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President, Orthopedics, Smith & Nephew

Picture in your mind’s eye an implantable knee device that has been tested for 45 million “cycles” – a global standard measure in the industry – with technology so effective that, not only is it FDA approved to last 30 years, but with normal use it will also show no wear.  (See related story below.)

Is this the type of knee device you would consider if the time comes for a knee replacement? This may be one of many life changing decisions some of us will face as we age. In an attempt to regain mobility and maintain an active lifestyle, some of us will “go for it.” The technology has become so advanced that, in addition to the over 65 group, younger men and women, including athletes with joint injuries, are opting for the knee replacement at an earlier age.

Smith & Nephew’s Patient landing site on the 30 year knee: www.rediscoveryourgo.com.

It was unimaginable a few short years ago but a viable option now because of the advanced technologies available. Enter the VERILAST™ knee - just one of Smith & Nephew’s innovative devices in the competitive orthopedics world market today.
Joseph DeVivo is president of orthopedics at Smith & Nephew, a 150 year old company with its beginnings in Hull, England. DeVivo has been with Smith & Nephew three and a half years and is making a significant impact on the company’s orthopedics division.

His excitement about two of Smith & Nephew’s newest innovations is palpable. A recent visit to his office included a hands-on look at a few of the latest technologies and testing, including a look at the VERILAST knee device and the cycle tester which has a 24 hour camera connected to the company’s intranet in “real” time which passed 64 million cycles last week. The cycle tester is a global, standard FDA approved protocol for knee devices developed in the U.K. Forty-five million cycles are the equivalent to 30 years of wear on a knee implant device. Only an advanced knee device with FDA approval can make a claim that it will last that long under normal conditions.


Smith & Nephew (S & N) has been in Memphis for over 75 years. With annual revenues of $3.8 billion (2009), the company has a global market that includes 32 countries, employs more than 10,000 worldwide, 2,005 of whom work in the Memphis orthopedics division. The three main drivers of their market are the worldwide aging population, the trend toward minimally invasive surgery and informed patients who demand the most effective treatments.


Born in New England in the picturesque, historic town of Wilton, Connecticut, DeVivo was an only child. He grew up in Wilton and left to attend the University of Richmond where he graduated with a bachelor’s in business administration. Following his college years, he worked in a family business for 10 years, was hired by United States Surgical (USS), a division of Tyco Healthcare, where he served in many roles including senior director of global marketing and director of product development in the DG Sutures Division.

This was followed by his tenure as CEO of a medical robotics company, Computer Motion, Inc. Most recently before coming to Smith & Nephew, he was president and CEO of RITA Medical Systems, Inc. When asked about the transition to Memphis from the northeast and California, he was enthusiastic. “I love Memphis!” he said. “I also have a house in Richfield, Connecticut so I go back and forth (to visit family).”

What specific challenges do you face as president of the orthopedics division?
It is a changing healthcare environment for everyone. Understanding how to change for the future in a positive manner is the greatest challenge – also, how to find those opportunities, especially in orthopedics. The way we (providers) charge is the challenge of the future – and to understand the customers’ needs and to meet them. Our primary customers are the physicians in hospitals – they make the ‘buy’ decisions.

What changes have you made to the orthopedics division since you came on board in 2007?
We are changing our philosophy to mirror the new healthcare market, specifically taking the costs out of healthcare: the challenge of balancing quality with the ability to reduce costs. Often, there is an inverse relationship between the two. We have to refocus on enhancing patient outcomes – and take the inefficiencies out, make it less expensive for the hospitals, and also make it easier on the surgeons. …Historically, cost wasn’t the central focus. The question now is how do you innovate and reduce cost? This determines our research and development and investment decisions. If a new technology does not significantly enable us to reduce cost, it is not something in our pipeline.

What strategies does Smith & Nephew have in place to stay competitive in today’s orthopedics market?
I’ll give you an example of a new technology that is central to this strategy – it’s called VISIONAIRE™. In a standard knee operation, a surgeon might use up to 100 different instruments for one surgical procedure. This puts a burden on surgeons and the hospital (with respect to) inventory, space, instruments, reprocessing, labor and re-sterilization. Also, if you are making decisions while the patient is “in theatre” the operation is longer. With VISIONAIRE, the patient gets an MRI of the knee, the scan comes to S& N and our engineers look at specific physical dynamics of that patient.

The procedure is virtually done by the surgeon and the engineer. There are probably 8-9 different variables the surgeon has to approve before the procedure is done. Once he examines all those variables, the scan goes back to the engineer who places the block on the knee on imagery, which shows different views and sends it back to the surgeon. When the surgeon says “good,” he writes a prescription for the device. We hit “print” and the 3D disposable part comes out of the machine with the patient’s name on it.

We have taken about 20 steps out of the operation and anywhere between 20-40 minutes in time savings. It reduces about 30 minutes of tourniquet time for the patient. So, it requires less anesthesia for the patient, reduces the steps and complexity of the operation, it ensures perfect alignment, is a faster and less complicated operation, and there is less blood loss and less risk to the patient. The hospital has a profitable procedure and is well reimbursed. And now, the hospital has two trays to re-sterilize instead of nine. Sterilization averages $454 per procedure.

So, we are innovating and enhancing benefits to the patients but it is also benefiting everyone in the supply chain. This is a major change: the hospital bears the cost of the block, but they save on sterilization costs. We are reinventing our orthopedic model to use this knowledge and improve patient outcome and also take the cost out… Anywhere we can pre-predict the disease state the patient has, it’s almost like a layman’s flight simulator for the surgeon – the surgeon gets to see and assimilate the anatomy before he has to interpret live in the field.

This is not a new, different high-priced knee; it is just a faster, easier way to get the knee into the patient.

Is this technology available to other companies?
Other companies are going down this path. Two independent companies plus Smith & Nephew were working on this. We chose to develop the competency internally – not to export it. By learning how to read the MRI and communicating directly with the surgeon, it has enabled us to learn the technique and given us knowledge of how the implant affects the patients. Now that we understand the value of the MRI, we are now broadening our scope to include more types of patients and different procedures which would benefit from the overall philosophy of using the technology. It is almost turning into a mass customization on a high volume scale.

There is no guess work. Engineers look at core anatomical landmarks and alignments that are preset by surgeons. The surgeon reviews everything to be sure we have done what they want. There are always checks and balances. No surgeon depends 100 percent on technology. Surgeons are artists; they have the ability to ‘course correct.’ And that’s what makes a surgeon great.

Before, it was an accomplishment to give patients mobility. Now our key mission is to help patients recapture their right to an active lifestyle.

This success is moving the market to the younger patients. There are people now who are living more active lives. They had sports injuries when they were younger and old sports injuries start the clock on osteoarthritis. We’ve done so well in the 65 and older group, the market is now growing for…younger patients who have had every procedure imaginable and are having pain every day. If you don’t treat arthritis…everything gets out of alignment.

There are reasons why knees (implants) fail – bone density issues, infection, incorrect alignment, and wear. In thinking about my future, if I can cross one thing off the list – I can get rid of the knee wearing out.

We have accurate placement, better imaging, a better bearing surface, and are developing better kinematics which allows knees to bend better – there is more flexion. A much more aggressive knee…which allows the person to run or walk up and down stairs.

What is the substance made of that allows it to show no wear?
The key to it is OXINIUM™. A standard knee is made of cobalt chrome. We take zirconium…that is used in high performance vehicles, spacecraft, and the nuclear industry where you need to have a surface with such a property. We combine the zirconium with the cobalt chrome at a high level – the bonds merge. So there is a gradient of zirconium down to cobalt chrome. It is not a coating but is a complete chemical refiguring of the surface.

No matter how good surgery is, there will be cement and bone debris in the joint. The cobalt chrome…creates a groove with the debris. When the cobalt chrome is scratched, it becomes like a cheese grater on the plastic – and that’s the key (the cobalt chrome wears down the plastic). We use cross-linked polyethelene (XLPE) which is harder than polyethelene itself. We are the only company that uses OXINIUM. With the two advanced level surfaces that go against each other - it just goes off the charts.

What is the key to global growth and increased revenues in these economic times?
We are growing share but we are most certainly feeling pressure from the economy because everyone is going through challenges. We are aggressively growing in emerging markets three to four times faster. We are training 10,000 surgeons a year. For S & N, the key to global growth is local product. We design production for the local surgeons. We have manufacturing in Memphis, Europe, Switzerland and Beijing. We are a global company by being close to the customer. We are the fastest growing orthopedics company – targeting the younger segment, which is growing faster than the 65 and older population.

What innovations are on the horizon?
In trauma we have another exciting innovation. TRIGEN SURESHOT™ is just as exciting as the VERILAST knee. There are reasons why trauma surgeons should care about this. Tibial fractures are difficult to put back together. The amount of radiation a surgeon might receive from one procedure might be from 10-30 individual scans. With SURESHOT…he can literally do the procedure in one and a half minutes.
Not only have we taken archaic steps out of the procedure, saving time, the surgeon can avoid three hours of straight radiation in a year if he averages 200 nails a year. This is of tremendous value for trauma surgeons who are at higher risk of cancer because of cumulative radiation. Our campaign has a button for our docs that reads, “I matter too.” Also, reducing the need to have a $250,000 machine dedicated to this procedure is a huge savings.

What kind of impact will healthcare reform have on your business?
It’s going to hurt. A lot of the additional burden is going to fall on hospitals. They are going to go after the implant/device companies to get better pricing. If we take all the medical devices, drapes, sutures, etc. in healthcare and add them up, it makes up 5 percent of the cost.

The number one category of cost in healthcare is labor, which makes up 60 percent. Whenever you have an industry with that much labor cost, there is inefficiency. With the new healthcare reform law, medical device companies are going to pay a 2.3 percent tax on revenues (new excise tax) not profits. This can equal10-15 percent of our profit.

Every hospital in America is worried about their cost. So we’re getting squeezed on both sides – and we have to maintain our profitability. It may decrease innovation, education, and research – so we are really concerned. I don’t think you can address the cost without tort reform and I don’t believe the reform bill attacks or addresses the true costs or core issues of the overall cost of healthcare. Defensive behavior drives up the cost of healthcare. The average cost of healthcare for an American is about $7500 a year. In Europe it’s about $3500. We rank globally about 59th in the world on our healthcare but are more expensive by a factor of 2.

What accomplishments are you most proud of both personally and professionally?
I am very proud that the Smith & Nephew family welcomed me and that our team is making an impact. We have a very clear vision of the future and we are positioning ourselves to be a very valuable asset in the healthcare world.
Personally? My kids. I have 3 beautiful boys 17, 14, and 10, and one little baby girl 10 months old. I do a little hunting, fishing, play a little golf but, seriously, I travel and I don’t have much time. I spend my time playing with my kids – they are my world.

Related Story

Producing Longevity

By CONSTANCE ADCOCK

VISIONAIRE™, introduced a decade ago, is a technology that uses Patient Matched instruments and MRI scans to reduce multiple steps in a traditional surgical technique.

Patients can expect the VISIONAIRE VERILAST™ knee developed by Smith & Nephew to last 30 years, twice the industry expectation. The key to its success are two advanced surfaces, OXINIUM™ (oxidized zirconium), a patented metal alloy, and cross-linked polyethelene (XLPE). Zirconium is a biocompatible metallic element which is in the same family as titanium. OXINIUM takes on the best characteristics of metal and ceramics.

The metal gives it strength and the ceramic gives it smoothness. Together, they provide a surface with outstanding resistance to wear. Testing has demonstrated that when OXINIUM is used, there is an 85 percent decrease in polyethelene wear when it is compared to a standard knee, which is made of cobalt chrome. Wear is one of the major causes of implant failure.

When Smith & Nephews’ engineers told Joe DeVivo that no knee could withstand more than 25 million cycles on the tester and that they only had one machine, he asked them to buy another cycle machine and to keep running the tester until the knee fails. The cycler had passed 64 million cycles when this article was written. Thirty years of wear is represented by 45 million cycles. It took three years to run the test to receive the FDA 30-year claim, which ended in 2009. The cycler is still going.

Tags:

Joe DeVivo, Joseph DeVivo, knee implant device, Smith & Nephew, SURESHOT, tibial fracture, VERILAST, VISIONAIRE

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