excludes logistical support or an onsite technician and replaces them with an iPad app.
The program was announced by company CEO Olivier Bohoun at the end of July. Bohoun said the Syncera program could reduce hip and knee device prices by 40% to 50% for the target market of 5% to 10% of U.S. hospitals.
2. Zimmer Agrees to Buy Biomet for $13.35 Billion (April 22, 2014)
Nothing caught the attention of our readers quite like the stunning move of cross-town rivals Zimmer Holdings, Inc. and Biomet, Inc. agreeing to combine in a transaction which is valued at just over $13 billion and will affect the work lives of more than 14, 000 employees and create a company with combined annual revenues of about $8 billion.
The transaction, expected to close in early 2015, further consolidates the orthopedic industry as it puts together the #2 player (Zimmer) with the #4 player (Biomet) and reduces the number of major, diversified orthopedic implant and instrument companies from 5 to 4.
Readers kept reading as follow-up stories centered on what will happen to current employees and a detailed look at the SEC documents showing the behind-the-scenes courtship.
1. Tony Castellvi, 61, Spine Surgeon and Research Luminary (February 25, 2014)
The top read story in OTW in 2014 was about the passing of Tony Castellvi, M.D.
It was with a heavy heart that we passed along the news that, Dr. Castellvi, one of the spine community’s most beloved surgeons died suddenly of a pulmonary embolism.
Dr. Castellvi is survived by his wife and best friend of 38 years, the wonderful Ramona, and their three children: Ramona Little, 36, Antonio “Cheech” Castellvi, 35, and Alejandro Castellvi, 30.
During the course of his career, Dr. Castellvi played a very important role in expanding the understanding of motion preservation and became one of the leading experts in the field of preservation of motion. His research in this area led to numerous publications in both Spanish and English and podium presentations at more than 50 conferences and meetings nationally and internationally.
While his professional contributions were deep and profound, it was his infectious love of searching for the best solutions for patients that made his “Duck Key Meeting” one of the highlights of the year for many researchers and practitioners.
The likes of a Tony Castellvi don’t come along very often. By the overwhelming response to the news of his passing, we know our readers agreed.
So ends 2014. Long live 2015.
