Service Line Advisor 2017 Orthopaedics and Spine Global Market Trends - PowerPoint Presentation

Service Line Advisor 2017 Orthopaedics and Spine Global Market Trends

Surgery Mainstay, but Non-Operative Care Essential Introduction Service Line Advisor research and analysis. Orthopaedics Represents Large Range of Services Joint Replacement Hip Arthroplasty Knee Arthroplasty Shoulder Replacement Fracture Repair Tendon Repair Trauma Pain Management & Non-Operative Care Foot & Ankle Ankle Arthrodesis Ankle Arthroplasty Sports Medicine Rotator Cuff Repair ACL Repair Spine Fusion Decompression Kyphoplasty/Vertebroplasty Defining the Orthopaedic & Spine Business Rheumatology Anesthesiology Physiatry Hand & Upper Extremity Carpal Tunnel Release Ganglion Excision

Service Line Advisor research and analysis. Factors Affecting Demand for Orthopaedic Care Greater Impact on Orthopaedics Service Line Emphasis on conservative care Expanded use of clinician assistants to improve access, cover non-surgical care Improved Ambulatory disease management targeting reductions in avoidable hospitalisations Care Management Initiatives Minimally invasive advanced surgical techniques Biologics expanding conservative offerings 3-D printing improving preoperative planning and patient education Technology Adoption Growing osteo-arthritis, diabetes, and obesity prevalence Growing elderly population (65+) Increasing physical activity levels among younger segments of the population translating to earlier utilisation Disease Incidence and Prevalence

Demand Trends 1 2 Clinical and Technological Innovations 3 Implications for Providers

Demand Trends: Disease Prevalence Source: Service Line Advisor research and analysis. Orthopaedics Demand Linked to Disease Prevalence Factors Driving Chronic Disease Prevalence IMPERATIVES DISEASE DRIVERS Behavioural Diet, lack of exercise, other lifestyle factors contribute to arthritis, obesity rates Demographic Aging population increases number of comorbid patients DATA Education Screening Longitudinal Care Prevention Osteoarthritis prevalence in Australia (2015) 9% 15% Osteoarthritis prevalence in Canada (2015) 11% Osteoarthritis of the hip prevalence in England (2017) Number of Australians with back pain (2014-2015) 3.7M Adult prevalence of diabetes in Australia (2014-2015) 6% Prevalence of diabetes in Canada (2015) 9% Of Australians are overweight or obese (2014-2015) 63% Prevalence of obesity among adult Canadians (2014) 20% Number of people affected globally by lower back pain (2017) 700M

Rise in Presurgery Diseases Throughout Europe Demand Trends: Disease Prevalence Source: “Almost 1 adult in 6 in the EU is considered obese,” Eurostat, http://ec.europa.eu/eurostat/documents/2995521/7700898/3-20102016-BP-EN.pdf/c26b037b-d5f3-4c05-89c1-00bf0b98d646 ; “Osteoarthritis statistics,” Health Grove, http://global-diseases.healthgrove.com/l/223/Osteoarthritis ; “Diabetes Prevalence,” WHO, http://data.worldbank.org/indicator/SH.STA.DIAB.ZS ; “Prevalence and Risk Factors of CTS,” Egyptian Journal of Occupational Medicine, http://www.ejom.eg.net/pdf/2016/1.pdf ; “Facts and Statistics,” International Osteoporosis Foundation, https://www.iofbonehealth.org/facts-statistics#category-22; “Rheumatoid Arthritis in France,” Health Grove, http://global-disease-burden.healthgrove.com/l/75920/Rheumatoid-Arthritis-in-France; Service Line Advisor research and analysis. Inflammatory bowel disease. Chronic Disease Prevalence in Europe of adults in the European Union were obese in 2014 16% Annual years of healthy life lost per 100,000 people due to osteoarthritis in Sweden (2013) 128 Prevalence of diabetes among Belgian adults (2015)5% Prevalence of carpal tunnel syndrome in Germany (2016) 8% Projected number of annual bone fractures in the EU by 2025 (3.5M in 2010) 4.5M Percent increase in the annual years of healthy life lost per 100K people with rheumatoid arthritis in France from 1990 to 2013 11%

Joint Replacement Volume Increases Tied to Demographic Shifts Source: Canadian Institute for Health Information, “Hip and Knee Replacements in Canada, 2014–2015: Canadian Joint Replacement Registry Annual Report,” CIHI; Organization for Economic Cooperation and Development, “Historical population data and projections (1950-2050),” OECD Stat ; Service Line Advisor research and analysis. Elderly Populations Projected to Grow Worldwide Demand Trends: Population Ageing Elderly Population Projections 2015-2025 Country 65+ in 2015 65+ in 2025 Projected Increase India 70.1M 102.2M 46%Canada5.8M 8.1M40%World 604.0M834.4M 38%Australia3.6M 4.9M37% France12.2M 14.9M22%Belgium 2.1M2.5M 21%UK11.6M 13.9M 20%Sweden 1.9M2.2M 15% Germany17.2M 19.6M14% Canadians over 65 years undergo joint replacements at a rate 9 times that of Canadians under the age of 65 9x

Joint Replacements and Sports Medicine Drive Australian Orthopaedics Australia Sources: Australian Institute of Health and Welfare, “Admitted patient care 2014-15: Australian hospital statistics chapter 6,” AIHW; Service Line Advisor research and analysis. Australian Surgical Volumes Reliant on Orthopaedics Australian Surgeries by Diagnostic Grouping FY2015; Public and Private Hospitals Australian Orthopaedic Surgeries by Subspecialty FY2015; Public and Private Hospitals

Joint Replacements Largest Single Orthopaedic Subspecialty England Sources: National Health Service, “Hospital Admitted Patient Care Activity, 2015-2016: Procedures and interventions,” NHS Digital; Service Line Advisor research and analysis. Orthopaedics Key Component of NHS Volumes NHS England Procedures and Interventions by Specialty FY2015 NHS England Orthopaedic Procedures by Subspecialty FY2015

Demand Forecast: Ambulatory Shift Sources: National Health Service, “Hospital Admitted Patient Care Activity, 2011-2016: Procedures and interventions,” NHS Digital; Service Line Advisor research and analysis. Orthopaedics procedures English Orthopaedics Procedures Moving Ambulatory NHS England Ambulatory Orthopaedic Procedures FY2011-FY2015 Ambulatory Growth 6% Inpatient Growth -1% NHS England Orthopaedics 1 Growth FY2011-FY2015 Orthopaedics Largest Specialty by Ambulatory Procedure Volumes

Demand Trends 1 2 Clinical and Technological Innovations 3 Implications for Providers

Clinical and Technological Innovations Orthopaedic Services Technology Adoption Curve Bone Morphogenic Protein Computer-Assisted Surgery Minimally-Invasive Spine Surgery Vertebral compression fracture treatment Minimally- Invasive Total Hip Replacement Modality Conservative Late Majority Early Majority Early Adopter Progressive Spine Surgery Hip Replacement Knee Replacement Sports Medicine & Extremity Joint Replacement Shoulder Repair Cartilage Repair High- Definition Arthroscopy Reverse Shoulder Arthroplasty Total Ankle Replacement ESWT 9 X-STOP MI Spine Surgery 3 Laminectomy & Discectomy Spinal Fusion Dynamic Stabilization BMP 1 Vertebro-plasty Artificial Discs BMP 1 Alternatives Metal-on-Poly Hips MI THR 5 Hip Resurfacing Metal-on-Poly Knees High Flexion Knees UKR 6 MI TKR 7 Patient-Specific Knees Robotic Guidance Ceramic Knees E-poly Liners Spinal Cord Stimulation Musculoskeletal Ultrasound CAS 2 Spine iO-Flex Elbow Replacement Alternative VCFT 4 Antibiotic Bone Cement Tendon/Ligament Repair PRP 10 Kypho-plasty Mobile Bearing Knees BKR 8 E-poly Knees CAS 2 Joint Replacement Hana® table Unicompartmental Knee Replacement Minimally-Invasive Total Knee Replacement Bicompartmental Knee Replacement Extracorporeal Shockwave Source: Service Line Advisor research and analysis.

Identify Sources of New Volumes Before Making Costly Investment Clinical and Technological Innovations Financial Success of Robotics Depends on Growth Source: Service Line Advisor research and analysis. Promote Clinician Alignment Leverage surgical robots to win a greater share of surgeon business Potential Sources of Robotic-Driven Volumes Growth Reach New Patient Populations Use surgical robots to reach new patient populations in need of unicompartmental knee replacements Brand as an Advanced Programme Feature surgical robots in direct-to-consumer marketing to promote reputation as a progressive orthopaedics programme

Technologies Reach New Patients and Increase Programme Progressivity Clinical and Technological Innovations Technology Pipeline for Orthopaedics Source: Service Line Advisor research and analysis. Navigational Robotic Devices Provides guidance to ease surgery and improve surgical accuracy MI Joint Replacement Minimises scarring and reduces blood loss Platelet-Rich Plasma Fills gap between traditional conservative care and surgery Assistive Technologies Minimally Invasive Techniques Regenerative Therapies 3-D Printing Supports patient education and preoperative planning MI Spinal Fusion Enables earlier recovery and Ambulatory shift of simpler fusions Autologous Chondrocyte Implantation Restores damaged knee cartilage

Simulated Surgery on Printed Models Aids Preparation for Surgery Clinical and Technological Innovations 3D Printing Supports Pre-Operative Planning Stages of Orthopaedic Surgery Supported by 3D Printing Clinician describes surgery using 3D model of patient’s hip Patient receives fully customised implant Patient Education Preparation for Surgery Implant Manufacture Orthopaedic Surgery Clinicians test surgical approaches on 3D model of patient’s hip Manufacturer creates patient-specific implant or cutting guide based on model Case in Brief: Mayo Clinic Mayo Clinic clinicians uses a CT scan to develop a 3D image of the patient’s hip joint, then used a 3D printer to create an exact model of her hip Clinicians use the 3D-printed hip in explaining the surgery, testing different surgical approaches, and to guide manufacture of a patient-specific implant Source: Mayo Clinic. “3D Printer Helps Hip.” http://www.mayoclinic.org/tests-procedures/hip-replacement-surgery/multimedia/vid-20078391; Service Line Advisor research and analysis.

Lower Blood Loss Helps Drive Down LOS, Enables Ambulatory Operation Clinical and Technological Innovation Peng et al. “Clinical and Radiological Outcomes of Minimally Invasive Versus Open Transforaminal Lumbar Interbody Fusion” Spine. 1 June 2009 - Volume 34 - Issue 13 - pp 1385-1389; Smith et al., “Ambulatory Minimally Invesive Lumbar Interbody Fusions: Predictive Factors and Clinical Results,” Spine , February 2016; Service Line Advisor research and analysis. Minimally Invasive Transforaminal lumbar interbody fusion Minimally Invasive Versus Open TLIF 2n = 29 MI, 20 open “Outpatient Minimally Invasive Lumbar Interbody Fusion: Predictive Factors and Clinical Results,” Spine , February 2016 Select patients, by health and indication, can safely be treated as outpatients with XLIF or other modern MIS approaches. MI Fusion as a Tool for Total Cost Control Lower LOS associated with minimally invasive fusion supports reduced hospital cost Ambulatory fusion allows for lower cost than inpatient fusion, and serves as a differentiator in winning surgical spine patients MI 1 Spine Techniques Enable Short-Stay Fusions

Ambivalent Clinical Literature Limits Payer Coverage Clinical and Technological Innovations Source: Howson, Nick, “Chelsea captain John Terry undergoes PRP treatment in effort to return from Achilles injury” International Business Times, 2016, http://www.ibtimes.co.uk/chelsea-captain-john-terry-undergoes-prp-treatment-effort-return-achilles-injury-1554422; Service Line Advisor research and analysis. International business Times Key Considerations to Offering PRP Financial Limited payer coverage 2 necessitates self-pay patient population Clinical Clinical literature remains ambivalent, but PRP offers treatment for patients not yet indicated for surgery Marketing Widespread coverage of biologic use among professional athletes increases demand among athletic population Star Athletes Bringing Attention to PRP 1 Platelet-Rich Plasma Offers Cash-Based Treatment Platelet-Rich Plasma. Covered for some conditions in the UK, such as lateral epicondylitis. Limited to no coverage in Australia and Canada.

Standardised Approach to Outpatient Surgery Optimises Outcomes Clinical and Technological Innovations Source: Kolisek FR, et al., “Comparison of Outpatient versus Inpatient Total Knee Arthroplasty,” Clin Orthop Relat Res, 467 (2009): 1438-1442; Service Line Strategy Advisor research and analysis. Knee Society score. Statistically significant.Improved Clinical Processes Enable Outpatient Shift Well-Defined Patient Selection Criteria Minimally Invasive Surgical Approaches Optimised Pain Management Protocols Minimal Co-Morbidities ASA Grade 1 ora 2 Lower BMI Range (<40) Direct anterior, mini-posterior, other soft-tissue-sparing surgical approaches Improved surgeon proficiency with new techniques Combination of regional anesthesia, other inter-operative agents during surgery Standardised multi-modal post-surgical pain management to reduce readmission risk Mean LOS Knee Score 1 Function Score 1 Satisfaction Score Outpatient 0 94 86 4.8 Inpatient 3 93 86 4.7 P value <0.001 2 0.26 0.966 0.930 Comparison of Inpatient and Outpatient Outcomes for Total Knee Arthoplasty n=64 Technological Advances in Orthopedics Shift Lower Acuity Cases to Outpatient Setting

Increased Awareness of Conservative Care Moderating Surgical Growth Clinical and Technological Innovations Source: Arterburn D, et. al., “Introducing Decision Aids at Group Health Linked to Sharply Lower Hip and Knee Surgery Rates and Costs,” 31, no. 9 (2012): 2094-2104; Service Line Advisor research and analysis. Arterburn DA (2012). Conservative Care Reduces Surgery Rates Pain Management Non-steroidal anti-inflammatory drugs Steroid injection therapy Electromyography Conservative Care Approaches Physical Therapy Physical therapy Physical conditioning Lifestyle Management Medically-supervised weight-loss Glucosamine and condroitin supplements Patients Are Less Likely to Choose Surgery When Aware of Alternative Options 1 Reduction in hip replacements 26% Reduction in knee replacements 38% Reduced costs over 6 month period 12-21%

Orthopaedic Clinical Technology Compendium Insert a 1.5”x1.5” photo of Featured Subject here Additional Resource Use this tool to: Understand key drivers underlying purchase decisions for orthopaedic leaders Learn major orthopaedic and spine technologies available in the market Topic Areas Covered Spine Surgery Hip Replacement Knee Replacement Sports Medicine & Extremity Joint Replacement

Demand Trends 1 2 Volume Forecasts 3 Implications for Providers

Implications for Providers Coordinate Across the Care Continuum Expand Ambulatory Presence Poor coordination, both between providers and with patients, portends worse outcomes and adds unnecessary costs to health care systems, impacting their effectiveness and financial viability Advancements in minimally invasive techniques mean traditionally inpatient-focused programmes must expand their ambulatory presence to ensure they can cost-effectively meet the needs of their communities Optimise Services Across Care Settings The increasing complexity of population needs as comorbidities increase in prevalence and clinical innovations allow for more varied treatment options makes it crucial that health care organisations determine where and which services to offer Service Line Imperatives in an Evolving Market Source: Service Line Advisor research and analysis. Focus Areas for Orthopaedic and Spice Service Line Leaders

Implications for Providers Build Integrated Multidisciplinary Leadership and Care Team Utilise programme-wide committees and representatives from all relevant specialties that meet regularly to discuss initiatives within relevant programmes Create nurse navigator role to coordinate patient care across departments and providers Action Items Source: Service Line Advisor research and analysis. Enhance Collaborative Relationships with Community Providers Engage and follow-up with referring clinicians at key decision points throughout the care continuum, such as diagnosis and treatment initiation Work with community post-acute providers to create standardised discharge protocols, streamline patient transitions between care settings, and track long-term outcomes Share outcomes data with all providers involved in patient treatment, including referring doctors, EMS, and post-acute providers Coordinate Across Care Continuum Develop Standardised Scheduling and Triage Protocols Set condition and provider-specific triage pathways for all incoming patients Ease intake and triage process with centralised scheduling center for orthopaedic services Clearly outline and communicate referral, scheduling protocols to potential patients and community clinicians

Action Items Determine System-Wide Priorities for Orthopaedic Services Align orthopaedic business plan and rationalisation strategy to capitalise on facility strengths and meet local community needs Solicit feedback from all relevant clinician and administrative leaders to ensure consensus on growth priorities Right-Size Investments Across Facilities to Match Long-Term System Goals Develop hubs for specialty offerings to ensure efficient staffing, use of high-end capital equipment, and other strategic investments Communicate system-wide plan for resource investments to all relevant stakeholders to ensure alignment on system goals Source: Service Line Advisor research and analysis. Implications for Providers Optimise Service Distribution Across Care Settings Perform Internal and External Audits of Specialty Orthopaedic Offerings Fill service gaps to provide comprehensive specialty care to patients with varied orthopaedic diseases and care needs Assess what additional services consumers and referring clinicians demand in local service area to identify possible growth opportunities

Action Items Develop Ambulatory Access Points to Drive Volume Growth Consider investment in orthopaedic urgent care facilities to satisfy patient demand for convenient alternative to emergency department for acute orthopaedic injuries Invest in ambulatory surgical infrastructure to meet growing demand for ambulatory orthopaedic services Broaden Programme Scope to Tap Into Increasing Demand for Non-Surgical Services Integrate physical therapy, physiatry , and pain management into programme care delivery model to meet growing demand for non-surgical, conservative care Develop medically integrated wellness services to create new revenue streams, generate downstream referrals to traditional clinically-based orthopaedic services Demonstrate Ambulatory Surgery Preparedness to Ease Access Constraints Implement patient selection process to optimise ambulatory surgery outcomes Apply multi-modal pain management protocols to enable reduced length of stay or same-day discharge, reduce risk of readmission following discharge Source: Service Line Advisor research and analysis. Implications for Providers Expand Ambulatory Presence