The U.S. President of DePuy Synthes, part of Johnson & Johnson Medical Devices, the world’s most comprehensive and broadly based manufacturer of orthopedic products, is Juan-José Gonzalez. In an interview with Orthopedics This Week, Gonzalez described a changing healthcare landscape and how his division is going beyond the implant to adjust, evolve and ensure its customers have the strongest partner possible in DePuy Synthes.
For example, Gonzalez opened up our conversation saying, “Basically our approach is going beyond the implant.” And, in case we missed the point, continued with “We are one of the few companies that is able to reinvent itself.”
This is very interesting.
Gonzalez, who joined Johnson & Johnson about a decade ago, has a particularly strong consumer products background. He arrived at J&J as part of an acquisition of Pfizer’s consumer healthcare business in 2006. Before that he was a McKinsey & Company consultant and, earlier, a senior executive at consumer marketing powerhouse Procter & Gamble.
He knows consumers. He knows markets. And he now heads the U.S. arm of DePuy Synthes, the most comprehensive supplier (sales in excess of $5 billion) to one of the largest consumer markets in the world—orthopedics.
And he is leading DePuy Synthes’ focus on technology by leveraging J&J’s alliances with some of the greatest consumer electronics and data analytic companies in the world—Google and IBM.
Where is DePuy Synthes heading?
Into a most interesting future.
The Changing Trajectory of Innovation at Depuy Synthes
OTW: In a presentation to Wall Street Analysts recently, Johnson & Johnson Chairman and CEO Alex Gorsky said that he thought his MedTech’s sales growth could exceed 4-6% on an annual basis. That sounds ambitious for such a very large company as J&J. Can you describe how DePuy Synthes expects to contribute to that goal?
Juan-José Gonzalez: I think if you look at the history of Johnson & Johnson you’ll see that we are one of the few companies that is able to reinvent itself in order to make sure it faces the challenges and opportunities as the market evolves. In order to outperform the market, that is a requirement.
We are very confident that we will be able to grow ahead of the market.
Basically our strategy is going beyond the implant.
Of course, we are very focused on leveraging our portfolio and continuing to meaningfully innovate to bring new solutions to patients and customers. And I’m not only referring to DePuy Synthes but also other sectors of Johnson & Johnson Medical Devices, like Ethicon. We are investing quite aggressively in a broader range of solutions. Like, for example, our exclusive licensing agreement with Medtrak, Inc. to offer subscription based services through a software solution known as CareSense. The system enables health care providers and institutions to collect and analyze real-time data on the “triple aim” measures of patient outcomes, patient satisfaction, and costs.
CareSense provides doctors and hospitals with the data collection and analysis tools necessary to make strategic decisions. The system makes it easy to collect outcomes data, conduct market research, administer satisfaction surveys, and analyze financial metrics.
We’re also working on new capabilities around health economics which helps to show the value of our programs for patients and surgeons around the world. Technology gives us a unique competitive advantage.
OTW: The idea of moving beyond the implant sounds like coming up with new tools for the physician.
While there is definitely an implant, physicians are facing new challenges and pressures along the lines of controlling costs, raising patient satisfaction rates and improving clinical outcomes.
Are you really talking about providing a new definition of “tools” to clinics and physicians?
Juan-José Gonzalez: Yes, that’s an accurate description of our approach. Of course surgeons need the best products and systems to make sure that they are meeting the needs of their patients. But there are other things that they need.
They need to have more optimized processes. They need to make sure they have information about the patient profile that will prepare them ahead of the procedure, during the procedure and afterwards.
Those new and increasingly critical needs are going to be very valuable and very important and that’s where we believe DePuy Synthes is going to be uniquely positioned to partner with the physician.
At AAOS [American Academy of Orthopaedic Surgeons] when we met, we were launching our Health Partner for Knees for the knee indication, a consumer application stemming from our partnership with IBM Watson.
I think, if you’re a hospital in a bundled payment environment you will need to partner with someone with these kinds of comprehensive capabilities. And we think it will be clear that DePuy Synthes is the best partner—not because we’re the biggest—but because we help them navigate through this new healthcare environment.
Adding Predictive Analytics and IBM Watson
OTW: Can you give a little history on how the program with IBM Watson came about and what were some of the aspects that IBM brought to you which you liked and prompted you to want to bring to the physician, clinic or hospital?
Juan-José Gonzalez: To begin with, we have a long history of experience with the health consumer. In our consumer division we have decades of experience looking at these types of consumer applications. So we knew how to understand patients. How to segment them. How to listen and therefore understand their needs.
What IBM Watson brings is very advanced data analytics capabilities. They actually have a significant level of expertise at capturing data, looking at patterns and trying to identify correlations which allow you to segment that patient.
Let’s say I am diabetic or obese but I have an orthopedic condition. As I decide whether to have a knee procedure or not, my doctor or her assistant can use IBM Watson’s analytics and immediately say, given my profile that I’ll need to consider an inpatient hospital procedure.
When you combine the consumer expertise of Johnson & Johnson with DePuy Synthes’ orthopedics expertise and IBM Watson’s predictive analytics then the hospital has a tool which is very powerful and can help improve outcomes and patient satisfaction along with reducing costs.
Johnson & Johnson and IBM’s newly-formed Watson Health use advanced data analysis and insights to personalized patient engagement and coaching solutions that span consumer wellness and chronic condition management.
As a first step, Johnson & Johnson is launching next-generation health and wellness coaching solutions centered on preoperative and postoperative patient care for joint replacement and spine surgeries. These mobile solutions build on sport science principles and holistic energy management training to drive sustained behavior change.
These mobile solutions draw on data, analytics and insights from the IBM Watson Health Cloud and Watson cognitive technology—including predictive analytics, machine learning, and health care provider connectivity—to improve clinical and financial results.
OTW: I think that in terms of patient satisfaction, more and more physicians are being compensated according to their patient satisfaction scores. This is not trivial. Yet, physicians with high patient satisfaction scores may not necessarily be the best physicians. Physicians may tell the patient things they do not want to hear – lose weight, stop smoking – for example. How does IBM Watson – an impartial, evidence based physician tool – help deliver unpleasant news and yet preserve those increasingly important patient ranking scores?
Juan- José Gonzalez: I think if you’re a patient the most important thing for you to know is that you’re going to get the right level of care based on your unique set of characteristics.
And, you’re right, sometimes information is difficult to deliver and to hear. But when you can say, for example, that “70% of the patients with your profile have a particular complication” and then you can say, as the physician, “We can reduce the risk of that complication by 50%, do you want to do that?” That’s the power of having this tool.
I think it has the potential to change the nature of that physician/patient relationship for the better. And, more importantly, the way the patient engages with the system, taking a more proactive role, and returning home as a healthier, more active member of society.
Adding Google to the DePuy Synthes Portfolio
OTW: Apple, of course, is famous for its consumer products capabilities. There is an argument to be made these days that companies like Apple or Google or Amazon are establishing a new standard of consumer service and care. I would add that orthopedic companies are at risk if they are not paying attention to the ways consumers are being educated by Apple or Google or Amazon or Facebook.
Juan-José Gonzalez: We believe consumer applications will play an important role in the future of healthcare. That’s why this partnership with IBM Watson and the applications which we have co-developed with them are so exciting.
OTW: Where is this program now in terms of its availability to the orthopedic physician?
Juan-José Gonzalez: We introduced it in the U.S. and we’re working with a group of hospitals, testing the application and doing the final refinements. We’re going to launch in 2017.
And we’re also finalizing the development of our hips application.
These are exciting times. There has never been a time like this one.
So, we understand and, of course, are excited about the potential with predictive analytics and IBM Watson. Now, imagine when you have true robots. Not the kind we have today. But, true robots that provide significant information and may help during surgery.
Then imagine that they have 3D printing capability—incorporated into the overall system—which is customized to the precise anatomy and clinical needs of the patient. The implant and instrument is printed in the hospital rather than shipped from a warehouse.
We’re very proud of being a strategic leader in orthopedics. We believe that the future will require all of us to embrace technology, and those who do will be the ones who will win and that’s what we’re trying to do.
OTW: At DePuy Synthes, how are you thinking about the continuously changing reimbursement environment and the still challenging patient access issues?
Juan-José Gonzalez: At Johnson & Johnson the patient is at the center of everything we do. We support any initiative that expands access to healthcare to consumers of the world.
In terms of reimbursement, I do think that moving from a fee-for-service based system to a value based system is going to be very beneficial to everybody. It puts the patient at the center of everything we’re doing. So while we are becoming more efficient we are also improving outcomes and increasing the level of patient satisfaction.
OTW: Multi-product contracts are about 25% of DePuy Synthes business. As I listen to the approach of DePuy Synthes, it seems as though this percentage will likely increase. Do you agree?
Juan-José Gonzalez: One of the things we’ve done with our operating model is create a Strategic Customer Group. For large health systems, we’ve reduced the complexity of working across different Johnson & Johnson companies and product lines to a single point of contact for all their needs. We now provide a more flexible, efficient and progressive contracting option to help reduce costs and drive standardization. We’re adding new capabilities and innovative solutions that help improve care delivery and address the goals of the Triple Aim
This is something that we believe is going to be very important. Because in a bundled payment environment it is very difficult for a hospital care provider to have 10-15 different vendor relationships for each specific procedure.
We do expect that for the most part—and there are differences from system to system—the integration of manufacturer/supplier with healthcare provider is not just about products. It’s about solutions, technology and data interface.
That’s how we’re going to be working with our large customers going forward.
Adding a Step Change in Robotics
OTW: Robotics is a hot area in orthopedics. How do you view robotics and do you expect DePuy Synthes will be a player?
Juan-José Gonzalez: We are certainly going to play in robotics. As we were discussing before, it is very important for us at Johnson & Johnson to work in a way that is going to strengthen the system and our relationship with the customer.
We’re looking at robots in ways that ensure that a provider can say “Yes, this is helping me to be much more efficient, reduce costs, improving my clinical outcomes and patients are recovering faster.”
Our joint venture with Verily Life Sciences (formerly Google Life Sciences) established the formation of Verb Surgical, an independent surgical solutions company, and is one of the core elements of our approach with robots. The goal of Verb Surgical is to develop a new digitally assisted surgical robotics platform and other surgical solutions in partnership with surgeons and hospitals to enable better patient outcomes, improve access to minimally invasive surgery, and improve hospital efficiency. We believe that if you combine Johnson & Johnson and Ethicon’s expertise in surgery with Verily’s significant technology expertise it will allow us to bring to market a robot which will integrate into the operating room and provide surgeons with a surgical performance improvement.
These types of capabilities are not available in the marketplace today. And will be very difficult to replicate.
OTW: These are exciting subjects and it is impressive that DePuy Synthes is moving in this direction. Thank you Juan-José for your candid and ultimately very hopeful vision for the future of, not only DePuy Synthes, but also of orthopedic care for patients.
Juan-José Gonzalez: My pleasure, Robin. Thank you.
