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Ask an orthopedic company about their greatest challenge, and the response is often gaining hospital approval to sell a new product. The new product evaluation process is labor-intensive and rewards companies that demonstrate the value of their technology throughout the total episode of care.
Alan Davis, M.D., a foot and ankle surgeon at Cleveland Clinic, possesses vast experience with the process. He has pitched new products and been pitched to as a former member of Cleveland Clinic’s innovation and supply chain committees and Managing Director of venture investment firm BioStar Capital.
Dr. Davis spoke at OMTEC® 2023 and shared advice on ways that companies can successfully navigate the hospital evaluation process.
What Hospitals and Surgeons Want
When designing devices, orthopedic companies must be keenly aware of the needs of all stakeholders in the hospital system, especially the surgeon and clinical team who provide care to the patient. Dr. Davis offered six considerations that hospitals will address during the evaluation process.
Transformational Technology. Surgeons are problem solvers. They seek technology that answers an unmet clinical need. “We’re looking for the most innovative, transformational devices out there to help us move patient care forward,” Dr. Davis said. “More than ever, we’re looking for novel devices, not iterative ones.”
Surgeon Skillset. Surgeons’ abilities vary widely. Orthopedic companies should keep in mind the know-how of the average surgeon, and not the highly skilled practitioner, when developing new products. “Otherwise, from a commercialization standpoint, it’s not going to work out well for anybody,” Dr. Davis said.
Device Data. Hospitals want technology backed by clinical research. “We want to see a good validation process, animal studies, human studies and hopefully outcomes from studies,” Dr. Davis said. “We also evaluate the FDA approval process. We look at a device’s indications and seek to predict how else the device will be used within the hospital system.”
Cost-Effective Solutions. Hospitals want a clear understanding of the product’s purchase price and the expense of additional resources needed to use the technology. “Companies often bring devices into the system that require additional resources to utilize them,” Dr. Davis said. “We have to consider that within the episode of care and decide whether it’s truly cost-effective.”
Reimbursement Level. Of course, evaluating a device includes knowledge of insurance approval. Cleveland Clinic calculates the total episode of care for a procedure. When considering a new product, they determine whether it will provide savings compared to the devices already in use. “Some devices, like a robot, can help us from a marketing standpoint,” Dr. Davis said. “We might not make money on it, but we agree to use it because we can be reimbursed for incremental charges, and potentially capture a greater market share.”
Customer Service. Hospitals place emphasis on customer service, especially nowadays with persistent supply chain issues and shortages in experienced surgical staff. “We give credit to companies with a good track record of representation in the O.R. to help increase case efficiencies,” Dr. Davis said. “You can’t place a dollar figure on that service, but it’s meaningful to surgeons.”
Avenues for Hospital Approval
Companies typically have multiple pathways to get their product into a hospital, including identifying a surgeon champion to pitch on their behalf in front of a product evaluation committee and responding to a request for proposal (RFP). Both routes require due diligence.
“Industry is not going to walk into Cleveland Clinic and say, ‘I’ve got the newest and best total knee,’ without having somebody sponsor it,” Dr. Davis said.
The surgeon champion process requires conversations between the physician and the orthopedic company to ensure that the necessary information is available for the evaluation process. Cleveland Clinic physicians must write a clinical justification letter and have it approved by a department chairperson before they can submit their request to present the technology in front of a product evaluation committee.
Once a physician receives approval, they must complete a seven-page online document that asks questions about how the product works, the patient benefit it provides, which procedures it will be used for and which physicians will use it.
“You can’t stand on an island by yourself; you have to have several others in the department who agree to use the product or go through the trialing process,” Dr. Davis said. “Getting through the process can be painful at times.”
Orthopedic surgeons are often involved in designing and developing new implants and instruments. Clinic Cleveland allows surgeons to sponsor the technology that they helped invent, but they must be highly transparent about their relationship with the company.
Surgeons who are permitted to present before a product evaluation committee often find that the members come from multiple disciplines. There might be the Chief of Surgery and representatives from finance, reimbursement, supply chain and different specialties. Dr. Davis said the role of the surgeon champion is to give a 10-minute presentation about the technology that satisfies the needs of the various committee stakeholders.
The company is given an assessment period if the committee approves the device. After the trial, the committee gathers feedback and then decides whether or not to grant final approval.
The second avenue to get technology into a hospital is through the RFP process. Cleveland Clinic’s group purchasing organization buys for more than 40 hospitals, bringing significant muscle to the process.
“It’s not hard to do for total hips or total knees, but we’re in the process of negotiating our trauma contract, and there are thousands of items to consider,” Dr. Davis said. “Getting manufacturers to fill out an RFP for thousands of products is difficult. Companies often bring in novel technology with the RFP. We will pay a higher premium for novel technology that comes in with other commonplace products.”
The RFP process also requires a physician petition. Dr. Davis said that hospital supply chain leaders will ask surgeons about how best to design the scope of the contract. They will conduct a surgeon survey, analyze the data, share it with the surgeons and then organize calls to collect additional feedback.
“In the past, we’ve awarded contracts to a single vendor, dual vendors and even set a price and let anybody in. Depending on the product offering, the savings we can achieve and the usage we expect from our staff, we can go in any direction on the award,” Dr. Davis said. “If it’s a single vendor award, our discounts are expected to be higher, and we expect a higher level of service from the reps. I like dual vendor deals better because they put competition inside the system.”
Technologies to Consider
BioStar Capital reviews four to five potential investment deals a day. Dr. Davis and the 100 physicians involved in the venture capital firm have seen a wide range of new products in development. Their primary focus is identifying products that solve unmet clinical needs across care settings, including ASCs and offices. Their investments also align with products they believe will see market adoption.
“Enabling technology is a huge deal right now and will continue to be as cases move into the ASC and we seek efficiencies and cost savings,” Dr. Davis said. “We think enabling technology, digital health and AI will be great fields for investment. I’m not hopeful that these platforms will be as effective for us as everybody thinks they’re going to be, but we leverage perspective from 100 doctors.”
Single-use sterile packaged implants and instruments will also see a boost as procedures move out of the hospital setting. Dr. Davis said that his ASC doesn’t have a sterilizer. Before arriving at his facility, every instrument tray goes to the hospital’s main campus for sterilization, creating an inefficient process.
Companies with disposable products need to demonstrate quality and highlight total episode of care cost savings.
Dr. Davis cited previous examples of pitching single-use products to committees, noting that he would receive questions about the downside of not receiving incremental reimbursement. He would then push back and remind the committee that there was no need to use sterilization resources or the human capital to reprocess the items. What might be evident to clinical and supply chain teams might not be as obvious to finance and administration.
Ultimately, Dr. Davis implored orthopedic companies to remember that surgeons and patients should always be at the center of new product design and development.
“I encourage companies to find a physician champion to make sure new products will solve an unmet clinical need and move medicine forward,” Dr. Davis said. “Responding to a clinical need is the basic premise of any innovation. Start there and everything else will fall into place much easier.”
Ask an orthopedic company about their greatest challenge, and the response is often gaining hospital approval to sell a new product. The new product evaluation process is labor-intensive and rewards companies that demonstrate the value of their technology throughout the total episode of care.
Alan Davis, M.D., a foot and ankle surgeon at...
Ask an orthopedic company about their greatest challenge, and the response is often gaining hospital approval to sell a new product. The new product evaluation process is labor-intensive and rewards companies that demonstrate the value of their technology throughout the total episode of care.
Alan Davis, M.D., a foot and ankle surgeon at Cleveland Clinic, possesses vast experience with the process. He has pitched new products and been pitched to as a former member of Cleveland Clinic’s innovation and supply chain committees and Managing Director of venture investment firm BioStar Capital.
Dr. Davis spoke at OMTEC® 2023 and shared advice on ways that companies can successfully navigate the hospital evaluation process.
What Hospitals and Surgeons Want
When designing devices, orthopedic companies must be keenly aware of the needs of all stakeholders in the hospital system, especially the surgeon and clinical team who provide care to the patient. Dr. Davis offered six considerations that hospitals will address during the evaluation process.
Transformational Technology. Surgeons are problem solvers. They seek technology that answers an unmet clinical need. “We’re looking for the most innovative, transformational devices out there to help us move patient care forward,” Dr. Davis said. “More than ever, we’re looking for novel devices, not iterative ones.”
Surgeon Skillset. Surgeons’ abilities vary widely. Orthopedic companies should keep in mind the know-how of the average surgeon, and not the highly skilled practitioner, when developing new products. “Otherwise, from a commercialization standpoint, it’s not going to work out well for anybody,” Dr. Davis said.
Device Data. Hospitals want technology backed by clinical research. “We want to see a good validation process, animal studies, human studies and hopefully outcomes from studies,” Dr. Davis said. “We also evaluate the FDA approval process. We look at a device’s indications and seek to predict how else the device will be used within the hospital system.”
Cost-Effective Solutions. Hospitals want a clear understanding of the product’s purchase price and the expense of additional resources needed to use the technology. “Companies often bring devices into the system that require additional resources to utilize them,” Dr. Davis said. “We have to consider that within the episode of care and decide whether it’s truly cost-effective.”
Reimbursement Level. Of course, evaluating a device includes knowledge of insurance approval. Cleveland Clinic calculates the total episode of care for a procedure. When considering a new product, they determine whether it will provide savings compared to the devices already in use. “Some devices, like a robot, can help us from a marketing standpoint,” Dr. Davis said. “We might not make money on it, but we agree to use it because we can be reimbursed for incremental charges, and potentially capture a greater market share.”
Customer Service. Hospitals place emphasis on customer service, especially nowadays with persistent supply chain issues and shortages in experienced surgical staff. “We give credit to companies with a good track record of representation in the O.R. to help increase case efficiencies,” Dr. Davis said. “You can’t place a dollar figure on that service, but it’s meaningful to surgeons.”
Avenues for Hospital Approval
Companies typically have multiple pathways to get their product into a hospital, including identifying a surgeon champion to pitch on their behalf in front of a product evaluation committee and responding to a request for proposal (RFP). Both routes require due diligence.
“Industry is not going to walk into Cleveland Clinic and say, ‘I’ve got the newest and best total knee,’ without having somebody sponsor it,” Dr. Davis said.
The surgeon champion process requires conversations between the physician and the orthopedic company to ensure that the necessary information is available for the evaluation process. Cleveland Clinic physicians must write a clinical justification letter and have it approved by a department chairperson before they can submit their request to present the technology in front of a product evaluation committee.
Once a physician receives approval, they must complete a seven-page online document that asks questions about how the product works, the patient benefit it provides, which procedures it will be used for and which physicians will use it.
“You can’t stand on an island by yourself; you have to have several others in the department who agree to use the product or go through the trialing process,” Dr. Davis said. “Getting through the process can be painful at times.”
Orthopedic surgeons are often involved in designing and developing new implants and instruments. Clinic Cleveland allows surgeons to sponsor the technology that they helped invent, but they must be highly transparent about their relationship with the company.
Surgeons who are permitted to present before a product evaluation committee often find that the members come from multiple disciplines. There might be the Chief of Surgery and representatives from finance, reimbursement, supply chain and different specialties. Dr. Davis said the role of the surgeon champion is to give a 10-minute presentation about the technology that satisfies the needs of the various committee stakeholders.
The company is given an assessment period if the committee approves the device. After the trial, the committee gathers feedback and then decides whether or not to grant final approval.
The second avenue to get technology into a hospital is through the RFP process. Cleveland Clinic’s group purchasing organization buys for more than 40 hospitals, bringing significant muscle to the process.
“It’s not hard to do for total hips or total knees, but we’re in the process of negotiating our trauma contract, and there are thousands of items to consider,” Dr. Davis said. “Getting manufacturers to fill out an RFP for thousands of products is difficult. Companies often bring in novel technology with the RFP. We will pay a higher premium for novel technology that comes in with other commonplace products.”
The RFP process also requires a physician petition. Dr. Davis said that hospital supply chain leaders will ask surgeons about how best to design the scope of the contract. They will conduct a surgeon survey, analyze the data, share it with the surgeons and then organize calls to collect additional feedback.
“In the past, we’ve awarded contracts to a single vendor, dual vendors and even set a price and let anybody in. Depending on the product offering, the savings we can achieve and the usage we expect from our staff, we can go in any direction on the award,” Dr. Davis said. “If it’s a single vendor award, our discounts are expected to be higher, and we expect a higher level of service from the reps. I like dual vendor deals better because they put competition inside the system.”
Technologies to Consider
BioStar Capital reviews four to five potential investment deals a day. Dr. Davis and the 100 physicians involved in the venture capital firm have seen a wide range of new products in development. Their primary focus is identifying products that solve unmet clinical needs across care settings, including ASCs and offices. Their investments also align with products they believe will see market adoption.
“Enabling technology is a huge deal right now and will continue to be as cases move into the ASC and we seek efficiencies and cost savings,” Dr. Davis said. “We think enabling technology, digital health and AI will be great fields for investment. I’m not hopeful that these platforms will be as effective for us as everybody thinks they’re going to be, but we leverage perspective from 100 doctors.”
Single-use sterile packaged implants and instruments will also see a boost as procedures move out of the hospital setting. Dr. Davis said that his ASC doesn’t have a sterilizer. Before arriving at his facility, every instrument tray goes to the hospital’s main campus for sterilization, creating an inefficient process.
Companies with disposable products need to demonstrate quality and highlight total episode of care cost savings.
Dr. Davis cited previous examples of pitching single-use products to committees, noting that he would receive questions about the downside of not receiving incremental reimbursement. He would then push back and remind the committee that there was no need to use sterilization resources or the human capital to reprocess the items. What might be evident to clinical and supply chain teams might not be as obvious to finance and administration.
Ultimately, Dr. Davis implored orthopedic companies to remember that surgeons and patients should always be at the center of new product design and development.
“I encourage companies to find a physician champion to make sure new products will solve an unmet clinical need and move medicine forward,” Dr. Davis said. “Responding to a clinical need is the basic premise of any innovation. Start there and everything else will fall into place much easier.”
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Carolyn LaWell is ORTHOWORLD's Chief Content Officer. She joined ORTHOWORLD in 2012 to oversee its editorial and industry education. She previously served in editor roles at B2B magazines and newspapers.
