ASC Communications, Inc.

ConforMIS customized implants are designed and manufactured using patient CT scans to avoid sizing compromises and respect each patient's natural condylar shape, corrected for deformities. In recent clinical studies, iTotal® CR, ConforMIS' cruciate-retaining total knee replacement implant, demonstrated superior clinical outcomes, including better function and greater patient satisfaction compared to traditional, off-the-shelf implants. The ConforMIS customized knee replacement products offer significant benefits to hospitals with a unique just-in-time delivery model. This model includes one box with a customized implant and pre-sterilized patient-specific instru- ments, a single reusable instrument tray, and no implant inventory. For more information visit www.conformis.com GM: I was not markedly surprised by the results of the study. I was getting reasonably good results with my prior off-the-shelf device, but once I began using the customized knees I really saw a dramatic difference in how the patients were recovering. They were swelling and bleeding much less, mobilizing sooner and just really feeling better than I was ever used to seeing in knee replacement patients. So if patients mobilize sooner and feel better and go home, I believe they are less likely to have a complication. Q: How do you think the evidence that ConforMIS knee implants yield lower adverse event and transfusion rates as well as decrease in the likelihood of discharge to high-cost post-acute care facilities will impact the future of TKR? GM: Well, these things are all interrelated. We know from prior studies that there is a link between blood transfusions and surgical site infections. We also know that patients admitted to a skilled nursing facility are more likely to return to the hospital with a complication. So if patients bleed less, feel better and go home, then they are less likely to have a complication. When we look at the costs of the overall episode of care we know that patients that have a short hospital stay and quick return to home cost the least. Hospitals and post-acute care facilities are where the bulk of the dollars are spent, so the less these are needed the better. That is also why I believe we are going to see the transition of a lot of these cases to outpatient settings for healthier patients. ConforMIS is uniquely positioned to succeed in this environment. DJ: Historically joint replacement was looked at [in terms of] how much the implant and surgery costs. Now [payers] want to see what the entire episode of care costs. If you can see savings in total cost over 90 days, it is going to drive a change in the market. Q: How do you see customized implants positively impacting patients, surgeons, hospitals and payers? BW: The knee costs about the same as other knee replacements. There is a cost for the CT scan, but not a very high cost. It's cheaper for payers because there are fewer complications. It's cheaper for hospitals [to avoid] preparing eight big trays of metal, and it's less inventory. Patients are happier and that's the whole point of doing the surgery in the first place. GM: For patients and surgeons the goals are typically aligned. We want to have an excellent outcome with the procedure with a satisfied patient and avoidance of complications. I believe customized implants can provide this in the overwhelming majority of patients. Under new payment models hospitals and payers are to some degree aligned as well. They now care about the overall cost which would include any readmission or problems associated with the initial procedure. DJ: We did a large study with more than 800 patients comparing off-the-shelf versus customized implants. Watching patients doing simple daily activities, we found the patients with customized implants walked a little faster. Hospitals and payers [look at] revision rates and readmission rates as well as system and societal cost/benefits. If we have lower rates with ConforMIS, that will be astronomical savings. Q: Do you think ConforMIS Customized Implants align with the value-based care model of high quality and low costs? DJ: A total episode of care is less expensive with a customized implant. The implant is less than one-third of the episode of care, so you don't want to only look at that cost. [Using customized implants] makes sense for a total value-based care model, it aligns very well. BW: We're always trying to do more cases in the outpatient or surgery center. There is less inventory to manage and patients enjoy the experience more. We see less bleeding and swelling early on because we don't have to drill as many holes in the bone and cause less trauma during surgery. GM: I believe the overall ConforMIS model is ahead of its time. The delivery of single use, individualized surgical instrumentation (facilitating a less invasive surgical technique) along with a customized implant is a powerful combination. This study demonstrated that for similar cost to an off-the- shelf implant, use of a customized implant provided benefits of a shorter length of stay, less need for blood transfusions, fewer adverse events, and better discharge disposition. This is a compelling value proposition at this time which I believe will only improve as economies of scale are achieved and manufacturing costs decrease. n One Patient. One Implant. 60 Executive Roundtable

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