Large Joints Feature

Under the bundling payment system for hips and knees, providers are given a lump sum for an entire episode of care, ending 90 days after a procedure is performed.

Studies have shown that the largest variable in the cost of that episode of care is in the post-surgical phase after patients leave the hospital. For example, according to Centers for Medicare and Medicaid Services (CMS), 36% of the total cost for lower extremity joint replacement is attributable to post-acute care. Assuring that patients follow rehab protocols saves the hospital money.

Device makers have been developing tools to help their hospital customers control those costs.

On October 27, 2016 Zimmer Biomet Holdings. Inc. announced the acquisition of RespondWell, a telerehabilitation technology designed to provide personalized, clinician-supervised post-surgical physical therapy in the comfort of a patient’s home. The Zimmer Biomet announcement stated the acquisition strengthens it recently announced Signature Solutions commercial offering by integrating a comprehensive, at-home telerehabilitation capability designed to "enhance patient compliance with physical therapy and improve the quality of recovery."

A Zimmer Biomet spokesperson told OTW that the RespondWell program is known as Therapy@Home. Patients are guided by Maya, an on-screen virtual therapist helping to keep patients engaged, motivated and on track with their recovery program in the convenience of their home. It features a personalized rehabilitation plan designed by a clinical care team with on-screen digital instructors to coach and encourage patients, and built-in reward features encouraged by increased patient participation and consistency.

The system also allows patients’ clinical care teams to remotely monitor progress and activity and digitally communicate, potentially reducing the costs associated with follow-up visits and clinic-based rehabilitation programs.

David Nolan, Zimmer Biomet's group president, Biologics, Extremities, Sports Medicine, Surgical, Trauma, Foot and Ankle and Office Based Technologies, said the new value-based reimbursement environment, "compels hospitals and providers to assume responsibility for patient outcomes well after discharge and through the critical rehabilitation period. Integrating an innovative and comprehensive telerehabilitation program into our Zimmer Biomet Signature Solutions offering addresses the emerging need for healthcare providers to oversee and optimize post-surgical recovery outcomes in order to maximize value across the entire episode of care.”

"I believe RespondWell's innovative telerehabilitation platform will help our clinical care team enhance the quality and outcomes of post-op patient care by providing an interactive and motivating physical therapy experience that encourages patient engagement and compliance to physical therapy in a convenient environment, the patient's home, " said Ronald A.

The FDA has given Zimmer Biomet Holdings, Inc. permission for an expanded 26-week efficacy claim for its single-injection viscosupplement Gel-One Cross-linked Hyaluronate for the treatment of knee pain associated with osteoarthritis.

Gel-One, according to the company, is indicated for knee osteoarthritis patients who have failed to respond adequately to non-pharmacologic therapy, non-steroidal anti-inflammatory drugs (NSAIDs) or simple analgesics, such as acetaminophen. Hyaluronic acid (HA) is typically the last remaining step before the big, $30,000-$40,000 knee replacement surgery.

The company claims the product is the first low-volume viscosupplement available in a single-injection formulation for the treatment of osteoarthritis of the knee. Hyaluronic acid supplements the natural HA of the knee, which provides lubrication to the joint. Gel-One requires only a single 3 mL injection to complete the treatment course.

In 2015, the FDA allowed for expanded claims that multiple injections of Gel-One are safe. Now with a 26 week efficacy claim, the multiple injections will have to come less frequently.

The supplement can be administered in the physician office setting.

David Nolan, Zimmer Biomet's head of biologics, extremities, sports medicine, surgical, trauma, foot and ankle, office based technologies and the company's Signature Solutions, said "Gel-One Hyaluronate is a vital component in the continuum of treatments for knee osteoarthritis, offering millions of patients the potential for up to six months of pain relief with a single injection. The expanded efficacy claim not only strengthens our competitive positioning, but reinforces our commitment to alleviating pain and restoring mobility for patients at every stage in the continuum of musculoskeletal care, including conservative and non-surgical options."

Payer Challenges

While the clinical evidence of HA has passed FDA muster, payers have been balking at paying for the procedure triggered by a May 2013 change in clinical practice guidelines from the American Academy of Orthopaedic Surgeons (AAOS). AAOS said it “cannot recommend using hyaluronic acid for patients with symptomatic osteoarthritis of the knee.”

While a vast majority of payers are still paying for HA, a number of them have started to make doctors and their office staff jump through new pre-authorization hoops.

Zimmer Biomet Holdings, Inc. is joining Stryker Corporation, Smith & Nephew plc and Medtronic plc in the robotics gold rush.

On July 18, 2016, Zimmer Biomet announced it will acquire 59% of a French-based robotic manufacturer, named Medtech SA.

ROSA System

Medtech, based in Montpellier, France, was founded in 2002 by Bertin Nahum. The company designs, develops and markets the ROSA robotic device, an "innovative robotic applications to assist surgeons during their medico-surgical interventions, " according to the Medtech press release.

The ROSA system was designed for various neurological procedures. The company says the system is "comparable to a 'GPS' for the brain, " and can be used for "any type of cranial procedure requiring surgical planning with preoperative data, patient registration and precise positioning and handling of instruments."

It is the only robotic assistant approved for neurosurgical procedures in clinical use in Europe, the U.S. and Canada.

The company stated the system has an advanced haptic capability that gives the neurosurgeon the ability to easily guide the instruments by hand within the limits and restrictions established during the planning stage. "The surgeon is able to easily interact with the robot without changing any of his surgical techniques thus reaping the full benefits of robotic movement."

Spine and Brain

According to Needham & Company analyst Mike Matson, ROSA's initial application was for brain surgery and can be used in 80% of brain surgery procedures. The brain application received a CE Mark in 2009 and an FDA clearance in 2011 and the brain application has driven most of its system sales so far. ROSA can also be used for spine surgery including lumbar fusion. The spine application received a CE Mark in 2014 and an FDA clearance this past January.

Matson noted that Medtech's business has been more brain-oriented while Mazor Robotics' business (recently affiliated with Medtronic plc) has been more spine-oriented. "However, we expect this to change given Zimmer's large spine implant business and as a result we now view ROSA as more of a threat to Mazor. We think that the deal is positive for Zimmer since it provides it with a robotics platform that might eventually have applications beyond brain and spine surgery for a relatively low price."

Investors and the orthopedics industry have been holding their collective breaths waiting to see how the Zimmer Biomet Holdings, Inc. merger is going to work out.

Revenue Rises

On October 29, 2015, company President and CEO Dave Dvorak put fears to rest. He announced that in the first quarter as a combined company, revenue, on a pro forma, constant currency basis, rose 0.7%. Investors practically swooned, driving the company's share prices up by over $10 per share. Wells Fargo analyst Larry Biegelsen said the revenue was in line with consensus.

Due to the merger, net sales of Zimmer Biomet increased 59.3% over the past year on a reported basis. "In an operating period marked by significant progress in the execution of our sales channel integration, we generated sequential top-line improvement and strong earnings growth. As we exit this year and progress through 2016, we are well positioned to continue improving revenue growth and delivering on our synergy commitments, " Dvorak told analyst.

This wasn't Dvorak's first big merger, having successfully guided Zimmer through its $3.2 billion merger with Centerpulse AG (formerly Sulzer Medica) in 2003.

Hips and Knees Up

On a pro-forma, constant currency basis, knee sales did best, climbing 1.7%. Hips rose 0.3% and spine & CMF were up 0.3%. S.E.T., a new reporting category formed after the merger with Biomet, including surgical, sports medicine, foot and ankle, extremities and trauma, rose 1%.

The rise in knee sales was attributed to the company’s Persona Knee, with management also citing its Vanguard Complete Knee System, as well as its Vanguard 360 Revision Knee System and bicruciate options, such as the Vanguard XP Total Knee System. In hips, Dvorak said he is “encouraged” by a quarter-over-quarter improvement and cited solid growth of the company's G7 and Continuum Acetabular Systems, as well as its Taperloc Complete Hip System and Avenir Hip system adding to the portfolio effort.

Third Quarter Ortho Winners and Losers

Now that all the large orthopedics companies have reported, BMO Capital Market analyst Joanne Wuensch estimates that worldwide knee market increased 2.1% ex-fx, against a tough 8% comp last year, and that Zimmer’s share decreased to 38.9% from 40.1% year-over-year.

Meet the new Zimmer Biomet and its leaders.

Zimmer Holdings, Inc. is feeling so confident of regulatory approval of its merger with Biomet, Inc. that the company announced what the combined company will be called after the merger is completed.

On October 30, 2014, the company also announced the future executive leadership team and organizational structure to be led by current Zimmer President and CEO Dave Dvorak. A new brand will be rolled out after the merger. There was no mention of current Biomet CEO Jeff Binder.

Dvorak and the Twelve Chiefs

The executive leadership team of the new Zimmer Biomet will comprise 12 executives reporting directly to Dvorak, and will be organized around three business units, three geographic regions and six functional areas.

Biomet gets five of the positions, including: Spine, Hips/Knees, Americas, Global Logistics and CFO.

Business Units and Leadership

• Adam R. Johnson, Group President, with responsibility for the Spine, Microfixation, Bone Healing and Dental businesses. Johnson has served in leadership roles at Biomet for 12 years. Johnson currently leads Biomet's Spine, Microfixation and Bone Healing Division.
• David A. Nolan, Group President, with responsibility for the Sports Medicine, Extremities, Trauma, Biologics and Surgical businesses. Nolan has more than 20 years of experience in commercial leadership roles at Biomet and Zimmer. Nolan currently leads Zimmer's Advanced Solutions portfolio.
• Daniel E. Williamson, Group President, with responsibility for the Knee, Hip and Bone Cement businesses. Williamson has served in senior leadership roles at Biomet for 24 years. Williamson currently leads Biomet's Reconstructive Division.

Geographic Regions and Leadership

• Stuart G. Kleopfer, President, Americas. The Americas region will be comprised of the United States, Canada and Latin America. Kleopfer has held the U.S. executive leadership position at Biomet for four years and has been with Biomet for 26 years.
• Katarzyna Mazur-Hofsaess, M.D., Ph.D., President, EMEA.