Medtronic shuts division aimed at offering lower-cost orthopedic knee replacement implants, manufactured by Responsive Orthopedics, a startup it acquired in 2016 that had aimed to disrupt the market with lower-cost artificial joints and a bundled payment model.
Minneapolis-based Responsive, described by Medtronic as a project being worked on by a small team, will be shut down following changes in a federal pay-for-performance program aimed at lowering the costs of hip and knee surgery.
“In February 2019, Medtronic announced that it was withdrawing from the orthopedic implant market. This decision was made in response to shifting market dynamics and to focus the business for future growth,” the statement said. “The Responsive Orthopedic knee system remains a high-quality, effective implant that has performed well for the patients who received it. Medtronic is focused on superior product quality, and our orthopedic implants are no exception.”
Although Responsive Orthopedics designed both hip- and knee-replacement systems, Medtronic only sold the knee systems. The hip implant is not cleared by the Food and Drug Administration.
Medicare’s Comprehensive Care for Joint Replacement payment model was first implemented in April 2016 by tying payments and penalties to 90-day patient recovery rates and was made mandatory for 1,800 hospitals spanning 67 population centers and a quarter of the country’s Medicare population. The agency estimated the program would save the government $343 million over five years.