The Outlook for Orthopedic Devices, Implants, Robotics and More (January 26, 2022)




In this episode of the Advancing Surgical Care Podcast, Charlie Leonard of the ASCA public affairs team talks with Carol Stanfill, vice president, US ambulatory surgery centers, at DePuy Synthes, about the outlook for outpatient orthopedic surgery and the expanding use of medical devices, implants, robotics and more. DePuy Synthes is the orthopedics company of Johnson & Johnson, and Carol Stanfill leads the company’s ASC capabilities team nationwide, giving her a distinct perspective on both current market conditions as well as the continued migration of orthopedic procedures to the outpatient setting.

This episode was recorded in late December 2021.

Narrator: 0:06
Welcome to the Advancing Surgical Care Podcast brought to you by ASCA, the Ambulatory Surgery Center Association. ASCA represents the interests of outpatient surgery centers of every specialty and provides advocacy and resources to assist them in delivering safe, high-quality, cost-effective patient care. As with all of ASCA’s communications, please check to make sure you are listening to or viewing our most up-to-date podcasts and announcements.

Charlie Leonard: 0:37
Hello, and welcome to the Advancing Surgical Care Podcast brought to you by the Ambulatory Surgery Center Association, or ASCA. My name is Charlie Leonard, and I am a member of ASCA’s public affairs team and the host of this episode. On this podcast, I’m pleased to welcome Carol Stanfill, vice president, US ambulatory surgery centers at DePuy Synthes, the orthopedics company of Johnson & Johnson. DePuy Synthes, as many ASCA members know, is a leading ASCA affiliate and provider of orthopedic devices, implants, robotics and more. We’ve asked Carol to come on the podcast today because she leads her company’s ambulatory surgery centers capabilities team. And in that capacity, we were eager to hear her assessment of the current marketplace, as well as her outlook for further migration of orthopedic procedures to the outpatient setting. Carol has led sales and marketing teams in multiple markets, both domestically and internationally. Carol received her undergraduate and graduate degrees from Southern Methodist University and an MBA in global management from the University of Antwerp in Antwerp, Belgium. She joins us today from her office in Dallas, Texas. Carol, welcome to the Advancing Surgical Care Podcast.

Carol Stanfill: 1:47
Hi, Charlie. Thank you for the warm welcome.

Charlie Leonard: 1:49
Well, thank you. So, Carol, we really do appreciate you spending some time with us today. As you know, there are several factors that have contributed to the growth of outpatient orthopedic procedures over the last 10 years. In operating rooms, we’ve seen improvements in anesthesia, surgical techniques, implants and devices, and postoperative pain management. But we’ve also seen wider acceptance and appreciation on the part of Medicare and commercial payers alike for the added benefits that outpatient settings provide. This is particularly true of ASCs that have a proven track record of delivering excellent quality at much lower cost than their inpatient counterparts. We’d be very interested to hear your perspective on the changes that have taken place over the last decade or so, and particularly as it relates to medical devices, implants and robotics, your business, and how they’re helping us enable outpatient procedures and better outcomes for the patients.

Carol Stanfill: 2:40
Yes, many changes in outpatient care, especially freestanding ambulatory surgery centers, over the last decade. We see positive outcomes around some of our strongest implant brands and solutions. And when those are coupled with improvements in anesthesia and pain management, which you rightly mentioned, surgeons can consider the move from inpatient to outpatient or to freestanding ambulatory surgery centers, and they can look to make that shift safely. We’re particularly excited about how digital technology continues to rapidly shape the future of healthcare across multiple orthopedic specialties, in both the hospital and outpatient settings. ASCs, as you know and your audience knows, are a fast-moving area of care with rapidly changing needs and shifting situations. And they provide alternative sites of care for both the surgeon and the patient. These freestanding, lower-cost sites of care are poised to incorporate advanced offerings in robotics and enabling technology, which can help confirm that patients are prepared for surgery, help promote an efficient procedure and help facilitate good patient postsurgical behavior. In regard to robotics, I’ll mention our Robotic-Assisted Solution for knee arthroplasty is just one solution of many under the DePuy Synthes VELYS™ Digital Surgery offering, and I can provide a couple of examples of those, Charlie, and how this comes to life for us. First is the direct anterior approach for hip surgeries, which DePuy Synthes has helped pioneer with our implants and technologies for many years now. This muscle-sparing surgical technique is associated with less pain, faster recovery and reduced length of stay versus traditional approaches. It’s an exciting solution made possible by technology advances like the KINCISE™ Surgical Automated System, which is used to automate steps in hip replacement surgery, and our VELYS™ Hip Navigation, which provides actionable data to help increase accuracy, reduce OR time and improve patient outcomes. Another example, if we shift to knee arthroplasty, is the VELYS™ Robotic-Assisted Solution. Our Robotic-Assisted Solution is a next-generation, first-of-its-kind, table-mounted offering. It has a smaller footprint than existing robotic systems for flexibility in both the hospital and the ASC setting. And the VELYS™ Robotic-Assisted Solution—it works with the ATTUNE® Knee System. This is also a next-generation technology from DePuy Synthes; it’s been shown to improve patient-reported outcomes by working in harmony with the patient’s anatomy to deliver both stability and motion through propriety technologies. Together, all of these technologies aim to define a high standard for patient performance and elevate overall knee or hip replacement experiences.

Charlie Leonard: 5:27
Wow, lots going on. Let me ask you for a couple of data points if I could. What do you see in terms of the growth of the market? Obviously, we’re living longer and, more importantly, we’re living more active lives and we’re seeing more of this surgery today. What’s your outlook for, say, the next decade?

Carol Stanfill: 5:42
Growth is significant in the ASC channel for sure. We are seeing more surgeries move to the ASC setting, and we expect that trend to continue. We’re also seeing that this landscape is emerging and changing rapidly. The needs can be different, not just from surgery center to surgery center, but literally right now month to month within each ASC. We estimate so far this year up to 21 percent of joint replacement procedures have been done in an ambulatory surgery center. And that’s part of a larger trend that’s being driven by advances in technology, pain management, that you mentioned before, that allow these surgeries to be done more efficiently and safely. And no doubt, COVID has been a tailwind, especially for patients who are trying to stay out of the hospitals. They’re asking surgeons about alternative sites of care, and look—moving more procedures to the outpatient setting has been a way to help reduce the possible spread of the virus and help preserve hospital capacity for treating acute cases of the infection. But I have to say, it was a trend that was already well underway for both economic and clinical reasons prior to COVID. Earlier, you briefly touched on how Medicare has been working to move outpatient orthopedic procedures for many years and that’s true. ASCs are a lower-cost environment where surgeons are able to perform procedures that lead to good patient care, and that’s a goal everyone shares. Also, as you rightly noted, the aging population that’s looking to keep up an active lifestyle, that’s a big driver of the growth of these outpatient surgeries.

Charlie Leonard: 7:18
You know, what I’d love to do is come back for a moment and talk about your robotics offerings and the growth of robotics in the operating room. In our conversations with ASC administrators, particularly of standalone ASCs, we often hear that they too are excited by the prospect, but the cost is beyond the reach of a standalone ASC, particularly if it’s a multipractice ASC. So, it’s a real specialty within a specialty. That’s obviously an anecdotal perspective. Can you comment on what you’re experiencing in terms of your outreach with ASCs?

Carol Stanfill: 7:47
Yes, the emergence of robotics in orthopedics is exciting. In fact, all our new technologies and solutions are. Our goal is to bring technology to the surgeon entrepreneur, who we know in this setting is taking on much more responsibility, and our goal is to help support a connected operating room. And therefore, we’re bringing many exciting technologies, including robotics, to the OR. Building on our legacy of innovation, we are evolving from an orthopedics product innovation company to an orthopedics med tech company, with advancements like robotics, enabling technologies that meet the changing needs of our customers and patients in the ASC. So, a few minutes ago, we discussed the VELYS™ Robotic-Assisted Solution for use with the ATTUNE® Knee System. This is a next-generation, robotic-assisted solution with a sleek, compact footprint. It doesn’t require a preoperative CT image, and it’s well-suited for a high-efficiency, outpatient environment such as an ASC. If you ask a surgeon if a robotic solution was less invasive, I think they would use the IM canal as one example. With a robotic solution you can avoid disrupting the femoral intramedullary canal, which has historically been used for cutting block placement. From an accuracy perspective, the robotic-assisted solution adapts to the surgeon’s workflow and is designed to give them the control they’re used to, and it helps them execute accurate bony cuts.

Charlie Leonard: 9:14
Carol, as you know, the Centers for Medicare & Medicaid Services, or CMS, last month released the final payment rule for 2022. Gratefully, one of the changes that ASCA had long advocated for relates to device-intensive procedures, and that was inserted in the rule, improving the payment and improving the number of procedures on that list. So now beginning in January, any procedure for which the device cost is 30 percent or more of the overall ASC procedure rate, CMS will treat those procedures as device-intensive and therefore qualify for better reimbursement. Consequently, 77 additional procedures that are performed in ASCs will now qualify as device-intensive, providing a more rational level of reimbursement for these procedures. We see this as a win, really, for ASCs, manufacturers and the taxpayers, since ASCs will still be the lower-cost site of care regardless. So, what’s your view of how this could affect the ASC market for these procedures?

Carol Stanfill: 10:07
The ongoing shift in emphasis toward value-based care that predated COVID was already making ASCs competitive with inpatient options for orthopedic surgery. And expanding coverage of outpatient surgery during the pandemic could even accelerate that trend. So for example, [in 2020], CMS removed total hip replacement and lumbar spinal fusion from the inpatient-only list and added total knee replacement to the list of procedures covered by ASCs. And every time CMS moves a procedure from inpatient-only designation to allow it to be done outpatient as well, it signals a belief in the safety of this approach. It means CMS recognizes that surgeons have demonstrated they can deliver quality outcomes in the outpatient setting. Each year when CMS recalculates device offset percentages, it of course can impact ASC payments, which can impact a surgeon or a patient’s decision to have their procedure done in the lowest cost of care setting. In the past, how this was calculated has led to some conflicts for ASC payments, and the procedure could be considered device-intensive in the hospital outpatient setting, but not in the freestanding ambulatory surgery center. But because CMS has finalized its proposal for [2022] to assign that device-intensive status to procedures performed in ASCs, we see that as a step in the right direction. Of course, we’re going to continue to monitor how this new methodology will impact DePuy Synthes procedures in 2023 and the ASC proposed rule, but yes, today we too see this as a win-win-win. And one more thing, Charlie, I think it’s also important to note that CMS is not the only entity introducing innovations in payments that make ASCs a sensible option for patients and surgeons alike. We see bundled payment programs from commercial insurers that allow patients to share cost savings and also provide a rationale for moving procedures to the ASC setting as well.

Charlie Leonard: 11:58
Carol, it sounds like DePuy Synthes and ASCA are in complete agreement about the future prospect of this marketplace. We believe it will continue to grow and will be of considerable demand for orthopedic surgeries and procedures. Today, however, there are some headwinds largely due to the pandemic. I’m curious what advice you would give a surgeon or a surgeon entrepreneur today who is considering the prospect of opening a new ASC.

Carol Stanfill: 12:23
Yes, the landscape is definitely emerging and changing all the time. One thing remains constant, I believe, surgeon entrepreneurs are taking on much more responsibility in this setting. So, for example, they don’t have access to the same infrastructure that they do at a large system that has dedicated functions like billing, reimbursement, sterilization centers or even staff training. And this is where DePuy Synthes’ ASC focus team can really help. Starting a new ASC is a journey and, as I know you know, Charlie, they are all very unique. So, surgeons who are starting ASCs are in most cases already familiar with the DePuy Synthes products and the services from their work in hospitals. To meet the additional needs of surgeon entrepreneurs, especially those going in starting their own ASC, we tailor our solutions to meet the needs that each ASC encounters as they go through this journey. So, for example, we offer ASC education and in-service training featuring a wide range of ASC focus education, like live events, ASC preceptorships, on-demand learning, podcasts and more, to support customers who are at different stages in their journey. We also offer tools like spend analysis, construct-based pricing and efficiency models to help surgeon entrepreneurs understand the overall savings available when they partner with us. And we have various tools to help with supply chain optimization to improve efficiency, decrease complexity, which can be a killer in the ASC, and reduce waste—all of these things can sometimes be associated with procurement. And that’s just a few of the things that we try to do with the ASC focus team. So, just like with our implants and technology, we aspire to build trust and sustain long-term solutions with both the surgeons and the administrators with whom they work.

Charlie Leonard: 14:16
Carol, thank you so much for that and for all the time you spent with us today. We could go on and on—there’s a lot to talk about but maybe we’ll have you back again sometime soon. For now, let me just say thank you to you and to DePuy Synthes for your support of ASCA and for your participation in the ASCA Affiliate Program. We look forward to seeing you as an exhibitor in Dallas come April, and so maybe we can continue the conversation there.

Carol Stanfill: 14:40
Sounds great, Charlie. Thank you for the time. See you in Dallas in April.

Charlie Leonard: 14:43
Okay, thank you. So, this concludes the podcast. We want to thank you for listening and please continue to follow your local public health guidance.