Next week, the eyes of the orthopedic world turn to Chicago for the annual meeting of the American Academy of Orthopaedic Surgeons.

The annual confab has never been short on news, especially last year when Stephen MacMillan then CEO of Stryker (NYSE:SYK) shocked the device world by announcing his sudden resignation. And while no one is expecting this year’s meeting to be as dramatic, there should be plenty of moments of self-reflection on where the industry is and where it’s heading in 2013.

MassDevice.com recently caught up with Jeff Binder, CEO, Biomet, for a discussion of the business of bones and joints. The privately-held Warsaw, Ind.-based orthopedic company is sometimes called a bellwether for the industry, as it typically releases its earnings ahead of the rest of the market. In this excerpt from our soon-to-be-released interview, we got Binder’s thoughts on where the industry heading and what he enjoys about the annual gathering.

MassDevice: With the American Academy of Orthopaedic Surgeons annual meeting starting next week, give us a quick state of the orthopedic industry right now.

JB: In the calendar 4th quarter several analysts reported improvements in knees, hips and spine. We’ve seen improvement in growth in the worldwide knee and hip markets as well, so I think that’s real. The market is at least stable.

If you look at the market volume downturn over the last few years, it was initially unforeseen by most of us. I think some combination of general economic conditions and maybe the increase in high-deductible private insurance (about half of our procedures are now covered by private insurance) might have caused patients to delay procedures. But they still need treatment and we’ve always expected volume would come back and it is coming back. We’ve seen some evidence of that in the past quarter.

Ultimately, I don’t think there’s a good substitute for total joint replacement in treating end-stage arthritis, and I’ve always believed that the fundamentals that drive long-term volume growth in our business – demographics, the success of our products – remain positive. They’re intact and right now current volume growth is not that far off from where it was before the downturn.

Using general terms, if you take 5% volume growth and add 3% positive mix to that, you get an 8% growth in market and everybody is happy.

If you take 5% volume growth and 2-3% of negative price and mix, you’re closer to a 2-3% growth market and that’s really not too far off from where we were in this quarter.

So if one looks at overall hip and knee growth, it’s primarily about pressure on price and mix and not about volume.

MassDevice: Do any of those pricing pressures look to be letting up any time soon?

JB:  I think it’s been persistent and stable and I think going forward it’s going to be persistent and stable.

There’s going to continue to be pressure on price and I don’t expect that to turn around in the next year or 2.

MassDevice: What’s driving the downward pressure on prices? Is it the general competitiveness of the space or are there outside factors influencing price?

JB: It’s definitely a competitive industry and there are various reasons for [pricing pressure] but hospitals are also doing a better job of negotiating.

I think hospitals have come under a lot of pressure and have gotten more aggressive and sophisticated in the way that they drive negotiations.

[Hospitals] have worked with surgeons in various ways to try and get them more on board with their approaches. I think there was a time a few years ago where hospitals, I think counter-productively, tried to drive negotiations by insisting that all of their surgeons use 1 or 2 products.

I think over time [hospitals] realized that trying to get a surgeon to change his/her practice and change the product with which he/she were most comfortable was less productive than just explaining some of the economics to the surgeons and trying to drive more across-the-board pricing changes with all manufacturers.

MassDevice: With AAOS taking place next week, what are you looking forward to?

JB: Just in general I always enjoy the meeting. I enjoy showing off our new technologies and seeing people I haven’t seen in a long time. I enjoy the interaction with surgeons. As I approach 50 it’s a little tougher on my knees and legs than it used to be. We try to make our carpet softer and my feet hurt more. Other than that, it’s a great meeting.