Press Release:
For immediate release
Tuesday, May 18, 2006
12:01 a.m. EDT

 

Contact:
Christopher Fleming
301-347-3944
cfleming@projecthope.org

Hip And Knee Replacements Are Less Expensive Than Ever, Says Former Biomet President

Miller Defends Industry-Physician Relationships, Says Liability Fears Create Wariness About A U.S. Joint Registry

Bethesda, MD -- The cost of orthopedic implants themselves might be going up, but the total costs of replacing a hip or a knee joint is going down, according to the former president and CEO of an implant manufacturer.

Dane Miller, who headed Biomet until March 26, makes this point in an interview published May 18 on the Health Affairs Web site, in response to a question from the Wharton School’s Rob Burns. Burns suggests that a “perfect storm” has been brewing over the past few years. “During this time, hospital reimbursement was relatively flat, hospital profitability on orthopedics dropped, surgeon reimbursement declined in real terms, but implant prices rose,” Burns points out.

“Just to give you a frame of reference, twenty-five years ago the average total hip or total knee procedure took up to two and a half hours in the OR. The average patient was in the hospital ten to seventeen days,” responds Miller, who still serves as a Biomet director and a consultant to the company. “Today, the average OR time for hip or knee replacement is about forty-five minutes, or probably less in the hands of many experienced surgeons.”

This sounds good for patients, for Biomet sales, and for surgeons and hospitals who can increase revenues through higher volume, Burns says. “The only down side is for the payer, who has to pay for the higher volume.” Indeed, he says, “the most recent data showed an enormous growth in Medicare spending on implant cases over the last few years.”

But Miller argues that Medicare should in fact be increasing reimbursements for orthopedic implants. “The CMS should be identifying those areas where the health care services are truly socially responsible, and I think that’s certainly the case in orthopedics,” he says. “We’re putting people back on their feet. We’re helping them return to functionality in society.”

Miller says that orthopedic implant manufacturers compete with each other “more in terms of technology, products, quality, and so forth; less so in the area of product cost.” Even so, he asserts, per unit price increases over the past decade have been limited to “somewhere along the lines of inflation.” He adds that “there have been some ‘mix shift’ price increases to new technologies, such as alternative bearing surfaces.”

Miller says that this mix shift “is very much driven by the patient’s age and expectations. As the average age of the patient declines with the anticipated need for longer-term performance of implants, we’ll see a continuing shift toward higher-technology products.” He defends industry sales representatives who encourage the use of higher-quality products: “If a joint procedure is scheduled, and the sales rep notices that it’s a fifty-five-year-old, very active patient who wants to go back and play tennis again for the next twenty years, is it inappropriate for that rep to say, ‘Hey, why don’t you consider a Magnum?’ ... If it was me lying on the table, I’d appreciate it if the rep would suggest that.”

Miller’s conversation with Burns is the fourth in a series of Health Affairs interviews with leaders in biomedical innovation. The series is funded by the Institute for Health Technology Studies (InHealth).

Other notable statements by Miller include the following:

-- Physician-Device Company Relationships: “Ultimately, any innovation in our field requires a relationship with a physician who will apply the new idea or technology in a clinical setting. I think the future of orthopedics -- in fact, the future of health care -- is based on those kinds of relationships. … I think that society is going to have to get beyond the general sense that economic relationships between any two parties are by definition fraudulent.”

-- Head-To-Head Comparisons Of Competing Implants: “I don’t know that a lot of it is taking place. The right way to do a scientifically valid clinical trial is double-blind, where you use two different products unknown to the patient, clinician, and OR staff. But unless you’re going to use blind surgeons to do the procedure, it’s a little difficult to do.”

-- Sweden’s National Joint Registry That Tracks Device Success Rates: “I think that it works reasonably well, with some exceptions. … There has been talk at the American Academy of Orthopedic Surgeons of putting together a joint registry for both hip and knee. I think that most vendors probably would be hesitant because of the legal implications of a registry. Are you doing more than providing the legal system with a road map for class-action litigation?”

-- Direct-To-Consumer Advertising: Asked by Burns whether DTC advertising is designed to prompt patients to demand certain brands “to mitigate whatever influence the hospital might have over the surgeon in terms of switching vendors,” Miller calls this notion “a bit overreaching, to be honest with you. I don’t think patients are going to have a significant impact on the decision making of the orthopedic surgeon, and certainly the hospital’s one step beyond.”

-- Minimally Invasive Surgery: “There is some push-back because people are asking the question: If you can get 90 percent of your patients out of the hospital quicker, and they recover quicker, but you’ve got a 10 percent higher complication rate, was it really a benefit?”

You can find the interview at http://content.healthaffairs.org/cgi/content/abstract/hlthaff.25.w241

Health Affairs, published by Project HOPE, is the leading journal of health policy. The peer-reviewed journal appears bimonthly in print with additional online-only papers published weekly as Health Affairs Web Exclusives at www.healthaffairs.org.

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©2006 Project HOPE–The People-to-People Health Foundation, Inc.