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Through the first three months of 2023, the orthopedic market enjoyed significant year-over-year growth due to improving procedure volumes, attenuating headwinds and weaker prior-year comparisons. Commentary from executives at public orthopedic companies addressed improving market conditions, remaining market uncertainty and developments in the enabling technology segment.
Market Conditions
Orthopedic surgical volumes, especially in joint replacement, have improved since last year. However, there seems to be no significant backlog consumption driving these improvements in the U.S. Staffing levels remain a concern for companies in 2023, while there are some early indications of behavior changes from patients in the post-pandemic era.
Matt Trerotola, Enovis CEO
What you saw in Q1 in the U.S. is normal, healthy levels. It’s no staffing pressure, plenty of demand, and no COVID pressure. Maybe even a little better than normal and then a soft comp because of the pressure on last year. Outside the U.S., in addition to a little bit easier comp, there are some countries where they’re on overdrive, and they’re working off significant backlogs of surgery; countries like Germany are working on significant backlog of surgeries and running higher than normal levels.
Curt Hartman, CONMED CEO
Better markets, better performance. The markets are better, the procedure volumes better and the staffing levels continue to improve incrementally. They’re not back where they were pre-COVID. In fact, I attended some dinners not too distant past where surgeons commented that they had not yet seen improvements in their staffing levels. So, it’s still not by any stretch back to what it was pre-COVID.
Bryan Hanson, Zimmer Biomet CEO
We’re also looking into potential patient behavior changes we’re seeing through COVID. The first one is that technology advancements are giving people confidence that the outcome of the procedure is going to be good. The second is that you’re getting out of the hospital or the ASC faster. The final thing is you’ve got flex work right now. So people feel more comfortable, more confident rehabbing and also staying in work. So we think those three things have the opportunity to continue to elevate the recon market.
Enabling Technology
Stryker said the shift to robotic rentals isn’t a roadblock for its continued domination in orthopedic robotic-assisted surgery, while ATEC believes that spinal robotics need to evolve beyond screw placement. According to Paragon 28, the foot and ankle market desperately needs the kind of value some enabling technologies provide.
Glenn Boehnlein, Stryker CFO
Rentals have been part of our plan. As we look at how we’re attacking the market, we focus on placements. We’re more than willing to spread out this purchase price over any period of time that they’re interested in. Oftentimes these rentals convert within a year or two to a purchase. We are very happy to do rentals. Honestly, we just want to increase the Mako footprint.
Todd Koning, ATEC CFO
I think the opportunity is to integrate [Remi] into the full procedural approach. To date, robotics and navigation have largely been about pedicle screw replacement, which certainly has some value. Still, we think the real value is being able to innovate it into a procedural approach to mitigate variables of surgery.
Albert DaCosta, Paragon 28 CEO
On a long-term basis, we have made no secret that we think enabling technology is giving us better visibility in the planning phases of surgery, in the diagnosing phases of surgery, and even predicting the outcome phase that we expect to contribute in a meaningful way to improve the outcomes for patients. We think the foot and ankle market desperately needs that. We still have higher complication rates, and Paragon 28 has always been on a mission to improve those outcomes. We think this is one of the most significant opportunities to do that.
Companies Remain Cautious
Companies remained prudent with guidance changes despite the solid first-quarter growth. Similar “rebound” quarters have created a false sense of security multiple times since the beginning of the pandemic and its follow-on disruption.
Anshul Maheshwari, SI-BONE CFO
We feel good coming out of the first quarter that some of those tailwinds are playing out better than what we expected in our original guidance. We are in the early stages of what we think is a prolonged recovery, but we think it’s best to be thoughtful right now. And thus, in our guidance, the increases are pretty much the beat that we’ve had in Q1, and we are not making any changes to our risk-adjusted assumptions for the rest of the year, even though we’ve seen them play out a little bit. So there’s a fair bit of conservatism in there, but we think that’s appropriate given how early we are still in the year.
David Bailey, OrthoPediatrics CEO
Our guide still anticipates that we will have staffing challenges throughout the year. Until we see structural change that’s sustainable, we want to remain pretty conservative with respect to what we see, particularly as we enter into a second quarter, where we have a pretty tough comp. We left Q2 last year thinking everything was completely normal, and obviously, it wasn’t in the back half of the year with RSV and staffing.
Stephen Deitsch, Paragon 28 CFO
We’re hitting on all cylinders. When we looked at our guidance for the full year, we decided to reaffirm simply due to the fact that we are in continued macroeconomic uncertainty. And you used the word conservatism. I would say just we’re being prudent when we look at the uncertainties in the macroeconomic environment we’re operating in.
Through the first three months of 2023, the orthopedic market enjoyed significant year-over-year growth due to improving procedure volumes, attenuating headwinds and weaker prior-year comparisons. Commentary from executives at public orthopedic companies addressed improving market conditions, remaining market uncertainty and developments in the...
Through the first three months of 2023, the orthopedic market enjoyed significant year-over-year growth due to improving procedure volumes, attenuating headwinds and weaker prior-year comparisons. Commentary from executives at public orthopedic companies addressed improving market conditions, remaining market uncertainty and developments in the enabling technology segment.
Market Conditions
Orthopedic surgical volumes, especially in joint replacement, have improved since last year. However, there seems to be no significant backlog consumption driving these improvements in the U.S. Staffing levels remain a concern for companies in 2023, while there are some early indications of behavior changes from patients in the post-pandemic era.
Matt Trerotola, Enovis CEO
What you saw in Q1 in the U.S. is normal, healthy levels. It’s no staffing pressure, plenty of demand, and no COVID pressure. Maybe even a little better than normal and then a soft comp because of the pressure on last year. Outside the U.S., in addition to a little bit easier comp, there are some countries where they’re on overdrive, and they’re working off significant backlogs of surgery; countries like Germany are working on significant backlog of surgeries and running higher than normal levels.
Curt Hartman, CONMED CEO
Better markets, better performance. The markets are better, the procedure volumes better and the staffing levels continue to improve incrementally. They’re not back where they were pre-COVID. In fact, I attended some dinners not too distant past where surgeons commented that they had not yet seen improvements in their staffing levels. So, it’s still not by any stretch back to what it was pre-COVID.
Bryan Hanson, Zimmer Biomet CEO
We’re also looking into potential patient behavior changes we’re seeing through COVID. The first one is that technology advancements are giving people confidence that the outcome of the procedure is going to be good. The second is that you’re getting out of the hospital or the ASC faster. The final thing is you’ve got flex work right now. So people feel more comfortable, more confident rehabbing and also staying in work. So we think those three things have the opportunity to continue to elevate the recon market.
Enabling Technology
Stryker said the shift to robotic rentals isn’t a roadblock for its continued domination in orthopedic robotic-assisted surgery, while ATEC believes that spinal robotics need to evolve beyond screw placement. According to Paragon 28, the foot and ankle market desperately needs the kind of value some enabling technologies provide.
Glenn Boehnlein, Stryker CFO
Rentals have been part of our plan. As we look at how we’re attacking the market, we focus on placements. We’re more than willing to spread out this purchase price over any period of time that they’re interested in. Oftentimes these rentals convert within a year or two to a purchase. We are very happy to do rentals. Honestly, we just want to increase the Mako footprint.
Todd Koning, ATEC CFO
I think the opportunity is to integrate [Remi] into the full procedural approach. To date, robotics and navigation have largely been about pedicle screw replacement, which certainly has some value. Still, we think the real value is being able to innovate it into a procedural approach to mitigate variables of surgery.
Albert DaCosta, Paragon 28 CEO
On a long-term basis, we have made no secret that we think enabling technology is giving us better visibility in the planning phases of surgery, in the diagnosing phases of surgery, and even predicting the outcome phase that we expect to contribute in a meaningful way to improve the outcomes for patients. We think the foot and ankle market desperately needs that. We still have higher complication rates, and Paragon 28 has always been on a mission to improve those outcomes. We think this is one of the most significant opportunities to do that.
Companies Remain Cautious
Companies remained prudent with guidance changes despite the solid first-quarter growth. Similar “rebound” quarters have created a false sense of security multiple times since the beginning of the pandemic and its follow-on disruption.
Anshul Maheshwari, SI-BONE CFO
We feel good coming out of the first quarter that some of those tailwinds are playing out better than what we expected in our original guidance. We are in the early stages of what we think is a prolonged recovery, but we think it’s best to be thoughtful right now. And thus, in our guidance, the increases are pretty much the beat that we’ve had in Q1, and we are not making any changes to our risk-adjusted assumptions for the rest of the year, even though we’ve seen them play out a little bit. So there’s a fair bit of conservatism in there, but we think that’s appropriate given how early we are still in the year.
David Bailey, OrthoPediatrics CEO
Our guide still anticipates that we will have staffing challenges throughout the year. Until we see structural change that’s sustainable, we want to remain pretty conservative with respect to what we see, particularly as we enter into a second quarter, where we have a pretty tough comp. We left Q2 last year thinking everything was completely normal, and obviously, it wasn’t in the back half of the year with RSV and staffing.
Stephen Deitsch, Paragon 28 CFO
We’re hitting on all cylinders. When we looked at our guidance for the full year, we decided to reaffirm simply due to the fact that we are in continued macroeconomic uncertainty. And you used the word conservatism. I would say just we’re being prudent when we look at the uncertainties in the macroeconomic environment we’re operating in.
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Mike Evers is a Senior Market Analyst and writer with over 15 years of experience in the medical industry, spanning cardiac rhythm management, ER coding and billing, and orthopedics. He joined ORTHOWORLD in 2018, where he provides market analysis and editorial coverage.
