Ambulatory surgery centers, robotics seen as trends for orthopedic devices in 2023
LL28
After seeing a downturn over the last few years due to COVID-19, the orthopedics devices market is set to return to pre-pandemic levels this year.
The market is expected to reach ~$50B in 2023, according to analytics firm GlobalData.
COVID-19 as well as health insurer reimbursement policies are moving more orthopedics surgeries out of hospitals and into outpatient settings, such as ambulatory surgical centers (ASCs).
This could benefit companies such as HCA Healthcare (NYSE:HCA), Community Health Systems (CYH), Universal Health Services (UHS), and Tenet Healthcare (THC) which all operate ambulatory care facilities.
Tina Deng, principal medical devices analyst at GlobalData, said that more orthopedics surgeries -- in particular total joint replacements -- are happening in outpatient or ASCs to keep more hospital beds open. She added that the Centers for Medicare & Medicaid Services is requiring that fewer procedures be done on an inpatient basis.
Because ASCs are smaller facilities compared to hospitals with smaller operating spaces, orthopedic devices are being developed with this in mind, as well as remote-control capabilities.
Deng noted that Stryker (NYSE:SYK) is a leader in this area as it launched an ASC-specific business back in 2020.
DePuy Synthes, the orthopedics division of Johnson & Johnson (NYSE:JNJ), is another company to keep an eye on given their long expertise in the area and their experience working with ASCs.
The GlobalData report also highlighted robot-assisted surgeries as growing this year. They are used in surgeries including partial knee replacement, total knee replacement, and total hip replacement, providing more consistent and accurate results.
Deng said that while the general surgery robotics market is largely dominated by Intuitive Surgical (ISRG), manufacturer of the da Vinci surgical system, major orthopedics makers are vying for a slice of the robotics market.
Companies in this space include Zimmer Biomet Holdings (ZBH), Medtronic (NYSE:MDT), and Smith & Nephew (SNN).
In its Q3 2022 earnings call in November 2022, Zimmer Biomet (ZBH) said that 30% of its robotics are going into ASCs. The company added that ~60% of reconstructive procedures could be done in ASCs by 2028.
GlobalData projects that the orthopedic robotic surgical systems market will be $984M worldwide in 2023 with annual growth of 25.6%.
Artificial intelligence and machine learning are also expected to improve outcomes provided by orthopedic robots. In July 2022, Zimmer Biomet (ZBH) announced a partnership with New York's Hospital for Special Surgery to develop a center for innovation in AI in robotic joint replacement.