Over the past few years, we’ve seen no shortage of medical technology (MedTech) breakthroughs…
But for investors hoping to strike it rich with some AI powered robot that looks straight out of Star Trek…
There’s a big problem about upgrading MedTech infrastructure most investors conveniently ignore.
Unlike the Borg epitet that “resistance is futile”…
Resistance is most definitely a problem when it comes to medical professionals adopting new medical technologies.
That’s why today, we’re going to be exploring…
The Case for Investing in “Easier-to-Adopt” MedTech Solutions
If you’ve been following our recent coverage on the growing back-pain epidemic in America…
You already know about the important role “outpatient” Ambulatory Surgical Centers (ASC) are playing in the reshaping of healthcare.
ASCs were already estimated to be a $75 billion global market in 2018. By 2026, they are projected to be worth over $120 billion.
Of the many forces impacting the ASC market, two, in particular, are…
- The pandemic and a major shift to increased outpatient surgery by CMS – Especially considering the impressive cost savings it provides across the ecosystem.
During the pandemic, hospitals were forced to decrease surgery volume, limiting access to main hospital operating rooms.
Many hospitals and surgeons shifted cases to ASC’s, which felt safer to patients who were now isolated from COVID-19 units in hospitals…
They also helped reduce hospital resource utilization and staffing burdens.
And as an extra bonus, recent research estimates that 48% of outpatient procedures are done at ASCs – saving $37.8 billion in healthcare costs for the commercially-insured population.
If all outpatient procedures were done at ASCs, $41 billion more in savings could potentially be realized.
- Increasing Demand for Minimally Invasive Surgeries – This has, in turn, accelerated interest in robotic surgery platforms at ASC’s
Because minimally invasive surgeries are safer, faster, and cheaper most would opt for this option if given a choice.
What has held the growth of minimally invasive surgeries back?
Technology and training.
Every hospital in the country that offers robotic surgery built their robotics program around the same dominant brand.
In addition, surgeons have now spent years working with the same technology, learning its capabilities, understanding their outcomes, and knowing how to talk to their patients about the value of robotic operations vs open or laparoscopic alternatives.
Combine this with the risk-adverse tendencies of medical professionals, we can start to see the “bigger picture” of the MedTech adoption problem.
Which raises another question, even if these physician-owned centers do want to upgrade their tech, who is going to pay for it?
“Despite enormous momentum with the orthopaedic (which is doctor-ese for “spine”) space, reimbursement for new technology continues to be a challenge.
Hospitals have traditionally absorbed the added costs.
However, with the transition to outpatient surgery and physician-owned hospitals and surgical centers, value justification will continue to create barriers to growth for many companies.”
90% of ASCs in the US have at least some physician ownership, with 65% of them being solely owned by physicians…
And the trend of decreasing professional fee reimbursements shows no signs of stopping; The Center for Medicare & Medicaid Services’ Physician Fee Schedule rates for 2021 were 3.3% lower than 2020.
Add in the fact that supply and equipment costs for ASCs are rising faster than reimbursements…
ASCs must find a way to alleviate some of their cost pressures if they’re going to continue growing.
Which brings us to the hardest question yet…
What exactly is “value” inside the modern day healthcare system?
You’d be hard-pressed to find a surgical association or surgical specialty that can agree on what defines value for a given surgery…
However, the literature has been clear on one thing with regards to robotics: the benefits of robotic surgery are procedure specific.
Therefore, defining value will need to be focused on not only improvements in clinical outcomes…
But also patient satisfaction measures, opioid medication utilization (i.e. reduced pain), and its ability to offer surgery to more complicated and older patients.
And if we’re calling a spade a spade here… that doesn’t look good for the current state of surgical robots.
Challenges with adopting robotics in the surgical theatre include:
- Physical size of the current robotic platforms
- Per procedure costs
- Procedural variability by surgeon, specialty, and complexity of the patient
- Reduced reimbursement rates
- Sterile processing/cleaning equipment requirements, and
- How to identify appropriate patients
And perhaps to drive another nail in the coffin on the current state of surgery robots…
With cost likely the number one issue for hospitals regarding robotic technology, available information indicates new robotic platforms won’t be less costly.
But what if there was a way to meet all of these growing ASCs demands for cheaper, faster, better performing technology?
A new – but shockingly simple – MedTech device could be one answer.
- Requires almost no additional space in the operating room…
- Cheaper than current surgical technologies for all stakeholders – patients, providers, and payers…
- Wildy more effective that current surgical technologies – From a 75% success rate to a 92% success rate…
- Customizable based on the surgeon (and patients) specific needs – This device is 3D-printed, and can be produced in a modular fashion (parts are movable and modifiable), and…
- Doesn’t need to be sterilized or cleaned, because it’s designed to be disposable after a single use.
And best of all, surgeons are already raving about how much they love using it.
Why? Because this shockingly “low tech” invention transforms a complex, multi-step process into a simple, single-step procedure…
And by extension reduces surgical risk, surgeon fatigue, and total operating time.
So, before you jump headfirst into a futuristic MedTech solution…
Consider the barriers to adoption these devices face from the medical professionals who will wind up needing to be trained to use them.
Sometimes, it’s the simple solutions that are the most revolutionary – not because they’re inherently “better” than robots, but they’re more likely to be adopted, faster, in our current healthcare ecosystem.
Jake Hoffberg – Publisher