Becker's Hospital Review

50 Executive Briefing: Device Supply Chain Management Sponsored by: A 'Disruptive' Model: How Implant Partners is Shaking Up the Orthopedic Device Model By Heather Linder A bout three years ago, executives at Wright Medical Group looked at the orthopedic industry's sharply-increasing de- vice costs coupled with decreasing procedure reimburse- ments and saw an opportunity to incite change. They developed a novel business model where surgical control could be put back in the hospitals' hands while saving 40 to 70 percent on primary hip and knee replacement surgeries, all by eliminating inefficiency and the often unnecessary costs accrued by device company representatives. Wright's original LLC, called Wright Direct, sold to MicroPort Or- thopedics on Jan. 9 and has been renamed Implant Partners. Company executives know the model is unorthodox but also be- lieve the time for such a model is right. "Implant Partners was created to help maintain the clinical suc- cess that is commonplace among U.S. manufactured hip and knee implants, but to eliminate the excess that is also prevalent," says Steve Lamb, company vice president and lead partner. "We noticed that there were some key indicators developing that sug- gested the market was ready for a disruptive model like ours — more institutional focus on improved procurement procedures, a steady increase in employed surgeons, growth in hospital membership in [integrated delivery networks] and all of the other changes spurred by our new healthcare economy." Since its inception, Implant Partners' process has been relatively simple, yet with shocking results. Implant Partners' experts come into hospitals and train the phy- sicians and operating room staff to perform tasks normally ful- filled by device company reps. During the transition process, a trainer will be in the operating room to guide the initial procedures. Once the physician and staff are comfortable, the Implant Part- ners' consultant will sign off on the training, but remain available, even through remote video chat, to help with any complications or questions that arise. Training typically takes a couple of days and the entire transition can be deployed in four to six weeks, Mr. Lamb says. Once full implementation has properly taken place, the cost savings are hard to deny. Challenges to change With all its potential for big savings, though, not all hospitals are jumping on board. The biggest challenge is getting hospitals and physicians to be economically aligned, Mr. Lamb says. Ortho- pedic surgeons are often very attached to their current implant providers and company reps, and hospitals must consider this motivation before trying to change the system. "When surgeons are economically aligned with the hospitals, potential obstacles seem to disappear, and the surgeon is com- pletely vested in saving the hospital money," he says. "However, when they get the same fee regardless of if there is a rep in the room or not, why not have the rep in the room? As soon as they are able to participate in cost containment, there is a different level of ownership." Part of the transition to the new model involves establishing true hospital-physician alignment with both parties coming to an agreement about lawfully and equitably distributing the cost sav- ings. Implant Partners strives to help hospitals and physicians achieve optimal clinical, operational and economic alignment ar- rangements. "Part of the transition to the new model in- volves establishing true hospital-physician alignment with both parties coming to an agreement about lawfully and equitably distributing the cost savings."

• Cover