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After seeing a downturn in recent years due to COVID-19, the orthopedic device market is poised to return to pre-pandemic levels this year.
The market is expected to reach ~$50 billion by 2023, according to analytics firm GlobalData.
COVID-19, as well as health insurer reimbursement policies, are shifting more orthopedic surgeries out of hospitals to outpatient settings, such as ambulatory surgical centers (ASCs).
This could benefit companies like HCA Healthcare (New York Stock Exchange: HCA), Community Health Systems (CYH), Universal Health Services (UHS), and Tenet Healthcare (THC), which operate outpatient care centers.
Tina Deng, principal analyst for medical devices at GlobalData, said more orthopedic surgeries, particularly total joint replacements, are being done on outpatient or ASC basis to keep more hospital beds open. She added that the Centers for Medicare & Medicaid Services are calling for fewer procedures to be performed on hospitalized patients.
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 (New York Stock Exchange:SYK) is a leader in this area as it launched a ASC specific business back in 2020.
DePuy Synthes, the orthopedics division of Johnson & Johnson (New York Stock Exchange: JNJ), is another company to consider given its long experience in the area and its experience working with ASC.
The GlobalData report also highlighted that robotic-assisted surgeries are growing this year. They are used in surgeries including partial knee replacement, total knee replacement, and total hip replacement, providing more consistent and precise results.
Deng said that while the general surgery robotics market is largely dominated by Intuitive Surgical (ISRG), maker of the da Vinci surgical system, major orthopedic manufacturers are competing for a slice of the robotics market.
Companies in this space include Zimmer Biomet Holdings (ZBH), Medtronic (New York Stock Exchange:MDT) and Smith & Nephew (SNN).
In its Q3 2022 earnings call in November 2022, Zimmer Biomet (ZBH) said that 30% of its robotics will go to ASC. The company added that ~60% of reconstructive procedures could be performed at ASC by 2028.
GlobalData Projects that the orthopedic robotic surgical systems market will be $984 million worldwide by 2023 with an annual growth of 25.6%.
Artificial intelligence and machine learning are also expected to improve the results provided by orthopedic robots. In July 2022, Zimmer Biomet (ZBH) announced a partnership with the Hospital for Special Surgery of New York to develop a center for innovation in AI in robotic joint replacement.
