1. Outlook for Orthopedics
Health Care Industry Committee
Outlook for Orthopedics
Ready-to-Use Presentation Slides

2. Service Lines by Volume
Orthopedics a Top Volume Contributor
Service Lines by Volume
Inpatient, 2013
Outpatient, 2013
Poised for Growth: 10-year Volume Forecasts
15%
28%
Inpatient Orthopedics
Outpatient Orthopedics
Source: Advisory Board research and analysis.

3. Growth in Key Procedures for Musculoskeletal Care
Growth Led by Inpatient Joints
Growth in Key Procedures for Musculoskeletal Care
88%
34%
67%
-26%
-66%
Source: Advisory Board research and analysis.

4. Costs Growing Alongside Volumes
Implants Driving Cost Pressures
Growth of Cost, Stays for
Spine & Joint Replacement
National Joint Replacement
Implant Costs
, All-Payer
Average Selling Price; 2008-Q
Spinal fusion costs growing at nearly twice the rate of inpatient stays
-24% 7%
-16%
-13%
2012 data was not available, and only Q1 of 2013 data was available.
Source: HCUP Nationwide Inpatient Sample (NIS); Orthopedic Network News (ONN); Advisory Board research and analysis.

5. 157% 169K Growth Largely Concentrated in Outpatient Setting
Five-Year Orthopedic Growth Trajectories
All-Payer Volume Growth Projections
Volume Growth Projections
by Key Sub-Service Lines
Orthopedic Services
Spine Services
Spine
Injections & Blocks
Sports Medicine
Hand
Joint Replacement
Foot
Fracture/Dislocation Treatment
Other Surgical Spine
Fusion
Orthopedic Trauma
Sports Medicine
Medical Spine
157%
169K
Expected five-year growth of outpatient joint replacements
Projected volume of outpatient joint replacements in 2018
Source: Advisory Board research and analysis.

6. Revisions & Replacements
Four Forces Driving Future Orthopedic Growth 1 2 3 4
Demographics
Co-Morbidities
Revisions & Replacements
Clinical Innovations
Aging population driving joint replacement volumes
Osteoarthritis affecting larger share of population
Smoking, diabetes, obesity correlated with osteoarthritis
Increased prevalence of obesity in hip replacement patients complicates outcomes
Expected increase in demand over next 20 years given higher patient longevity
“Weekend warriors” may require eventual replacements following arthroscopy
Technology improvements driving utilization
Minimally invasive surgical techniques key innovation
53%
40%
34%
80%
Population growth of 65+ year olds from 2015 to 2030
Percent of adults 65+ years old diagnosed with obesity
Rate of osteoarthritis in adults 65+ years old
Percent of people to suffer from back pain in their lifetime
Source: “Projections of the Population by Selected Age Groups and Sex for the United States: 2015 to 2060,” U.S. Census data, 2013; The Center for Disease Control, “Facts and Figures,” 2013.; Advisory Board research and analysis.

7. Technology Pipeline for Orthopedics
Future-Looking Musculoskeletal Technologies and Procedures
Joint Replacement
Spine
Sports Medicine
Well-established procedure targets innovation through niche procedures
Wide-ranging technology approaching spine intervention from different perspectives
Non-invasive therapies attempt to enable preventative interventions
Unicompartmental Knee Replacement
Niche surgical procedure offers less invasive alternative to total knee replacement for specific disease states
Robotic Assistive Devices
Passive guidance and 3D imaging platforms assist surgeons for complex UKR and THR procedures
Intraoperative Imaging
Capital technology ranging from surgical suites to portable platforms designed to improve surgeon visibility
Bone Morphogenic Protein
Biogenic technology designed to accompany spine surgeries, but has recently received negative feedback due to severe risk of complications
Platelet Rich Plasma
PRP is a injectable therapy aimed at accelerating soft tissue healing
Regenerative Medicine
Group of therapies seeking to treat tissue degeneration with autologous implantation
Source: Advisory Board research and analysis.