Becker's Spine Review

48 DEVICES & IMPLANTS Medtronic continues to push outcome-based contracts: 5 things to know By Mackenzie Garrity M edtronic CEO Omar Ishrak is pushing for the device manufac- turer to take on more risk-based compensation contracts, e Wall Street Journal reports. Here are five things to know. 1.Medtronic is signing contracts with cus- tomers to adjust prices based on how well the specific product works rather than having a customer pay a fixed price for a product de- spite its performance. e move toward outcome-based contracts follows the healthcare industry's push toward value-based care. 2. Medtronic began signing outcome-based contracts in 2017. To date, the company has signed close to 1,000 contracts that require the company to reimburse hospitals for cer- tain infection costs. e company also signed an agreement with Aetna to combine a portion of the reimburse- ments the insurer pays for insulin pumps if a patient doesn't see an improvement with Medtronic's pump. 3. When asked about the decision to move toward outcome-based contracts, Mr. Ishrak told WSJ, "Medtronic is focused on technolo- gies to improve outcomes. We use biomedical engineering to alleviate pain, restore health and extend life." "Historically we've done that by creating credible evidence that our technologies do change outcomes. But at the end of the day, we and the industry get paid on the technol- ogy itself and a promise that those outcomes will actually be changed," said Mr. Ishrak. 4. Mr. Ishrak emphasized the move toward these contracts is to provide additional as- surance to customers that they are receiving their money's worth, instead of as a way for Medtronic to reduce costs. 5. When talking about why more device com- panies are not moving to this model, Mr. Ish- rak said, "It's difficult to do. Incentives for the whole healthcare industry don't encourage this. You get paid for a service; that's easier than being paid for an outcome. You get paid for a technology; that's easier than getting paid for the technology actually doing some- thing. So, the incentive structures across mul- tiple stakeholders, almost every stakeholder, are fashioned to make this risky proposition." "e fee-for-service model is just not a sus- tainable model, and we have to do our piece in a managed way, a responsible way, to move the ball forward." n Stryker Group President to retire, ending 30-year career: 5 highlights By Mackenzie Garrity S tryker's Group President of Global Quality and Business Op- erations Lonny Carpenter plans to retire March 31, 2019. Here are five highlights. 1. Mr. Carpenter transferred his global quality and operations re- sponsibilities to Viju Menon. 2. He will continue to oversee Stryker's regional business operations outside of the U.S. and Asia-Pacific. Mr. Carpenter will also stay in- volved with Stryker's Cost Transformation for Growth program. 3. Mr. Carpenter joined Stryker in 1989 with the company's instru- ments department. He became group president of global quality and operations in 2011. The role was expanded to include com- mercial business operations in Europe, Middle East, Africa, Cana- da and Latin America in 2014. 4. Mr. Menon comes to Stryker from Verizon, where he served as chief supply chain officer. 5. Mr. Menon also spent time at Intel Corp., serving as head of supply planning operations across the company's global factory network. n K2M names new COO: 5 things to know about Lane Major By Mackenzie Garrity K 2M appointed Lane Major COO. Here are five things to know. 1. Mr. Major brings more than 15 years of spine industry experience to his new role. 2. Most recently, he served as K2M's chief strategy officer. 3. Mr. Major joined K2M at its inception in 2004. He spent time serving as senior vice president of global marketing and product development. 4. At K2M, Mr. Major has been crucial in the devel- opment and commercialization of the company's product portfolio. 5. He earned his MBA from Northwestern Univer- sity Kellogg School of Management in Evanston, Ill. n

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