Analysis

Exponential technologies and total hip replacement

Using exponential technologies to improve patient outcomes, drive economic benefits, and create growth opportunities

The future of total hip replacement will likely be very different than today. “Push” factors such as aging populations in the developed world that are increasing demand, shrinking health care budgets, longer life expectancies, and higher patient expectations, when combined with “pull” factors such as the advent of new exponential technologies, promise to change the experience for patients, physicians, providers and medical device manufacturers. As with any major disruption to the status quo, we believe the winners will be the ones who are faster to adopt to the new normal.

Total hip arthroplasty: Effective but costly

Every year, physicians in the United States perform more than 311,000 total hip replacements in patients aged 45 years and older.1 With a 95 percent success rate,2 total hip arthroplasty (THA) has improved quality of life for millions of people and provided a growing base of business for providers, payors, and medtech companies. Still, THAs can be costly: From 1998 to 2011, total hip implant prices increased nearly 300 percent.3

The convergence of exponential technologies–3D printing, embedded sensors, "smart" materials, and others–with a redesigned THA care delivery model targeted toward improved outcomes, economics, and population management, may drive beneficial changes during each stage of the patient journey. Potential improvements include earlier and more effective diagnosis, decreased pre-operative and procedure times, lowered post-operative infection rates and treatment costs, and reduced recidivism.​

Improving THA economics and value

Using exponential technologies has the potential to enhance THA economics at the patient, health care stakeholder, and population health levels.

  • For individual patients, exponential technologies may shorten the pre-, peri-, and post-surgical journey and help their care team more easily design and make the best hip implant.
  • For industry stakeholders, the technologies may reduce the cost of care for payors, and increase revenue and improve margins for providers and implant manufacturers. It is also likely that more patients will be able to receive a THA at an earlier age or more severe disease state, resulting in a larger eligible patient population and increased market size.
  • At the population-health level, exponential technologies may improve clinical outcomes by enabling earlier detection of pre-operative disease states, facilitating more accurate surgical planning, providing a better understanding of patient-specific implant sizing, and detecting infection and/or implant rejection earlier.

Medtech company executives assessing business-building opportunities arising from THA's evolution should consider the potential impacts in their R&D, commercialization, and financial planning:

  • Medtech R&D organizations will likely require new capabilities–produced organically or acquired–as they expand traditional clinical, materials, and manufacturing process R&D into areas such as additive manufacturing, translating higher-resolution images to production-ready machine instructions, tooling, packing, kitting, etc.
  • Quality systems and processes will likely need to incorporate the addition of new technologies into the THA product lifecycle.
  • Sales and marketing functions will likely need to adapt traditional commercialization models to reflect the impact of exponential technologies on clinician training and patient education.​
  • New technologies and their application cannot happen without appropriate clinical research to validate efficacy, safety, and related considerations, as well as supportive policy and regulatory changes. Companies may want to increase their collaboration with regulators to help advance the new technologies and maintain compliance with changing regulations.

The bottom line: Using exponential technologies in THA creates revenue and market growth opportunities for medtech companies. However, when assessing future business models, executives should carefully consider how various technologies may impact their current and future-state operations and plan their steps forward accordingly.

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Get in touch

Chris Park
Principal
Deloitte Consulting LLP
chrpark@deloitte.com

Laura Paulsen
Senior Consultant
Deloitte Consulting LLP
lpaulsen@deloitte.com

1. Hospitalization for Total Hip Replacement among inpatients aged 45 and over: United States, 2000-2010. CDC. Feb 2015. https://www.cdc.gov/nchs/products/databriefs/db186.htm 
2. IPWatchdog: The Evolution of Hip Replacements: A Patent History. 21 April 2014. http://www.ipwatchdog.com/2014/04/21/the-evolution-of-hip-replacements/id=49209/ 
3. Hospitalization for Total Hip Replacement among inpatients aged 45 and over: United States, 2000-2010. CDC. Feb 2015. https://www.cdc.gov/nchs/products/databriefs/db186.htm
 

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