White Paper: Comprehensive Care for Joint Replacement (CJR) ROI Model – Comparative Analysis of...

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A Frost & Sullivan White Paper www.frost.com 50 Years of Growth, Innovation and Leadership Comprehensive Care for Joint Replacement (CJR) ROI Model – Comparative Analysis of Robot assisted versus Conventional Surgical Technique

Transcript of White Paper: Comprehensive Care for Joint Replacement (CJR) ROI Model – Comparative Analysis of...

Page 1: White Paper: Comprehensive Care for Joint Replacement (CJR) ROI Model – Comparative Analysis of Robot assisted versus Conventional Surgical Technique

A Frost & Sullivan White Paper

www.frost.com

50 Years of Growth, Innovation and Leadership

Comprehensive Care for Joint Replacement (CJR) ROI Model – Comparative Analysis of Robot assisted versus Conventional Surgical Technique

Page 2: White Paper: Comprehensive Care for Joint Replacement (CJR) ROI Model – Comparative Analysis of Robot assisted versus Conventional Surgical Technique
Page 3: White Paper: Comprehensive Care for Joint Replacement (CJR) ROI Model – Comparative Analysis of Robot assisted versus Conventional Surgical Technique

Frost & Sullivan

TA B L E O F C O N T E N T S

Abstract ................................................................................................................................4

Introduction ..........................................................................................................................4

Expanded Surgical Goals for Total Knee Arthroplasty with CJR ...........................................5

The Comprehensive Care for Joint Replacement Conundrum ...............................................5

Creating the Prototypical Hospital for TKA Analysis ............................................................7

Gathering TKA Revenue for Acute and Sub-acute Care ........................................................8

Adding Hard cost Data Based on a Cost per Procedure Methodology ...................................9

Applying Soft Cost and Cost Avoidance Data .......................................................................9

Conclusion ............................................................................................................................12

Appendix ..............................................................................................................................13

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Comprehensive Care for Joint Replacement (CJR) ROI Model – Comparative Analysis of Robot Assisted versus Conventional Surgical Technique

4 All rights reserved © 2017 Frost & Sullivan

ABSTRACTIn November of 2015, the Centers for Medicare and

Medicaid Services (CMS) published its final rule for the

Comprehensive Care for Joint Replacement (CJR) pilot

program, which is a mandatory bundled payment initiative

for total hip and knee arthroplasty. The pilot program,

which began 1 April 2016, involves 67 metropolitan

statistical areas (MSAs) and 767 hospitals. A bundled

payment, as defined by CMS, is a single spending goal for

all applicable and related healthcare services consumed

during a documented clinical episode of care over

a designated time. The ultimate overarching goal for

this pilot CJR study is to establish attainable financial

incentives for surgeons to better oversee and coordinate

all aspects of care across the care continuum. Along with

a new alignment of incentives, CMS also hopes to lower

all reimbursements for total knee arthroplasty (TKA) and

is projecting a savings of $153 million to $343 million in

the first five years without increasing adverse events such

as readmissions or increasing discharges of patients to

expensive skilled nursing facilities (SNF). This paper places

a focus on how robotic-assisted surgical devices (RASD)

may help achieve this goal.• Assumption: Robotic-assisted knee replacement

surgery may offer the potential of producing cost-effective clinical outcomes through consistent and reproducible post-operative knee alignment and knee balance in TKA. This investigation will seek to establish whether robotic-assisted surgical methodology for TKA generates higher-quality outcomes and reduces costs per procedure, which then benefits both the orthopedic surgeon and patient.

• Objectives: Develop a functional return on investment (ROI) model for TKA and compare the cost effectiveness of two robot-assisted surgical systems to the conventional surgical technique.

• Methods: Primary and secondary research involving three practicing orthopedic surgeons whose hospitals each perform over 400 TKA procedures a year. Data was collected over a seven-month period from each of the three hospitals where these surgeons perform conventional and RAS surgery.

• Results: OMNIBotics® outperformed conventionally instrumented TKA cases in time to discharge, recovery to self-sufficiency, reduced readmission rate, and recovery to normal working and living activities.

• OMNIBotics® created a superior ROI in the CJR model due to pricing, operating room (OR) procedure time (minutes), learning curve and training for both orthopedic surgeons and staff, and cost of replenishing surgical supplies and instruments per procedure.

• Based on known information on other robotic systems, (Stryker Mako, S&N Navio), it is not clear a similar ROI can be achieved due to the high acquisition and maintenance costs of their robotic systems.

Key Finding: Empirical evidence indicates the

OMNIBotics® RASD is more cost effective, less invasive

and produces better-quality TKA outcomes in a CJR

environment than conventional surgical technique for

MS-DRG 469 and 470. Moreover, the OMNIBotics®

business model offers immediate ROI without the need

to amortize an initial capital investment to acquire the

base robotic surgical system and without the ongoing

additional costs of annual maintenance agreements.

INTRODUCTIONHealthcare in the United States today is undergoing

unprecedented change. With the signing of the Affordable

Care Act (ACA) into law in March 2010, CMS has

taken bold steps to better align incentives for better

quality outcomes, while lowering the cost per capita for

care received. A clear demonstration of where CMS

is headed with its proposed multi-faceted, value-based

reimbursement agenda can be seen with its CJR pilot

study final rules published 16 November 2015, as the first

of its mandatory bundled payment initiative guidelines.

CJR calls for a comprehensive overhaul of how providers

and hospitals alike manage and coordinate care for lower

extremity joint replacement.Hospitals are also being

asked to assume and share risk under CJR. Focus will be

on achieving better coordinated care, medication regimen

compliance, improved patient experience, discharge

planning, and increased emphasis on post-acute care

utilization.

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1. The two C-RAS devices are, Stryker-Mako Robotic-Arm Assisted Surgery and OMNIBotics®, a robot-assisted surgical platform.

2. Mean = arithmetic average (Total cost for all surgeries divided by the number (N) of surgeries)

CJR also calls for closer coordination between hospitals

and orthopedic surgeons to reduce the cost variance

for Lower Extremity Joint Replacement (LEJR) surgeries.

Moreover, the intent of CJR also calls for post-acute

care coordinators to plan more collaboratively with

hospitals to establish more efficient and cost-effective

care for CJR patients. As the first bundled-payment

mandate, CJR was conceived in large part to assist in

achieving the goal set by Health and Human Services

(HHS) Secretary Burwell to move 50% of CMS payments

to a value-based methodology (as opposed to volume-

based methodology) by 2018. With over 400,000 LEJR

documented procedures a year, CMS chose LEJR as a

basis to test the impact of cost and quality interventions

usinga bundled payment methodology for TKA.

In response to CJR, RASD original equipment

manufacturers (OEMs) are also actively exploring and

developing surgically assisted robotics that specialize in

total knee and hip replacements. As this paradigm shift

in reimbursement and horizontal integration of services

unfolds, many questions about the economic viability and

efficacy of RASDs arise. Moreover, as more robot-assisted

devices engineered and designed uniquely for TKA enter

the market, what are the comparative data fields or

dependent variables to be assessed to determine product

superiority? How will hospitals and health systems and

orthopedic surgeons determine the best RASD?

Data and insights were gathered through primary and

secondary research conducted by Frost & Sullivan

analysts. Specific provider impressions and views were

obtained by working with three orthopedic surgeons

and OMNI’s OMNIBotics® System from three different

hospitals where more than 400 TKA surgeries are

performed annually.

EXPANDED SURGICAL GOALS FOR TOTAL KNEE ARTHROPLASTY WITH CJRWith a rising occurrence and diagnosis of osteoarthritis

in the United States (US), the number of primary total

knee arthroplasties continues to grow exponentially.

Clinical outcomes have steadily improved with the advent

of a more definitive preoperative assessment, a growing

range of component choices, and expanded operative

techniques that now include orthopedic robot-assisted

surgical systems. For the content of this manuscript,

Frost & Sullivan analyzed two unique C-RAS devices1

comparatively, while analyzing conventional TKA surgical

techniques to arrive at its findings.

THE COMPREHENSIVE CARE FOR JOINT REPLACEMENT CONUNDRUMWith the publishing of the final CJR rules in November

2015, close to 800 participating hospitals and their

respective orthopedic service lines began re-engineering

their analyses of current surgical TKA volume, cost

structure, and quality of care. They first looked at (per

the CJR directive) the past three years of collective

TKA data, which produced a fiscal cost per procedure

based on previous billing for MS-DRG 469 and 470.

Descriptive statistics provide a minimum and maximum

charge and mean2 value for TKA in this same time

period. Within this minimum and maximum charge

range, the variance, or how TKA charges cluster around

the mean value, can be calculated (standard deviation).

If data distribution is normal, approximately 68% of the

data will be within one standard deviation of the mean

(mathematically, μ ± σ, where μ is the arithmetic mean);

about 95% are within two standard deviations (μ ± 2σ).

This proposed methodology of reducing the variance to

within two standard deviations from the mean will, in

theory, eliminate approximately 5% of the most expensive

outlying procedures.

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Exhibit 1—Typical Cost Variation for Total Knee Replacement (90-day Episode of Care), Dallas, Texas, 2014

Market Minimum Charge Maximum Charge Variance Average Cost

Dallas, Texas $16,772.02 $61,584.86 267% $39,622.96

Source: BlueCross BlueShield, A Study of Cost Variations for Knee and Hip Replacement Surgeries in the U.S., 21 January 2015

As a result of reducing TKA charges to within two standard deviations of the average hospital charge, hospitals are

now expanding analysis to cost and quality of care contributors. Data collection begins 72 hours prior to admission

to an acute care hospital and ends 90 days after discharge. Bundled payment includes all related services covered

under Medicare Part A and B within the 90-day entitlement. This bundled payment also includes all services deemed as

diagnostic, such as imaging and laboratory services, related to the patient admission (See Exhibit 2).

Included Services Excluded Services

Physician Services

Acute clinical conditions not arising from existing episode-related chronic clinical conditions or complications of the Lower Extremity Joint Replacement (LEJR) surgery

Inpatient Hospitalization (includes readmit)Chronic conditions that are generally not affected by the LEJR procedure or post-surgical care

Skilled Nursing Facility (SNF)

Home Health Agency

Hospital Outpatient Services

Physical & Occupational Therapy

Radiology

Clinical Laboratory

Durable Medical Equipment (DME)

Part B Drugs (inside the DRG)

Exhibit 2—TKA Bundled Payment Included and Excluded Services

Source: Premier, Inc., Advisor Live, “Reviewing the Comprehensive Care for Joint Replacement Model Proposed Rule,”July 2016

With this paradigm shift in capturing cost and quality

health information, hospital C-Suite3 leadership and

orthopedic department chiefs will be asked to evaluate

their level of performance in terms of quality outcomes

and fiscal accountability. This analysis will ultimately lead

to a structured dialogue evaluating the ratio of

robot-assisted surgeries to conventional surgeries.

With this broadened investigation, specific and cogent

nuances between robot-assisted and conventional

surgery of the entire patient episode will emerge in

terms of surgical procedure time, readmission rate (%),

revision surgery rate (%), inpatient length of stay (ALOS),

outpatient procedure efficacy, rehabilitation time (weeks),

and home recovery.

3. C-Suite is in reference to hospital leaders such as the CEO, COO, CFO, CMO, etc.

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Paramount to this decision matrix will be the need to

gather information necessary to arrive at a strategic

pathway for minimizing variance, and improving quality

outcomes and the patient experience for TKA.

In this process, hospital CEOs and orthopedic surgeons

will need to discuss the consistency that RASDs

contribute to meeting CJR requirements. Currently,

nationally only 2% to 3% of TKA procedures involve a

RASD.

Moving forward in an era of bundled payments and

CJR policy, how will this ratio of RASD to conventional

surgical technique increase, stay the same, or decrease?

Ultimately, the procedure that offers the best net margin

contribution or earnings before interest taxes and

amortization (EBITA) and demonstrates ability for a

sustainable ROI will prevail.

To date, little scientific literature has been published to

address these fundamental business questions. To answer

these concerns, Frost & Sullivan developed a qualitative

process for evaluating the performance of RASDs to

compare how robot-assisted performance measures up

to a conventional knee-replacement surgery.

CREATING THE PROTOTYPICAL HOSPITAL FOR TKA ANALYSISIn creating the CJR rules, CMS provided some planning

metrics for hospital administrators to compare their

current findings as they ramp up to meet CJR directives.

Frost & Sullivan adopted many of these same heuristics

to provide both utility and validity to a proposed process

for comparative analysis of TKA surgical methodology.

The first step was to build a prototypical hospital with

300 licensed beds that performs 400 TKAs a year.

CMS is using 400 TKAs as the baseline for comparing

performance between hospitals. Frost & Sullivan chose

Dallas, Texas, for its location for this typical hospital

because its cost variation for TKR procedures has the

greatest percentage differential between the minimum

and maximum scores (or variance) in the country.4 This

minimum/maximum comparison is the same that is

utilized by CMS in its analysis for determining if a hospital

is under or over its established TKA spending target. If

a hospital achieves a score below the spending target

and meets the quality performance measures, it will be

eligible for a reconciliation (incentive) payment based on

performance. Conversely, if a hospital comes in above its

spending target, it must repay Medicare through assigned

penalties.

Exhibit 3—Hypothetical Hospital Baseline Total Knee Arthroplasty (TKA) Charges Statistics

Scenario Minimum Mean Maximum % Variance

Hypothetical Hospital Case

$37,662 $41,042 $43,133 15%

Source: BlueCross BlueShield, A Study of Cost Variations for Knee and Hip Replacement Surgeries in the U.S., 21 January 2015

For orthopedic surgery, this hypothetical hospital makes use of the STRYKER-MAKO Surgical System (Appendix -

Illustration 1 –STRYKER-MAKO RASD),5 OMNIBotics® robot-assisted surgical platform (Appendix - Illustration 2 –

OMNIBotics®), and conventional surgery technique. By including two RASDs in this qualitative model, Frost & Sullivan is

demonstrating a process for performing analysis and ROI modelingfor RASD products along with conventional surgery

data simultaneously.

4. Source: BlueCross BlueShield, The Health of America Report, January 21, 2015

5. At present time, the STRYKER-MAKO RASD is capable of Partial Knee Replacement (PKR). Total knee arthroplasty has been FDA-cleared and is anticipated to be widely launched in 2017.

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6. Financial figures shown in this analysis for Medicare reimbursement do not reflect risk-adjusted calculation.

This hospital has 300 licensed beds, a documented average length of stay (ALOS) for TKA of 2.8 days, and a 90-day, post-

operative readmission rate of 4%. Finally, this same facility is carrying a capital expense amortization of $1.2 million over

seven years following the purchase of a STRYKER-MAKO Robotic Arm. This same device can carry a four- or five-year

service agreement at approximately $120,000 to $135,000 per year with a subsequent offering to purchase surgical

modules.Each procedure consumes approximately one $800 sterile surgical kit, a specialized orthopedic surgical blade

priced at $140 to $160, and an assortment of sterile pin kits at an estimated additional $238 per procedure.

GATHERING TKA REVENUE FOR ACUTE AND SUB-ACUTE CAREWith each surgical procedure, a hospital generates

revenue based on its ability to code and bill accurately

for its services. This process includes knowledge of

which payor to bill as the primary, secondary, or tertiary

insurance carrier. In this analysis, Frost & Sullivan is

using Medicare as its basis for fiscal reporting as CJR

participation is for Medicare beneficiaries only—

specifically, Medicare Part A and B entitlements. Pharmacy

benefits calculated are inclusive of Medicare Part B

(inpatient for 90 days) and authorized costs are for

MS-DRG 469 and 470, not Medicare Part D.

Applying this methodology, the hospital then receives

revenue for each TKA in the form of Medicare Part A

(hospital facility fees) and Medicare Part B (physician

fees and prescribed pharmaceuticals consumed as an

inpatient—90-day limit). This foundation for billing then

adds an array of additional hard costs, ultimately receiving

a mark-up based on CMS risk-adjusted reimbursement6

and geographic location weighted-value data, which yields

an average cost-per-case. Exhibit 5 (page 8) illustrates this

average-cost-per case ($39,622.96) and the subtotal for

Medicare reimbursement ($10,000).

# of Beds: 300-bed Hospital 300 Licensed Beds

ALOS for TKA: X Days 2.8

Readmission Surgery Rate 4%

Amortization of Capital: 7 years $1,330,000

Robotic Surgical System Service Agreement (1 year) $133,000

Surgical Instruments and Supplies Contract $1,198

Additional Modules $200,000

Number of TKAs per year: 300-bed hospital performing

approximately 200 to 400 TKA’s annually200 to 400

Exhibit 4—Hypothetical Case Baseline Statistics for TKA (MS-DRG 469 MCC)

Source: Frost & Sullivan

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ADDING HARD-COST DATA BASED ON A COST-PER-PROCEDURE METHODOLOGYBy adding hard costs (surgical kits, sterile pin kits, orthopedic saw blades, pre-operative imaging, clinical lab costs,

implant costs, and post-acute care costs associated with physical therapy, skilled nursing, home care and rehabilitation),

differences in the cost equation using the Min-Mean-Max methodology prescribed by CMS for CJR begin to emerge.

APPLYING SOFT-COST AND COST AVOIDANCE DATAWith improved clinical outcomes, shortened length of stay, reduced rehabilitation times, and hard-cost avoidance

strategies, the OMNIBotics® RASD presents an opportunity for hospitals to achieve tighter variance in the cost-per-

procedure calculation. Moreover, this achievement paves the way to accomplish the two standard deviation confidence

level.

Variable Cost per Case

Total Provider Revenue for TKA (Acute and Sub-acute Care) $39,622.32

Medicare Part A and B (No Medicare Advantage Data) Acute Care Costs

Part A (Hospital Costs) $7,500

Part B (Physician Fees) $1,900

Part B (Pharmacy Fees for 90-day Medicare Inpatient Benefits) $600

SUBTOTAL $10,000

Exhibit 5—TKA Acute Care and Sub-acute Care Revenue (Mean Score)

Source: Frost & Sullivan

Hard Costs OMNIBotics® STRYKER-MAKO* Conventional Surgery

Instruments and Accessories/Consumables

Specifically for Knee (Pins, Saw Blades, Robotic-

assist Kits/ Battery Packs Where Applicable)

$1,100 $1,000 - $1,200 $400

Preoperative Imaging/Scan Costs to Provider

(Knee MRI = $1,197, Leg CT-scan = $634, and

Knee X-ray = $21)

$21 $655 $21

Clinical Lab Costs $171 $150 - $200 $171

Maintenance/Service Contract $0 $333 $0

Implant Cost $4,010 $3,500 - $4,500 $4,010

SUBTOTAL $5,302 $5,638 - $6,888 $4,602

Exhibit 6—Mean Hard Costs Associated with TKA*

* Does not include robotic system capital investment/amortization.

Source: Frost & Sullivan

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Frost & Sullivan has calculated and applied the following soft-cost categories in its process assessment of the potential

cost avoidance analysis contribution for TKA. By adding these calculated values, further separation of cost structure is

presented between OMNIBotics® and the conventional TKA surgical technique.

• Surgical Length of Case/OR Time (Minutes)• Surgical Length of Case/OR Time Cost ($120 per minute)• 90-day Readmission Rate/Redo (%)• 90-day Readmission Rate/Redo Cost ($)• 90-day Readmission Rate (%)

• 90-day Readmission Cost ($)• ALOS Post-acute Care (Medical/Surgical, Skilled Nursing Facility (SNF), Home, and Independent Rehabilitation Facility (IRF))• Average CJR Composite Quality Score• Payor Incentives/Penalties (CJR)

Exhibit 7—Mean Soft-cost Categories for TKA

Source: Frost & Sullivan

Using the CJR Min-Mean-Max methodology allows for

adjustment in surgical expertise, learning curves, and

the overall confidence level in a RASD or conventional

surgical procedure. Evaluating the data below, the

minimum soft costs reflect a surgeon at the height of his

or her skills and the maximum reveals these same soft

costs when the physician is first encountering a RASD or

attempting a more conventional TKA.

In analyzing the data, costs increase with extended OR

time, higher-than-average readmission rates, extended

ALOS and failure to achieve the quality ranking scores

as assigned by CJR. Logically then, surgeons who lack

experience will take more time and, ultimately, cost

more, regardless of which RASD or traditional surgical

technique they employ. The data indicates that the

learning curve of the OMNIBotics® RASD was much

shorter and had fewer readmissions.

Exhibit 8—Soft-cost Application: CMS Min-Mean-Max Methodology

Soft Costs/Cost AvoidanceConventional Surgery

MIN MEAN MAXOMNIBotics®

MIN MEAN MAX

Length of Case/OR Time (Minutes) 40 55 70 43 51.5 60

Length of Case/OR Time Cost ($120/Minute)

$4,800 $6,600 $8,400 $5,160 $6,180 $7,200

90-day Readmission Rate/ % 4% 8% 11% 1% 3% 5%

90-day Readmission Rate/ $ per Re-do(Cost)

$37,450 $49,809 $66,245 $20,377 $27,101 $36,045

ALOS Post-acute Care Bed (Days) 3.5 4.4 5.2 2.8 3.0 3.1

Average CJR Composite Quality Score

12.6 (50th percentile) 16.6 (80th percentile)

Payor Incentives/ Penalties for CJR Calculated by CMS annually Calculated by CMS annually

Post-acute Costs (PT, Rehab, SNF, LTC—Assumes $1,500 per Week)

$16,000 $18,000 $20,000 $7,000 $9,000 $11,000

Source: Frost & Sullivan

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Conventional and OMNIBotics® do not require a

maintenance agreement, so their overall cost structure

is lower than STRYKER-MAKO. This will become critical

as these soft costs are now inclusive in the CJR bundled

payment algorithm.

Data from Exhibit 8 shows that extended rehabilitation

and ALOS can impact quality scores. CMS uses quality-

of-care scores to ensure that patient experience is

improving. By achieving higher quality-of-care percentages,

CMS will increase its incentive payment accordingly by

1% to 3%, with maximum scores of over 95%. Historically,

quality indicators did not factor into cost-per-procedure

calculations. When using CJR and bundled payment

methodology, all aspects of pre-surgery (72 hours) and

all post-acute care parameters (90 days) will need to be

considered.

Looking solely at the mean score in the specific case

of soft costs and cost avoidance analysis, OMNIBotics®

demonstrates advantages over both STRYKER-MAKO

and conventional TKA surgical technique. Because of

the nature of the acquisition cost for the STRYKER-

MAKO and myriad accounting principles that can be

applied over a seven-year amortization period, the net

margin becomes a highly speculative calculation and was

not performed. However, it is important to note when

performing a comparative analysis that the STRYKER-

MAKO acquisition will come with a requirement for

purchasing additional maintenance and instrumentation

resupply contracts.

Therefore, when evaluating a first-year acquisition

capital expense, a three- to seven-year maintenance

agreement will also be a requirement, which may require

amortization to encompass the duration of the contract

and financial obligation beyond the initial capital expense

for the base robotic surgical system.

Exhibit 9—Cost Estimates per TKA Procedure by Surgical Technique

STRYKER-MAKO also requires a maintenance cost which can add $40,000 to $100,000 additional per year. It is amortized

at $333 per procedure ($100,000/300 TKAs per year = $333/procedure).

Source: Frost & Sullivan

$15,000

$20,000

$25,000

$14,302

$19,108

$22,602

$0

$5,000

$10,000

OMNIBotics® STRYKER-MAKO Conventional Surgery

Instruments & Accessories Preoperative Imaging Clinical Lab Costs

Maintenance / Service Contract Implant Cost Post-Acute Care Costs

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CONCLUSIONThe considerable shift in healthcare policy and

reimbursement brought about by the ACA and

subsequent provisions of the law—such as establishment

of the CMS Center for Innovation—has brought with it

sizable challenges across the US care continuum. One

such challenge has been the enactment of CJR.

This challenge to the established hospital industry and

surgeons who perform lower-extremity joint replacement

procedures will require intelligent applications of current

surgical procedures and inclusion of evolving resources

such as RASDs. Presently, the ratio of RASD TKA surgical

procedures to conventional surgery numbers is small

However, by expanding the reimbursement equation to

include a 72-hour pre-op and a 90-day post-op algorithm,

RASD alternatives begin to become a candidate for a new

standard of care. By reaching this Triple-Aim objective

of healthcare,7 costs will come down in direct relation

to improved quality outcomes and improving aggregate

patient satisfaction scores. The remaining challenge

of arriving at a maximum effective ratio of RASD

procedures to conventional surgery must be tackled

sooner than later.

Arriving at this decision will require careful analysis

of the current high acquisition costs associated with

RASD procurement. Hospitals must decide if they can

strategically and financially accept this risk. In response,

RASD OEMs should attempt to ameliorate this cost

equation by offering to lease or simply provide surgeons

and hospitals with RASDs with an agreement that upon

acceptance, the suggested best practice should be for

hospitals and surgeons to reciprocate by agreeing to

perform a specific number of TKA procedures with their

device per year.

Lastly, care must be taken to balance the equation of

volume per surgical modality, be it RASD or conventional,

so that CJR objectives are met. This delicate balance will

qualify hospitals for incentive payments and help them

avoid penalties.

To do this, decision makers will need to fully understand

all forms of revenue and costs associated with the

prescribed entitlement criteria as established by CMS.

By doing this, Frost & Sullivan predicts the OMNIBotics®

RASD will be more cost effective in a CJR environment

than the current STRYKER-MAKO RASD and

conventional surgical TKA technique.

Moreover, the OMNIBotics® business model offers an

immediate economic break-even point for achieving

a ROI, unlike its competitors who require substantial

acquisition costs and enduring maintenance agreements.

7. Must improve the quality of care, the total patient experience, and reduce costs per capita for whatever procedure or service introduced.

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APPENDIXMAKO can be used for PKR, which is a procedure

designed to relieve the pain caused by joint degeneration

due to osteoarthritis (OA) in one or two compartments

of the knee. By selectively

targeting the part of the knee

damaged by OA, surgeons can

replace the diseased part of

your knee while helping to

spare the healthy bone and

ligaments surrounding it.

The MAKO technology

provides surgeons with a

patient-specific 3-D model to

pre-plan PKR. During surgery,

surgeons guide the MAKO

robotic-arm based on

patient-specific plans. This

allows the surgeon to remove

only the diseased bone, preserving healthy bone and soft

tissue, and assists your surgeon in positioning the implant

based on anatomy.

Source: https://patients.stryker.com/knee-replacement/procedures/mako-robotic-arm-assisted

OMNIBotics® is an innovative, computer-controlled,

robotic-assisted total knee replacement technology

designed to relieve the pain caused by joint degeneration

due to osteoarthritis. During an OMNIBotics® procedure,

the surgeon is able to plan and

execute a surgical procedure

that is truly specific to a

patient’s condition and anatomy.

This unique procedure helps

enable surgeons to plan implant

fit and alignment before any

bone resections are performed,

ensuring the desired outcome.

OMNIBotics® procedures use

a patented OMNIBotics Bone

Morphing™ technology that

quickly builds and displays a 3-D

model of a patient’s anatomy in

real-time during surgery. Using

this 3-D imagery, surgeons can safely and accurately plan

and implement successful surgical procedures.

Source: http://www.omnils.com/patients/OMNIBotic_surgery.cfm

Illustration 1 – STRYKER-MAKO Illustration 2 – OMNIBotics®

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Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation

that addresses the global challenges and related growth opportunities that will make or break today’s market participants.

For more than 50 years, we have been developing growth strategies for the Global 1000, emerging businesses, the public

sector and the investment community. Is your organization prepared for the next profound wave of industry convergence,

disruptive technologies, increasing competitive intensity, Mega Trends, breakthrough best practices, changing customer

dynamics and emerging economies?

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