Medtronic buys Responsive Orthopedics

Medtronic recently acquired Minneapolis-based Responsive Orthopedics, a start-up company that specializes in selling devices to hospitals involved in government cost-cutting programs.

On Monday, Medtronic executives informed investors that they acquired the startup in a private deal with undisclosed terms. Medtronic, also based in Minneapolis, has been a minority investor in Responsive Orthopedics since 2014.

The deal stems from Medtronic's overarching strategy to capitalize on the national push for greater value in healthcare purchasing. While most orthopedic implant companies focus on innovating more features and models to drive up premium pricing, CEO Doug Kohrs founded Responsive Orthopedics with a rare vision in the med-tech world — to sell low-cost artificial knees and hips with streamlined size offerings and instrument sets.

Responsive Orthopedics' implants are intended exclusively for healthcare providers participating in federal programs to reduce costs of hip and knee procedures. These bundling initiatives push hospitals toward less expensive medical devices that deliver the same quality of care.

While the company's hip-replacement system is still in development, the total knee-replacement system earned FDA approval last year. Medtronic predicts U.S. sales of the knee implants to begin by July 2017, with hip system sales starting a year later.

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