Reno, Nevada-based Orthopaedic Implant Company (OIC) is innovating a new path for the ortho implant industry—one that addresses the pricing pressure of modern orthopedic surgery while also delivering best-in-class implants and instrumentation.
“Ironically, while orthopaedic surgeon fees on certain cases have steadily declined, the prices of the implants have steadily risen creating an environment where significant price hikes, as well as wild price swings for the same devices from one hospital to another, have become commonplace,” notes OIC’s Chief Executive Officer Itai Nemovicher.
Nemovicher refers to this approach as a human-focused and value-driven business model which could well change the way the ortho implants are manufactured and delivered to surgeons.
What makes this approach so interesting, is that OIC, which is 12 years old, has grown to supply hospitals and clinics all over the United States with a comprehensive portfolio of advanced design implants and instrumentation for external fixation, hip fractures, and other trauma indications—at a fraction of the prevailing U.S. pricing.
“We need to rethink the way implants are used, sold, and priced,” says Nemovicher and his co-founder Peter Althausen, M.D., M.B.A. “Long-established gold standards in implants should not cost their weight in it.”
OIC’s Origins
Founded in 2010 by Chief Executive Officer Itai Nemovicher and Chairman and Treasurer Peter Althausen, the company offers surgeons, hospitals, and surgery centers high end orthopedic products at lower prices. The company’s inception began while Nemovicher was working his way up the ranks within the sales management department of one of this industry’s largest implant manufacturers. Nemovicher and Althausen had been colleagues in the industry for years and, together, noticed a problem, a disconnect—prices were rising, but patient outcomes weren’t changing.
“It was my responsibility to sell products at prices that were consistently rising due to innovation expenses,” Nemovicher explained. “But there was one clear problem—outcomes weren’t changing. Despite the alleged innovation and improvements referenced to justify price increases, there were no discernible improvements in clinical outcomes.”
“I remember very clearly the day a surgeon called me demanding to know why his patient was charged $120,000 for the implant received during surgery. I didn’t have a sufficient answer to justify the price. I knew in that moment that I could not continue to advance my career by knowingly selling implants at exorbitant prices, creating excessive wealth for corporate executives and investors while patients and physicians suffered from the burdens of extreme, unnecessary expenses.”
Dr. Althausen was an orthopedic trauma surgeon and educator at the time. The two came together and decided that someone needed to do something—and why not them? “We committed to creating a company capable of providing high quality implants at affordable prices for everyone,” said Nemovicher. “With support from other like-minded surgeons and administrators, we created The Orthopaedic Implant Company. Twelve years later, our mission remains focused on reducing the cost of care without compromising quality.”
More Cost Effective, More Efficient, More Equitable
The Orthopaedic Implant Company offers high quality implants at significantly lower prices. “Our business model focuses on operational efficiency that reduces overhead expenses to help physicians, patients and health systems save money. We streamline inventory management, spend minimal on marketing and advertising, decrease unnecessary clinical support in the OR, and prioritize research and development as our most significant expense,” explained Nemovicher.
“This is a value-based approach and it’s been proven to save facilities 50-60% on implant costs while supporting outcomes consistent with higher-priced implants from industry giants. The bottom line is we deliver the same quality at a lower price. It isn’t a novel approach theoretically, but the reality of doing it and staying true to the approach is novel in the orthopaedic space. We’re driving a necessary culture change to evolve an industry that has taken advantage of a broken system for too many years.”
We asked Nemovicher how his company is able to do something other companies seem incapable of achieving. His answer was succinct. “Our ability to offer better value implants in comparison to other vendors is driven by our desire to see it happen. It’s truly about an unwavering commitment to improving healthcare.”
He went on, “For more than a decade, we have built a culture, cultivated a mindset, and put measures in place logistically to make the healthcare industry better for everyone involved—more cost effective, more efficient, and more equitable. The reality is that the business ethics we have fostered to bring about a better healthcare system are unfathomable to companies that prioritize profit above improving the healthcare system and patient care. At OIC, we’re able to offer better value simply because we choose to.”
Delivering What’s Needed for a Successful Surgery, Not Higher Manufacturing Margins
“Factor in the declining reimbursement rates being seen for orthopaedic procedures and the result is a perfect storm that is contributing to rapidly evaporating hospital and surgery center margins,” notes Nemovicher.
OIC’s business model, said Nemovicher, is based on value, efficiency, and what he describes as configurability. The goal is to reduce financial strain on patients, pressure on providers, and subsequent costs for hospitals and payors. “We deliver quality implants at lower prices,” he said. “We provide the level of clinical support needed for each case based on surgeon and clinical team preferences, needs and experience.”
Nemovicher continued, “We don’t assume it is necessary to have clinical support at every case. We work with our physicians to be there when needed. We make sure surgeons and facilities have access to implants and tools that streamline the surgical process and remove the burden of reliance on a sales rep.”
“Facilities appreciate this approach because it improves the bottom line at no detriment to their focus on outcomes and patient satisfaction. Lower costs for the facility translates to lower costs for patients, subsequently making facilities more competitive in a sector where transparency is increasingly expected. This benefit continues to patients. Patients heal clinically achieving expected outcomes and experience much less economic pain than if they had received an implant from the traditional OEMs.”
Giving Back
The Orthopaedic Implant Company’s mission is “to lower the cost of orthopaedic procedures by developing more affordable implants with the perfect balance of quality, service, and price for surgeons, hospitals and patients.”
For OIC, these aren’t just words. The company has collaborated with One World Surgery via international mission trips for the past several years, providing implants, surgical instruments, education, and volunteer support for ortho procedures in under-industrialized countries. Nemovicher himself traveled with clinical teams from orthopedic clinics in Bloomington, Minnesota, and Los Angeles, California to offer direct care service work, an experience that he found deeply moving.
For more information on OIC’s philanthropic work with One World Surgery, see our feature, “Profile: Orthopaedic Implant Company ‘Walking the Walk.’”
Looking Ahead
What goals does OIC have for the remainder of 2022? “Now more than ever, there is a dire need to reduce healthcare expenditures,” Nemovicher told us. “Physicians and health systems are seeking ways to lower costs and OIC is increasingly part of that discussion. We’re fortunate and grateful to have double digit growth year over year; we expect this year to be our best on record. As we continue to grow and scale, there are increased opportunities for us to further drive down the cost of care. Our 2022 goal is to be in a position where we can lower our prices even further and reverse the price increases seen throughout our industry.”
We asked Nemovicher what his proudest OIC accomplishment is so far. “Commitment to our mission,” he answered. “It’s not easy to do things differently but that doesn’t stop us from remaining focused on our mission. The quality, features, and implant options we offer can go head-to-head against any competitive products. The easier path would be to sell our implants at ‘Market’ prices. But we won’t do it because it goes against what OIC stands for and why we created the company. Every day our team chooses the more difficult path; I’m proud of their dedication to changing the system and making healthcare more affordable.”
