The pitch Stryker passed on, ten years later.

Ben Schwartz, MD wrote “The Pitch Stryker Passed On” in The Surgeon’s Record on October 14. About ten years ago he went to Stryker’s campus in Mahwah, New Jersey, and proposed Arthritis Centers of Excellence: protocol-driven, value-based joint care in an outpatient center or micro-hospital, with the implant company built into running the facility. Stryker put its money into the Mako robot instead. He calls that the right call at the time, and he’s right.

His point now is that payers, health systems and site-neutral payment policy are building the model he described, without the device maker. He’s right about that too. I spent 2003 to 2009 building BrainLAB’s orthopedic business, which was the hospital-capital era in its purest form, so I know why the robot won. What has changed is who pays for the episode.

One: the implant company is a vendor, not an owner.

In the original pitch the implant company helped run the facility. That part shouldn’t come back. The federal safe harbor for surgery-center investment protects surgeons who perform procedures there, and hospitals (42 CFR 1001.952(r)). A supplier holding equity in a building where its customers operate is the arrangement that rule doesn’t cover. And the direction of the law is clear even where a bill won’t pass: physicians own the practice and the center, and whoever helps them is paid a flat, fair-market fee on a written contract.

So the version that holds is: surgeons own the center, a hospital can be a minority partner if it wants to carry the bundle risk, and every vendor, the implant company included, sells on a contract. No equity, no control.

Two: what happens after surgery is part of the episode.

Medicare’s bundles count every Part A and Part B dollar in the window unless it is specifically excluded. In TEAM that window is the 30 days after the procedure (42 CFR 512.525 and 512.537). CJR-X, which Ben notes makes joint-replacement bundles mandatory at nearly every acute-care hospital on January 1, 2028, uses 90 days. Inside that window, monitoring a patient’s recovery isn’t a new billing code. It’s a cost of the episode, and it earns its place only if the episode goes better: fewer readmissions, less post-acute care, a patient who walks sooner.

That puts the implant and the recovery in the same contract, priced together, with the outcome data to show whether it worked. The device company that offers that, openly priced and reviewed by counsel, is selling the episode. That’s the part of Ben’s pitch that was early, not wrong.

None of this needs a buyer. It needs surgeons who own their centers, vendors who accept being vendors, and a record of how the patient did that anyone can check.