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Orthopaedic Reconstruction

Contents

About This Report

HSE Performance

Social Performance

Economic Performance

Looking Ahead

From the time of publishing the 2007 Sustainability Report (SR) several initiatives are being pursued and a few have been abandoned. The general trends from 2007 have progressed unabated into 2008. Each will be discussed with recommendations going forward.

Initiatives

The BHR economic model has been completed. The outputs discussed in the 2007 (SR). The model has been introduced and its messaging evaluated in several health care sectors. It has been determined that the peer reviewed article describing the model and its output will be submitted to the “American Journal of Managed Care”. This publication is important because of its readership. All managed care medical directors and most benefits managers from large employers who are self-insured read AJMC. Among several reasons for targeting AJMC is the ability to influence practice patterns, particularly in integrated health systems that employ physicians. The peer reviewed article was completed during May 2008. Smith & Nephew, Inc. had an inside track to the editorial panel of AJMC. It is hopeful that the article will be published by Q4, 2008.
The initiative to gather information for the purpose of reducing medical malpractice for surgeons who utilize CAS has been abandoned. The cost of gathering and analyzing the information, obtaining buy-in from a majority of malpractice carriers, and the value to CAS sales pull-through were reasons for abandonment.
The U. S. Health Care Incentive Alignment Model is complete and still being evaluated by several academics. Optimization of the relative scoring remains unresolved. The model has gained acceptance but remains a work in progress until hypothesis testing can be documented.

Trends and planned work

The trend toward capitated pricing and reduction of number of vendors is extremely strong in hospitals. We are finalizing a white paper which will be co-written by an as yet unnamed physician and William Cleverly. Dr. Cleverly is a C.P.A., Ph.D. and widely recognized as highly credible source of health care finance. Dr. Cleverly teaches at Ohio State University. Dr. Cleverly and Smith & Nephew personnel co-authored a white paper in 2001. The theme of the paper will be to highlight the basic economic flaws in considering capitated pricing a good idea against the reality of prospective reimbursement. The white paper will be completed during May 2008. We will have the opportunity to test the message with the supply chain manager at Cleveland Clinic in late May or early June, 2008.
We continue to search for a resource to host an open source analysis of insurance risk pooling, beneficiary churn cost, and asymmetric information cost in the U. S. health care system. The enormity and complexity of the topic requires careful construction and implementation.

Additional trends and planned work not part of the 2007 report

The trend of integrated health systems buying physician practices in order to control physician preference and practice patterns, etc., is escalating.
We plan to stay close to the ongoing process of clinical data transferability; if a protocol for data transferability can be developed it will represent a tremendous economy of scale for our future needs. Many jurisdictions now require data specific to their own population to inform decision analysis. The decision analytics will determine whether or not to purchase product and if so at what price. This initiative is more prevalent in jurisdictions outside the US.
Health economics and reimbursement requirements for biotechnology and combination device products will require exponentially more effort in terms of pre-launch safety, efficacy, and efficiency, as well as post launch surveillance.

Vision

The Director of Strategic Reimbursement has membership in the International Society of Pharmaceutical Outcomes Research (ISPOR), and American Society of Health Economists (ASHE). Both organizations should provide a wealth of high quality collaboration for the health economic messages coming from Smith & Nephew.

Setting the standard for the quality of health economics and reimbursement information does not necessarily require large expenditures. It does require a thorough understanding of the topography of both disciplines and constant observation.

Healthcare Economics