How to Benefit from Knee Replacements

The Journal of Bone and Joint Surgery quoted a study done in 2005 which projected that in the US alone, by 2030, the number of yearly total knee replacements would be up to 3.5 million.  What does that mean to us as investors and aging Americans?

What is a knee replacement?

A knee replacement typically involves a surgical removal of damaged bone and cartilage in your thigh, shinbone and kneecap and then replacement with a metal and plastic medial device (artificial joint).

Who has knee replacements?

Although knee replacements used to be the domain of those 80 and over, there is a rising trend for folks in their 50’s and 60’s to seek pain relief in their knee joints so they can stay active as as they age. In addition, the nation’s growing obese population often wear out their natural joints faster due to the mechanical wear and tear caused by the extra weight, and of course the baby boom generation continues to dominate number wise and is growing older as well.

Patients opt for the surgery because it can have a dramatic and beneficial affect on their lifestyle. Some go from constant pain, sleeplessness caused by pain and inability to walk without assistance to a normal or near normal function with little or no pain.

Will knee replacement surgery continue to grow?

A study authored by Elena Losina, a professor of orthopedic surgery at Harvard Medical School, and reported by the New York Times article  found that knee replacements are ‘cost efficient’ surgeries. NY Times reported that a year of bettery quality life cost $18,500 – much below the generally considered cost effectiveness threshold cost of $50,000.

Because most insurances will pay for the procedure, as does medicare, patients are more apt to have it done to gain the benefit. Even if medicare procedures are required to be ‘cost efficient’ in the future before it pays, this one is likely to survive because it has already been declared to be cost effective.

What causes a need for knee replacement?

Osteoarthritis seems to be the real culprit. Many people over the age of 50 suffer from this ‘age related’ arthritis in different parts of their bodies. Stiffness that goes away with a few minutes warmup, popping or cracking of the joints and pain in load bearing joints are all symptoms.

The US National Library of Medicine claims that ‘it is a normal result of aging’ (and yet some don’t suffer from it, hmmmm). They also state these additional facts:

• “OA tends to run in families.
• Being overweight increases the risk of OA in the hip, knee, ankle, and foot joints because extra weight causes more wear and tear.
• Fractures or other joint injuries can lead to OA later in life. This includes injuries to the cartilage and ligaments in your joints.
• Jobs that involve kneeling or squatting for more than an hour a day put you at the highest risk. Jobs that involve lifting, climbing stairs, or walking also put you at risk.
• Playing sports that involve direct impact on the joint (such as football), twisting (such as basketball or soccer), or throwing also increase the risk of arthritis.”

How can you benefit from knowledge of knee replacement surgery?

Avoid having a knee replacement.

If you stay slender, keep active and don’t do activities that add undue stress to joints, you may not ever need a replacement.

If you do have pain, you can still avoid surgery by trying other methods – such as taking over the counter pain medication, steroid injections, knee braces and use of a device (such as a cane) to take the weight off the joint as you use it. Other alternatives are also in the wings of development.

Avoiding the surgery saves you time and money. Even if your insurance pays for most of the procedure, you likely have a co-pay for the doctor, the hospital and for the post operative physical therapy. You may have to hire someone for a few weeks to assist in your home (especially if you live alone). In addition, you lose work time – possibly taking reduced pay or relying on short term disability to tide you over for 6 weeks or so while you recuperate.

Become an arthroscopic surgeon.

As early as 2009, the American Academy of Orthopedic Surgeons predicted that by the year 2016 72% of needed knee replacements will not be able to be done due to a shortage of surgeons trained in the surgery.

Depending on specialty, some of these types of surgeons can make between $300,000 and $500,000 a year. Of course there is a lot of schooling and training and practice, as well as potentially high malpractice insurance and other costs involved.

Invest in companies serving the knee replacement market.

Although I’m not an adviser and am not recommending that you invest in the following companies, they are ones that produce medical devises, including replacement knee joints:

MAKO Surgical makes an advanced robotic arm solution and orthopedic knee and hip implants for orthopedic procedures.

Wright Medical Group designs, manufactures, and markets reconstructive joint devices and biologics.

Exactech provides implant devices, related surgical instruments and biological material and services to orthopaedic surgeons that allow them to make patients more mobile. One of those is an artificial knee.

Hitching your investing dollars to the right industry – within your own targeted allocation – may help your total profits float up with the number.  Mecdial implants such as artificial knees seems promising to me.

Do you know someone who has had a knee replaced? What other steps can we take to benefit from the coming knee replacement explosion?