MDT
#We'll take two more callers, please.
Next question.
Well, given that it is consistent with what all the hospitals are reporting, I've got to say that the overall healthcare demand if you like in the US, is something that is on an upward trajectory.
That's got to be the fundamental reason and it's probably ---+ some of it is just natural demographics which provides this.
The other is probably we're seeing some of the impact of the Affordable Care Act and all of the initial pieces of increased coverage might have been more upstream in nature in diagnostics and so on.
Some of these will lead to more procedures.
Those are the only things that I can sort of intelligently talk about.
Other than that, just what we experienced.
It is not something that is easy to predict to be fair and we look at all kinds of different factors and then do the best we can.
We have leading indicators.
We talk to people and we get a sense for it, but everything else that I just said was close to conjecture on my part.
I would say the same.
It's very difficult even to get ---+ you've got to go to different data points and triangulate just to get a sense for what's happening to the volumes to go deeper level than that and understand why it's difficult to make assumptions.
It's very difficult to pinpoint the specific reason.
The other thing I would reference beyond just the increase in overall volume, the other thing that we're seeing is a mix shift, a much greater growth in the MIS procedures versus open.
And this is pretty consistent when I look at other players in the marketplace and I look at their revenue growth in the quarter.
So I'm really happy about that and truthfully, that's probably the bigger opportunity, a small uptick in surgical volumes in the US versus a real change in mix shift to MIS.
I'll go with the mix shift to MIS all day long.
And that's pretty consistent, again, with what we've seen, what our reps are telling us, and what we're seeing from other companies that are playing in the same space.
That to me is really the story.
Sure.
We detailed some of that in the commentary.
I'll let <UNK> comment on that directly.
So go ahead, <UNK>.
Sure.
So hitting the Mazor deal, we are very excited about that.
That is I'll call it one leg of a multi-pronged strategy around what we call surgical synergies.
And we feel as we move out into the future, these surgical synergies will be in Spine, our calling card.
We've got very strong enabling technology platforms in navigation and imaging.
We're excited about the partnership in robotics with Mazor.
And then integrating these platforms as we move forward, to provide a differ ---+ to differentiate spine procedures, both economically and clinically and the surgeon experience, low radiation, just an easier surgical procedures, et cetera.
We think is going to differentiate our Spine business.
And so as you move forward, and this is not ---+ this isn't five years from now.
This is going to take place quarter-over-quarter as we continue to emphasize this.
So this is something we're very excited about.
And as we move forward, outside of surgical synergies, we do have a number of products.
Starting in our FY14, FY15, our Spine business put a lot of effort into revamping the product portfolio.
And the products that are hitting the market now, our Elevate cage for example, Voyager's another one, and this quarter launching our new OLIF procedures, I'm calling them our second-generation OLIF procedures, we're getting a terrific uptick in these things.
My only regret is that two quarters ago when we were planning, we didn't plan aggressively enough.
Because I think we're hitting our maximum with sets and if we had more sets we'd even see more growth.
That's something that we're take factoring into our planning going forward is to be a little bit more aggressive.
But both from a product standpoint and from what we call surgical synergies standpoint, things are looking very good for our Spine business right now.
As you pointed out, every quarter we've improved over the last five quarters.
And it's a big shift, takes a little bit of time to change the direction and you should continue to see continued improvement quarter-over-quarter.
Thanks, <UNK>.
We'll go to one more caller, please.
No, actually it's not isolating Spine.
The other way around, actually.
There's a couple ---+ <UNK>, there's a couple changes going on and we'll get into this next week.
Just summary, one, moving into these different reporting divisions is really putting the businesses, organizing them by disease state or condition versus technology.
And the example I'll give is Neuromodulation.
That was a business largely held together based on technology and planable stimulator.
And from whether it be gastro euro, which we're now calling pelvic health, or whether it be DBS, or pain stim, they're all calling on different physicians, specialities and we really felt we would get more traction if we organized by disease state versus by technology.
So, that's going to help us one, focus on the physicians appropriately and two, innovate.
Because when we're innovating, we're looking across the disease state and across the care continuum, rather.
That's one change.
And the other change that <UNK> mentioned in the commentary was moving to this general manager structure.
So that gets to more execution.
And this is something that CBG has done over the last four years, five years, where you're having GM's ---+ general managers, that are 100% focused on the individual therapy segment that they serve and those products within that therapy segment.
And so making your businesses more smaller, more focused and granular.
So that's another component of that.
And then along with this, we have fairly sweeping leadership changes across RTG.
And many of the leaders that are you now running the group are top performers from other parts of Medtronic.
And so combined with the different structure and its disease state, organization with this GM structure to drive innovation and new players, proven players, from other areas in Medtronic, we feel very good as we hit FY17.
And again, to clarify the Spine comment, look, there's a specific Spine customer.
The only thing that we did was remove interventional from it and that is not the same customer.
It made a lot more sense to group that together with Pain where we have a lot of associated therapies and we were missing the big picture look at Pain by splitting up all the different very significant non-opioid therapies that we had.
This was really a disease-based look and a look at our customers and that will drive innovation and it will drive a clearer picture of how we go to market with our sales force.
And then, it finally leads to value-based healthcare, driving for outcomes, that's the only way in which you're going to do it.
Another thing on Spine, regarding surgical synergies, as you know the enabling technology platforms sit in what we historically call the surgical technologies, which that component of it is now in our Brain business, so NAV and imaging.
We actually built a small surgical synergy team, which is a bridge between that business and our Spine business and looking at an integrated technology road map by procedure as we move out.
And that also works for DBS as well.
So before, we had two separate businesses that weren't linked quite close enough in my humble opinion to drive the surgical synergy benefit.
So we put a small team that includes marketing as well as engineering talent to drive that integrated technology road map and that value proposition.
So just in Q4 alone, we had 15 new combined capital equipment Spine core metal deals, which is significantly more than we've had in the prior three quarters combined.
And this is something that is a result of that.
And as we move forward, you'll see the technology road map more integrated.
So we've actually built a little bit of a bridge between Spine and our capital equipment business.
Absolutely.
Sure.
Hello, <UNK>.
Look, we continue to be excited about and focused on our type 2 business.
This is a new business unit that we put in place a little over a year ago and we'll talk to you about the product road map next week at the Investor Day session, so you'll get more insight there.
But suffice it to say that our focus within type 2, first, the type 2 population is 90% of all patients with diabetes.
So it's a huge market opportunity.
When you take a look at those 90% of the patients, what we have decided to focus on is really monitoring those 90%.
We could have gone the route of insulin delivery because that's also a core competency, but insulin delivery within that type 2 population only addresses about 10% of that 90%.
The broader opportunity is within monitoring.
And what you see with Qualcomm Life, what you're seeing with iPro 2 and our new pattern snapshot capabilities are really our efforts to bring more and more advanced monitoring solutions to those type 2 patients.
And at the end, our goal isn't just to deliver a sensor to those patients or just the product, it's really to deliver an integrated solution to those patients where we bring not just a technology, but capability through analytics and insights that can give those patients actionable information so that they can better manage their disease and also to do the same thing for physicians who are managing those patients.
So we're really excited about the opportunity.
As you said, we're just getting started, but we think there's a tremendous amount of runway in this business.
Thank you.
Okay.
It's time to close the call out here and I'd like to remind you that we plan to host our Investor Day next Monday, June 6, in New York City.
We look forward to having more detailed discussions with you on our plans to deliver on these strategies that we outlined today.
And I'd also like to note that we anticipate holding our Q1 earnings call on Thursday, August 25.
And finally, in conclusion, as we've noted, we continue to focus on delivering consistent mid single-digit constant currency growth, strong EPS leverage and returning a minimum of 50% of free cash flow to our shareholders.
FY16 was indeed a successful and transformative year for our Company and looking ahead, we feel we're well positioned to participate and lead in the transformation to value-based healthcare, which can ultimately create long-term dependable value for our shareholders.
And with that, and on behalf of our entire management team, I'd like to thank you again for your continued support and interest in Medtronic.
Thank you and all of you please have a great day.
Thanks.
