demystifying spinal products, procedures and …...2015/10/21 · bone grafts and bone graft...
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© 2015, MedAssets, Inc. All rights reserved. MedAssets®. Not to be reprinted without permission. For non-commercial use ONLY.© 2015, MedAssets, Inc. All rights reserved. MedAssets®. Not to be reprinted without permission. For non-commercial use ONLY.
Demystifying Spinal Products, Procedures and Contracting Strategy Cindy Jones, Vice President
MedAssets, Advisory Solutions
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© 2015, MedAssets, Inc. All rights reserved. MedAssets®. Not to be reprinted without permission. For non-commercial use ONLY.
Agenda
•The Spine Industry: Current State and Trends
•Plan Your Strategy: Tidbits from the Trenches
•Speak the Language: Spinal Implants and
Procedures
–Cervical
–Lumbar
–Newer Technology
–Osteobiologics
© 2015, MedAssets, Inc. All rights reserved. MedAssets®. Not to be reprinted without permission. For non-commercial use ONLY.© 2015, MedAssets, Inc. All rights reserved. MedAssets®. Not to be reprinted without permission. For non-commercial use ONLY.
The Spine Industry
Current State and Trends
4Confidential and Proprietary © 2015 Sg2
Sg2 ANALYTICS
400
450
500
550
2015 2020 2025
Inpatient Spine Volumes are Threatened
Note: Analysis excludes ages 0–17 and includes Spine service line only. Inpatient includes discharges; outpatient includes volumes.
Sources: Impact of Change® v15.0; NIS; PharMetrics; CMS; Sg2 Analysis, 2015.
+19%
+11%
+12%
+6%
Inpatient Spine Discharges
US Market, 2015–2025
Outpatient Spine Volumes
US Market, 2015–2025
Sg2 IP Forecast Population-Based Forecast Sg2 OP Forecast
Discharges
Millions 5-Year 10-Year
Volumes
Millions 10-Year5-Year
0.65
0.73
0.80
0.88
0.95
2015 2020 2025
–7%
+17%+8%
–6%
5Confidential and Proprietary © 2015 Sg2
Sg2 ANALYTICS
Inpatient Spine Volumes are Threatened
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Growth in US Spine Sales
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Market Share of Top 5 Manufacturers in Orthopedic Segments
2004-2014
Source: Orthopedic Network News , 2004-2013.
86%
93%
90%
65%
87%
93%
60%
65%
70%
75%
80%
85%
90%
95%
100%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Spine
Trauma
Joints
Source: Orthopedic Network News, October 2014
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Analysis of the 5 Largest Spine Companies’ Operating
Revenue
29%
7%
42%
22%
100%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Cost of GoodsSold
Research &Development
Sales, General,& Administrative
EBITDA Total OperatingRevenue
1
2
Source: FY 2013 figures are from www.medtronic.com, www.stryker.com,
www.jnj.com, www.nuvasive.com, and www.zimmer.com.
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8.9%
9.8%
15.9%
16.4%
23.0%
23.1%
25.1%
26.2%
37.5%
40.0%
42.0%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
ENERGY
MATERIALS
UTILITIES
INDUSTRIALS
CONSUMER STAPLES
CONSUMER DISC
TELECOMMUNICATIONS
ALL SECTORS
INFORMATION TECHNOLOGY
FINANCIAL SERVICES
HEALTHCARE
Healthcare Sector has the Highest SG&A Ratio
of any Industry Sector in S&P 500
Schonfeld & Associates Analysis 2014
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Medical Devices and Pharmaceuticals are one of the
Most Profitable Industry Sectors in the S&P 500
RBC Capital Markets Research Analysis
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Hospital Operating Margin TrendsCA vs. US
3.6% 3.7%
4.0%
4.3%
3.3%
4.4%
5.5% 5.9%
6.5%
0.9%1.4%
3.0%
4.3%
1.7%
2.6%
4.1%
5.4%
4.9%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
2004 2005 2006 2007 2008 2009 2010 2011 2012
All US Hospitals CA
2014 American Hospital Association Hospital Statistics. 349 Hospitals in reporting.
© 2015, MedAssets, Inc. All rights reserved. MedAssets®. Not to be reprinted without permission. For non-commercial use ONLY.© 2015, MedAssets, Inc. All rights reserved. MedAssets®. Not to be reprinted without permission. For non-commercial use ONLY.
Plan Your Strategy
Tidbits from the Trenches
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What Are the Drivers of PPI Contracting Success? Indicators that have been proven to achieve full savings
DRIVERS
1. Executives engaged in entire process
2. Physicians engaged in the process
3. Physicians incented to participate (not necessarily financial)
4. Full set of clinical, financial and cost data shared with stakeholders
5. Hospital willingness to remove non compliant vendors / make tough
decisions
Other contributing factors: Adhering to an aggressive timeline,
communication with physicians throughout process, history of project
implementation and culture
# of Drivers
Implemented
Savings Potential
Achieved
5 121%
4 91%
3 85%
< 3 59%Study from 19 facilities
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Physician Engagement is Vital
• Establish credibility by sharing accurate data relevant to physicians
• Use physician input to develop strategies
• Foster a collaborative environment, making physicians part of the process
• Various physician alignment strategies can be deployed
–Physician employment
–Co-management
–Bundled payments
–Gainsharing
–Joint ventures
–Professional service agreements
*Source: Healthcare Advisory Board
79% of physician do not know what things cost
80% of physicians want to know what things cost*
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Implant Strategy Continuum
Traditional cost negotiation
Vendor consolidation
Technology selection
“Repless” model
Increased physician engagement required
Increased implant savings potential
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Like Products Can Vary in PriceBe Wary of List Prices
Source: Orthopedic Network News Oct 2014
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© 2015, MedAssets, Inc. All rights reserved. MedAssets®. Not to be reprinted without permission. For non-commercial use ONLY.© 2015, MedAssets, Inc. All rights reserved. MedAssets®. Not to be reprinted without permission. For non-commercial use ONLY.
Speak the Language
Spinal Implants, Anatomy and Procedures
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Spine Anatomy
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Normal Disc
Spinous Process
Body of Vertebra
AnteriorPosterior
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Source: www.orthopedicnetworknews.com
Cervical Fusion
Source: Orthopedic Network News, October 2014
• Common procedures• Anterior cervical discectomy
and fusion (ACDF)
• Posterior cervical pedicle
screws
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Anterior Cervical Discectomy & Fusion (ACDF)
• Done in conjunction with a discectomy
• Fuses two vertebral segments together
to prevent a collapsing deformity
• Autologous or allograft bone may be
used.
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Cervical Implants
Atlantis by Medtronic
Cornerstone PEEK
by Medtronic
Cornerstone (bone) by
Medtronic
Vectra-T Translational
Plate by DePuy
Synthes
SlimFuse by Pioneer Assure by Globus
Colonial by GlobusTM-S by Zimmer made from
Trabecular metal
Skyline by DePuy
Synthes
Endoskeleton TC by
Titan Spine
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Interbody Material
Bone or Non-bone?
Source: Orthopedic Network News, October 2014
• The use of interbody made
from bone continues to
decline.
• Interbody made from bone is
less expensive than non-
bone
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Cervical Stand Alone Devices
ROI-C by
LDR Spine
Prevail by
Medtronic
Zero-P VA by
DePuy SynthesCoalition by
Globus
Stalif-C by
Centinel Spine
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Posterior Cervical Fusion
• Common brands
• Vertex by Medtronic
• Mountaineer by DePuy Synthes
• Synapse by DePuy Synthes
• Oasys by Stryker
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Artificial Cervical Discs
Prestige by Medtronic Bryan by Medtronic Prodisc-C by DePuy
Mobi-C by LDRSecure-C by Globus
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Lumbar Fusion Procedures
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©2007 Medtronic Spinal and Biologics Division
Posterior Lumbar, Transforaminal Lumbar,
Anterior Lumbar and Direct Lateral Interbody
Fusion Approaches
Word word
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Anterior Lumbar Interbody Fusion (ALIF) Approaches
Retroperitoneal
Transperitoneal
Lateral
Anterior exposure of L5 – S1
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ALIF Instrumentation and Implants
Pyramid by Medtronic
Aegis by DePuyTrinica by Zimmer
ATB (Anterior Tension Band)
by Synthes
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Lumbar Stand Alone Devices
LDR ROI-A
Synthes Synfix-
LR
Biomet Solitaire Globus Independence
Centinel Spine STALIF-TTSpinal Elements Magnum +
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PLIF/ TLIF – Posterior/ Transforaminal Lumbar
Interbody Fusion
•Utilize a posterior (back area
incision) approach
•Commonly utilizes pedicle
screws, rods and an interbody
device/ cage as well as some
type of bone graft
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XLIF - Extreme Lateral Interbody Fusion (NuVasive)
Also Called Direct Lateral Approach
•Anterior portion of lumbar
spine is fused from the side.
• Incision in the side between
the lower ribs and the pelvis
• Instruments pass through
muscles and to the disc
–Lateral muscles are separated,
less muscle tearing or cutting
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Cage Comparison
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TLIF XLIF PLIF
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Expandable Interbody
–Globus Caliber
–Spine Wave StaXX
–Spineology Optimesh
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Globus CaliberSpineology Optimesh
Spine Wave StaXx
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Interspinous Process Fixation/ Fusion Devices
LifeSpine Aileron
Biomet/ Lanx Aspen
Total Annual Spend= $691,020
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Artificial Lumbar Discs
Charite by DePuy Prodisc-L by Synthes
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Corpectomy
• When the surgeon removes the vertebral body as well as the disc
space.
• Could be in any portion of the spine.
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Sacroiliac Joint Fusion
Zyga Simmerty Globus SI-LOK SI-Bone iFuse
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US Osteobiologics Market
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Bone Grafts and Bone Graft Substitutes by Procedure Type
Source:” Orthopedic Network News, October 2014
• BMP usage has dropped from 51% of lumbar cases in 2011 to 21% in 2014.
• The use of cell-based matrix products is increasing
• 90% of bone graft spend is for spine cases• Some cell-based matrix products are also marketed for trauma and foot & ankle
• Bio4 by Stryker/Osiris
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Sustainability of PPI Costs
• Data is king
–Have a consistent feedback loop
–Evaluate metrics on a regular basis
–Communicate data to physicians regularly
– Seek involvement and input
• Establish/ keep an active clinical value analysis process
–Adopt new technology based on clinical evidence
– Procured Health
–Seek continual physician involvement
• Coordinate service line management across the continuum of care
–Shared risk/ benefits are coming, if not in your facility already
–Prepare for efficiencies across service lines
– Adopt an end to end view of patient management
© 2015, MedAssets, Inc. All rights reserved. MedAssets®. Not to be reprinted without permission. For non-commercial use ONLY.© 2015, MedAssets, Inc. All rights reserved. MedAssets®. Not to be reprinted without permission. For non-commercial use ONLY.