Publication

Strategic Alliance of Diagnostic-Imaging and Prosthesis Industry for Orthopedic Surgery

Business

Master of Business Administration (MBA) at the International Business School Tuttlingen, Gemany, June 2010

Authors:

Dirk Müller

Summary

This master thesis discusses quantitatively and qualitatively a strategic alliance between Philips Healthcare - one of the leading companies in medical diagnostic imaging - and a fictitious manufacturer of surgical prostheses. The added value of products and services developed in this alliance were projected at an imaginary, average hospital in Europe, representing the end customer. Net Present Value approach was used.

“Virtual surgery” allows automated and editable 2D or 3D pre-operative planning tools for the selection of a suitable prosthesis and assists in developing a surgical strategy individually for each patient. As an option this virtual-surgery planning tool can be extended to serve as a real-time monitoring tool intra-operatively, when combined with imaging in the OR.

The hypothesized benefits of this co-developed system for the customer are:

  • consistent quality assurance
  • reduced implant inventory
  • simplification of logistics
  • less surgical complications
  • optimized biomechanical fit of prosthesis and bone

The profitability analysis from both Philips and the prosthesis company showed that an initial 5-year exclusive R&D program and co-marketing agreement has the greatest potential for success. In this model both companies can execute their option to continue for a second term, with the possibility to reap the rewards of their respective investments.

The largest obstacles for a broad deployment of this system are:

  • deeply entrenched surgical techniques based on eye sight only
  • difficulties to adapt computerized 3D visualization
  • the lack of dedicated product solutions overcoming these limitations
  • the dominant prevalence of the golden standard X-ray

Concepts like intra-operative navigation and minimal-invasive surgery techniques have been introduced, but have not gained as much acceptance as expected.

As a result of this work the two biggest bottlenecks for successful market penetration of all these concepts is the lack of clinical evidence and the in-depth understanding of clinical requirements.

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