Doug Kohrs does it again! Medtronic acquires his low-cost hip and knee startup
I am a big fan of Doug Kohrs. Doug Kohrs is an Orthopedic/Spine startup giant. And Doug did it again! Let’s rewind the tape – He sold SpineTech to Sulzer for 10X sales (I was there) that was the tipping point for the spine bubble, then he built up the urology company, American Medical Systems, and took it public, then he grew Tornier and sold it to Wright, now he self-funded Responsive Orthopedics and sold it to Medtronic. —Tiger
Background story on Responsive Orthopedics (Star Tribune)
Medtronic snaps up Minnesota company to tackle knees and hips (Minn/St Paul Business Journal)
Medtronic isn’t disclosing terms of its deal to buy Responsive Orthopedics. The acquisition closed in May, a company spokeswoman said.
Medtronic plans to use Responsive’s products to launch a joint-replacement service it detailed during an investor day Monday. Kohrs, formerly CEO of Tornier, launched Responsive Orthopedics to develop low-cost knee and hip implants with a focus on bundled-payment programs, according to a Star Tribune profile. Those programs include not just a surgery itself, but all the services from the time a patient walks into the hospital to 90 days after the procedure is over.
Kohrs and other executives will serve as consultants to Medtronic’s orthopedic implant program.
Medtronic (NYSE: MDT) plans to help hospitals manage bundled-payment programs, providing them with devices and using analytics to track costs and how well patients fare after surgery. If Medtronic reduces costs, it will get a share of the amount saved.
The idea comes as Medicare is making a major bundled-payment push with its comprehensive care for joint replacement program. CJR rewards hospitals that meet its cost and quality goals — and penalizes those who don’t.
The program is part of Medtronic’s broader hospital-services push, which includes managing cath labs. That service has commitments for $2 billion in contracts already, Medtronic said during its investor day.
Even after its mega-deal to buy Covidien, Medtronic didn’t have a foothold in the joint-replacement market, which is dominated by major players like Zimmer Biomet Holdings Inc. While Responsive Orthopedics’ devices don’t come in “47 sizes and different colors,” they should meet surgeons’ needs, said Geoff Martha, Medtronic executive vice president and president of the company’s restorative therapies group during the investor day.
Martha said the program isn’t a “Trojan horse” for selling devices to hospitals. “This offering stands on its own,” he said.
As Medtronic developed the program, it teamed up with physicians who have experience leading successful bundled-payment efforts.
Responsive’s knee product is approved for sale, but regulators have yet to clear the hip version. Medtronic said it wasn’t prepared to offer financial projections for the joint-replacement service, which it expects to launch next year.
Dublin-based Medtronic’s operational headquarters are in Fridley.