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Medtronic Launches its Orthopedic Solutions Initiative BY ANDREW VAHRADIAN, NOVEMBER 14, 2016

Medtronic launched its Medtronic Orthopedic Solutions initiative, a comprehensive offering that seeks to improve patient outcomes and reduce costs for hospitals/patients across an entire episode of care of total joint replacement procedures.

The company has developed this new offering in order to specifically address the Centers for Medicare & Medicaid Services' (CMS') Comprehensive Care for Joint Replacement (CJR) model, a bundled payment initiative that holds 800 hospitals in 67 metropolitan statistical areas (MSAs) accountable for the quality of care they deliver to Medicare fee-for-service beneficiaries for hip and knee replacements.

CMS finalized CJR at the end of last year, and the measure aims to improve patient care by rewarding hospitals with additional payments if the quality of the services they have provided is strong, and if the spending performance over the entire episode of care is kept low relative to its peers. If a hospital does not perform well in regards to CJR's quality and cost metrics, then the hospital potentially will have to repay Medicare for a portion of the spending for care.

CMS targeted hip and knee replacement procedures as they are the most commonly performed inpatient procedures for Medicare patients, often entail lengthy recoveries, and display a significant variance in complication rates and overall costs across hospitals and geographies.

In 2014 alone, Medicare paid approximately $7 billion for more than 400,000 hip and knee procedures. The organization pays roughly $13,000 for a standard hip or knee replacement procedure. On average, hip and knee implants cost $4,300, or up to 40% of the total procedure costs. Therefore, an area that holds great promise for hospitals to lower their cost metrics is the implant itself.

CJR represents an entirely new approach to healthcare with bundled payments rewarding the hospitals with the best patient outcomes, which fundamentally encourages hospitals, physicians, and post-acute care providers to work together to improve the quality and coordination of services. This will enhance overall patient care from the initial hospitalization through recovery.

To help healthcare providers succeed in a CJR environment, Medtronic's Orthopedic Solutions is an consultative program that will assist providers in streamlining and reducing their costs for the delivery of care, while evaluating patient satisfaction and outcomes, from the pre-surgical planning period through the 90th day post-discharge stage. The platform has been designed to help deliver solutions that are tailored to the client's distinct needs throughout the care continuum.

These solutions consist of:
1) Care Pathways
A patient-focused program that provides technology to monitor success and course-correct as needed in order to locate cost reduction opportunities and improve patient satisfaction and outcomes.

2) Patient Monitoring with Medtronic Care Management Services (MCMS)
A remote patient monitoring and engagement solutions program designed to help clinicians manage readmission risk and improve patient satisfaction from total hip and total knee arthroscopy by assisting patients' home recovery process, delivering actionable information to providers to help enable timely and effective clinical interventions, and provide patient context and education important for self-care.

3) Total Knee Arthroplasty System
In June, 2016, Medtronic acquired Responsive Orthopedics, a company that had been focused on developing a platform of low-cost/discounted primary hip and knee implant systems. The company's implants have fewer size options (less than 10) than other competitive hip and knee systems, however, the company maintains that this implant line will be of similar quality and cost 40% less.

4) Bleeding Control with the Aquamantys System
This Medtronic technology combines radiofrequency (RF) energy and saline to provide hemostatic sealing of soft tissue and bone. For total knee arthroplasty, the company's Aquamantys solution has been utilized to reduce blood loss, transfusion rates, and drain output, and to maintain hematocrit levels in order to decrease the patient's length of stay and increase the number of patients discharged to home self-care.

The Medtronic Orthopedics Solutions services will be offered as a performance-based partnership between the customer and Medtronic, meaning, Medtronic is only compensated if the program achieves successful outcomes and cost savings for the customer.

The company intends to report the results from its Medtronic Orthopedic Solutions business as part of its Spine division within the Restorative Therapies Group.

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