J&J Announces Collaborations For Spinal Implant, Bundled Payments

Johnson & Johnson's orthopedics subsidiary, DePuy Synthes, has announced two separate deals: One for the development of a minimally-invasive implant for the treatment of degenerative disc disease, and another for the design, development, and implementation of bundled payment programs for hip and knee replacement procedures.

DePuy's agreement with Israeli medtech company Rainbow Medical calls for joint and simultaneous development work in Israel and the U.S., and will include pre-clinical trials and laboratory tests in medical centers and universities. The minimally-invasive implant is described as "a novel therapy for treating spinal degenerative disc disease," which is caused by gradual deterioration through wear and tear of the gelatin-like discs between vertebrae of the spine. Current treatment involves complex surgical procedures and pain management, but the new device could curb disease progression.

“Our product has the potential to provide the answer to a debilitating condition that hampers the daily functioning of millions around the world,” said Rainbow Medical co-founder Yossi Gross, a serial entrepreneur and medical device developer, in a statement. “Moreover, our revolutionary approach will attempt not only to alleviate the pain but also to stop the degenerative progression, radically transforming the way the disease is treated.”

Separately, DePuy signed an exclusive accord with Value Stream Partners (VSP) to design, develop, and implement a bundled payment programs for hip and knee replacements, in compliance with the Comprehensive Care for Joint Replacement (CJR) Model of the Centers for Medicare & Medicaid Services (CMS).

“This exclusive arrangement with VSP will further enable us to help providers, healthcare systems, and governments face new challenges in healthcare delivery and achieve the Triple Aim of improving clinical outcomes, increasing patient satisfaction and lowering overall costs,” said Juan-José Gonzalez, president, DePuy Synthes, U.S., in a statement. “We’re focused on innovation and offering total solutions that go beyond the implant and make a real difference both inside and outside of the operating room.”

Under the CJR (to be implemented April 1), acute care hospitals in 67 areas in the U.S. will be held financially accountable for the quality and cost of a single episode of care, which begins with hospital admission, covers the actual procedure, and ends 90 days after hospital discharge. The model incentivizes increased coordination of care among hospitals, physicians, and post-acute care providers, in contrast to separate payments for the procedure and the patient recovery phase.

“VSP has a solid track record in designing, implementing and administering bundled payment programs with the necessary collaborative, alignment and balanced incentive strategies to be successful,” added Gonzalez. "We look forward to working with VSP to help provide our customers with tools to effectively address the new requirements under the bundled payment model and provide the best care possible for patients.”

According to the U.S. Department of Health and Human Services (HHS), hip and knee replacements are the most common inpatient surgeries for Medicare beneficiaries, and are associated with lengthy recovery and rehabilitation periods, as well as high and costly re-admission rates. In 2014, there were more than 400,000 hip and knee replacement procedures performed, with a cost of more than $7 billion for the hospitalizations alone.