A Conversation with Dane Miller, Former CEO of Biomet
Health Affairs published today this interview with Dane Miller done before he retired from his role as CEO of Biomet in March 2006. He explains historical growth in demand for orthopedic devices by several factors including increased joint wear because of two opposite trends: more active livestyles, and more obesity. Of course an aging population helped, and word of mouth from satisfied patients completemented direct-to-consumer advertising.
Miller then said price increases were due to higher costs for raw materials and labor, and improved technology. He made a not totally-convincing argument that physicians are price-sensitive in their product choices. A good chunk of the interview covers at length innovation and its sources, relationships between manufacturers and surgeons, and technology convergence found for instance in products combining devices and drugs.
A part near the end of this conversation will prove most interesting to Hospital Buyer readers since it is dedicated to rising implant costs, flat reimbursements and decreasing hospital margins on implant cases. To this Miller answered that the total procedure costs actually got lower because operations and follow-up stays are now shorter than ever. He also mentioned that the lowest-cost choice in the short term does not always cost less in the long run because of possible complications down the road. Biomet spreads operational best practices to help hospitals become more efficient, and it intends on competing on value rather than manufacturing cost. Dane Miller also made interesting points about the technical and inventory management relationship his (former) company has with surgeons that hospital administration and materials management does not necessarily have.
May 18, 2006 Related topics: People, Orthopedic