DePuy Synthes recently entered into a strategic alliance with Value Stream Partners to design, develop and implement bundled payments for hip and knee replacements. The agreement is available to orthopedic providers and could be especially useful for customers participating in the Comprehensive Care for Joint Replacement model — which could become more widespread in the future.
"Bundled payments is something that is here to stay and as a company, we are working hard on the triple aim," says Ciro Romer, company group chairman, DePuy Synthes Franchise. "We want to make sure we are continuing to improve outcomes and patient satisfaction while lowering cost. Healthcare is going from a volume-based to value-based industry and we are excited to continue innovating there."
DePuy Synthes is one of the largest orthopedic device company providers in the world, possessing 39.4 percent of the United States orthopedic trauma market in 2013. The company continues to innovate with new product lines for hip and knee replacements as well as orthopedic trauma and spine, with their new nail gaining significant market share.
But the needs of their primary customer — hospitals and physicians — are changing; providers are taking on more risk and focusing on efficiency over new gadgets.
"In order to optimize the bundled payments, we have an aggressive strategy to make sure we help our customers make the OR experience more efficient," says Mr. Romer. "We are happy that our alignment with VSP will help clinics achieve better outcomes and manage their bundled payments."
The transition from a volume-based to value-based compensation model brings new challenges for most orthopedic operating rooms. Physicians and staff have trouble fully optimizing their end-to-end supply chain while still achieving the best results possible.
"We're working closely with our surgeons to achieve their goal: improve clinical outcomes and meeting unmet clinical needs. Moving forward we are partnering with more stakeholders in the clinic to make sure we look beyond just the outcomes to help the organization," says Mr. Romer. "Johnson & Johnson has a lot of experience in this area and won't shy away from working with partners who are dedicated to the space and can bring a lot of value."
The company's strategy going forward is three-pronged to improve platforms in the hip, knee, trauma and spine markets in the United States:
• Internal research and development
• Evaluating outside innovation for licensing
• Taking on value-based partnerships
"We consider the U.S. a critical market," says Juan-Jose Gonzalez, president, DePuy Synthes U.S. "Johnson &Johnson is one of the largest companies in the space and we want to focus on the patients and from that we have seen significant improvement. But there is still so much to do around spinal deformity and osteoporosis or osteoarthritis. There are areas where we can still help patients live a better life."
The company plans to continue traditional research and development as well as expand through acquisitions and internal innovation, such as hip surgery navigation.
The near future may also bring new opportunities in technology and communication. IBM Watson is developing computer applications to engage patients and educate them about their procedures and recovery. The partnership will develop a website and app that will provide virtual coaching for patients undergoing knee replacement using Watson's cognitive computing to predict patient outcomes.
"We believe this will be an important differentiator," says Mr. Romer. "It shows we are doing more than others to move ahead in the field and prepare patients for surgery. We expect this will have a clinical impact on the patient's outcome and improve patient satisfaction."
The company's agreement with Google also looks ahead at technologies for future collaboration to integrate products. "The idea is to bring a truly advanced experience to healthcare delivery using tools such as Google Graphs to significantly advance communication with the patient," says Mr. Gonzalez. "The patient will be able to see what is behind the surgical decisions and will have the ability to affect the outcomes and conduct predictive analysis."