Rough US Economy On Radar Screen For Replacement Joint Makers

CNN Money/Dow Jones—October 29, 2008

The troubled economy may leave people weak at the knees, but also less inclined to fix their damaged joints.

Thus far it appears makers of artificial joints aren't experiencing market trouble due to the sputtering U.S. economy, but worries about an impact may be weighing on their stock prices. Industry watchers and joint manufacturers are keeping a close eye on the economy amid concerns that growth could be squeezed as patients worry about job stability or lose their health-insurance coverage.

Replacement joint surgery fixes painful and often debilitating problems, but is an elective procedure that tends to carry sizable out-of-pocket expenses.

Surgeons at well-known orthopedic implant facility, Hospital for Special Surgery in New York City, said they haven't seen the economy slow business thus far.

But there are a handful of reasons why the market for replacement joints may have some economic vulnerability. While roughly two-thirds of hip- and knee- replacement patients are older and covered by Medicare, the rest are covered by private insurance, which leaves them more vulnerable to employment changes that could alter their coverage.

Patients in this economy may worry that during a six-week hiatus from work to have their hip replaced, they'll be replaced. On the other hand, however, this may be balanced by patients who feel motivated to get surgery done before they lose their jobs and benefits.

"It can go both ways, there's no question about it," said Mathias Bostrom, an orthopedic surgeon at Hospital for Special Surgery.