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Gap Analysis and Competitive Intelligence: Identification of Key Emerging Business Opportunities

INTRODUCTION Hip arthroplasty, or total hip replacement, is one of the most common and successful operations in the United States today. Hip arthroplasty procedures consist of the removal of a deceased hip joint and replacing it with a prosthetic. In most cases, a prosthetic hip joint includes a ball component made of metal or ceramic and a socket made out of plastic, ceramic, or metal. The major purpose of hip arthroplasty is to relieve pain in the joint, repair injury, or to improve mobility. Numerous conditions exist that create a need to a total hip arthroplasty including osteoarthritis, rheumatoid arthritis, broken hips, bone tumors, and osteonecrosis. Treatment of pain in the hip has evolved greatly over the past three centuries. In the late 1700s, severe arthritis in the hip and hip related injuries often required radical treatment, which generally meant amputation.i Amputation was often performed when it was not absolutely necessary, but was considered the ideal treatment because of the ease of operation. Physicians practiced joint excisions in the 1700s, but the operation often proved quite difficult for surgeons. Regardless, joint excision achieved the goal of saving a patients limb. The most well-known joint excisions in the 1700s occurred in the hands and elbows, which were common injuries for sailors and everyday workers. The first documented total hip excision occurred in 1821 and was performed by Dr. Anthony White in London.ii Whites procedure succeeded in ridding the patient of pain, but without a hip joint the patient suffered from instability. Throughout the 1800s surgeons attempted many different operations in order to find the optimal solution for hip pain. Operations included the creation of pseudoarthrosis, interpositional arthroplasty, joint fusion, and hip cheilotomy. Development of a hip joint prosthetic did not begin to take place until the turn of the 19th century. Professor Themistocles Gluck from Berlin first produced an ivory ball and socket joint and fixed it to bone with nickel-plated screws in 1891.iii After Gluck introduced the first prosthetic, other hip prosthetics followed and began to evolve. American surgeon Marius Smith-Petersen provided a synthetic interpositional arthroplasty with a mold prosthesis. The intent of Smith-Petersens arthroplasty was to improve bone-implant movement at the femoral and acetabular sides of the implant.iv A problem with Smith-Petersens molds, however, was that he created them using glass. While the molds appeared successful at first, the molds often broke inside the patients joint, requiring revision surgery. As a result, Smith-Petersen explored other materials such as Vitallium, which would lay the foundation for John Charnleys research on artificial hip implantation. 1

Professor John Charnley made more contributions to orthopedics than perhaps any other individual. Prior to 1958, he focused on trauma, fusion of joints by compression methods, and hip arthroplasty. Charnley was one of the few physicians who focused on the total fixation of joints and the improvement of mobility simultaneously. In 1958, he dedicated all of his efforts towards the development of hip replacement research and surgery.v Throughout hip prosthetic development, Charnley encountered numerous setbacks before finally obtaining success. In November of 1962, Charnley successfully developed and implemented a prosthetic hip replacement. Charnleys hip replacement prosthetic became the gold standard for treatment and the foundation for the development of hip prosthetics today.vi As previously mentioned, hip replacement surgery is one of the most common and successful procedures in the United States. According to the Center for Disease Control (CDC), roughly 230,000 total hip replacements occurred. The market for hip replacements is currently growing at roughly 3% per year.

It is important to note that there will most likely be a sharp increase in the number of hip replacement procedures beyond the year 2015. The United States is an aging nation, and the Baby Boomer population will soon become a primary patient population. Currently, roughly 12.7% of the American population is over the age of 65 and this percentage is expected to increase to over 19% by 2030. vii

Although the aging population will be a primary area that stimulates the growth of hip replacement operations, there are other drivers that will have a great effect on the market as well. Technology innovation, advances in biomaterials, hip resurfacing technology, and the introduction of new surgical methods will all have dramatic effects on the future of the hip arthroplasty market. Although there are many items that will drive the market, there are several market inhibitors that should be considered. Currently, the number of orthopedic surgeons is not keeping pace with the number of necessary hip replacement procedures. Therefore, the shortage of surgeons will result in a waiting list of patients to receive a hip replacement. The shortage of orthopedic surgeons in the United States may result in many of these patients taking part in medical tourism in order to have a hip arthroplasty procedure performed.

Product Innovation

Biomaterials

Re-Surfacing Technology

Procedure Advances

Market Drivers

Market Restraints

Number of Surgeons

Medical Tourism

Economy

Competitive Market

Traditionally, hip arthroplasty is an extremely painful surgery that requires the patient to remain immobile for extended periods of time in order to heal. In the past, the primary method of hip replacement employed a posterior approach the required an extremely large incision. In addition, the posterior approach requires muscles and tissue to be cut and detached from each other causing longer healing times and a greater amount of pain. Recently, orthopedic surgeons have begun to use a direct anterior approach in order to better perform hip arthroplasty procedures. The direct anterior approach uses a much smaller incision and allows muscles and tissues to be moved aside rather than being cut. This results in less pain and reduced scarring around the incision point. In addition, the direct anterior approach allows the patient to become mobile more quickly and reduces the length of hospital stays.viii The overall hip arthroplasty market generated $2.7B in 2009, and will certainly continue to grow. The market is saturated and well-served by six (6) major players: Zimmer, Stryker, DePuy, Smith & Nephew, Biomet, and Wright Medical.ix NOTE: It is currently not known how recent recalls of Zimmers Durom Cup and DePuys ASR XL Acetabular System will affect the market.

Given this market information, the overall task at hand becomes: How can Harrison Hayes assist CLIENT X in becoming the market leader in the hip arthroplasty market? 4

REFERENCES Gomez, Pablo and Jose Morcuende. Early Attempts at Hip Arthroplasty 1700s to 1950s. The Iowa Orthopaedic Journal. 25-29. 2005. ii Ibid. iii Ibid. iv Ibid. v Wroblewski, B.M. Professor Sir John Charnley. Rheumatology Journal. 824-825. 2002. vi Ibid. vii Is Healthcare Recession Proof? An Analysis of the Status of the Healthcare Industry in Some Developed Nations. Frost and Sullivan. 14 June 2010. viii DePuy Orthopedics. ix United States Hips Implant Market. Frost and Sullivan. 2009.
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