The medtech giant will help manage the labs at the University Hospitals Cleveland Medical Center. 

Nancy Crotti

Medtronic will manage catheterization and electrophysiology laboratories for a Cleveland hospital, expanding a three-year-old foreign initiative to the United States.

Medtronic manages clinical support operations in cath labs and operating rooms in more than 100 medical facilities outside the U.S. CEO Omar Ishrak announced in 2013 the company's intention to branch out from being a pure-play device company to one that helps emerging markets build their healthcare infrastructure to better manage diseases while optimizing hospital efficiency.

The company said in a joint statement that it aims to improve workflow and operational efficiency for catheterization (cath) and electrophysiology (EP) laboratories at the University Hospitals Cleveland Medical Center. The agreement signals the expansion of Medtronic's managed services offering to U.S. health systems from Europe and Latin America.

Medtronic will send five to 10 employees to University Hospitals, but they will not make clinical decisions, according to Medtronic spokeswoman Katie White. Cath lab and EP lab clinical support operations--lab management, scheduling, materials management, room turnover, and process optimization--help ensure that cardiologists can identify and diagnose their patients' cardiovascular conditions. The company declined to reveal the length of its contract or the financial arrangements but said there will be more such agreements in this country.

Bringing Medtronic in could help the hospital system comply with the CMS proposal to streamline high-volume, expensive episodes of care. In July, the Obama administration released a proposal to bundle Medicare payments to hospitals for heart attacks, coronary artery bypass graft procedures, and surgical treatments for broken hips and femurs, excluding joint replacements.

CMS has said it wants include 98 randomly selected hospitals in a five-year pilot for this portion of its bundled payment program beginning in July 2017. Last month,Medtronic announced the launch of its Orthopedic Solutions Business, a Total Knee Arthroplasty System, and a Medtronic Orthopedic Solutions package meant to help health providers succeed under the new bundled payment models being rolled out by both public and private health insurers.

The new arrangement will allow University Hospitals' clinical staff to focus on patient care, according to system COO Jeffrey Peters, MD.

"Our collaboration with Medtronic gives us a unique opportunity to learn from their international best practices in inventory management and scheduling optimization," Peters said in the statement.

"Our goal in collaborating with UH is to enhance patient care and system efficiency through the unique combination of operational insights, data, medical technology, and services," added Mike Genau, president of the Americas region for Medtronic.

The company's managed service agreements brought in more than $2.1 billion revenue over an average span of six years as of August 2016, according to an August earnings call transcribed by Seeking Alpha.

"While we're still early in the journey to value-based healthcare, we remain focused and fully understanding and leading the shift to healthcare systems that reward value and patient outcomes over volume," Ishrak said during the call. "And we continue to develop partnerships and insights into how we can utilize our expertise to play a role in this evolution."

Expanding into service offerings is an growing trend in medtech and will be the topic of a discussion in a February 7 conference session led by Medi Vantage president Maria Shepherd at MD&M West. 

Nancy Crotti is a contributor to Qmed.

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