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Editor’s Note: The trauma market is largely driven by the need to repair fractures in the hips and upper extremities. In recent years, it has attracted established players from other orthopedic subsegments that seek to diversify their portfolios, startups with novel technology and numerous players focused specifically on foot and ankle. We spoke with David Kay, M.D., a foot and ankle surgeon and orthopedic device entrepreneur, to gain his perspective on current and future factors affecting the trauma market. His comments originally appeared in THE ORTHOPAEDIC INDUSTRY ANNUAL REPORT®.
MARKET HEALTH
The trauma market environment has changed drastically over the past few years. The market is very confused, and the innovation process appears to be broken.
Reimbursement is predicated on proof, so technology that is not backed by adequate data is typically not covered. That creates the dilemma: How do you develop technology that is new, offers real value and is not a commodity? Innovations and new materials rely on clinical results to prove their worth and coverage. That takes time and investment. Companies need to decide whether or not it’s worth human effort and capital. This can impact the rate of innovation as companies grapple with the decision to invest in clinical trials to not only get their product to market, but also for it to be a covered item that hospitals will consider.
PRODUCT AND PLAYER TRENDS
The ultimate goal is favorable clinical results, and innovations in enabling technologies will further this aim. Anything that can make an improvement in results at a price point that’s affordable will be the frontrunner.
One specific area poised for innovation is navigation. Navigation improves consistency in surgery. Robots are expensive. If companies can create products that enable physicians to be consistent in their procedural work, and that can make the average surgeon even better, then everyone wins. I think the focus needs to be not just on variations of what’s already available, but creating an affordable system to improve surgical outcomes.
Another area that is becoming a hot topic is defining and considering the total cost of care. Wound closure devices, suture and staples, are relatively inexpensive materials. However, the time spent on insertion can cost upwards of $60 to $100 per minute. If we think of surgery as a disassembly then reassembly process, the closure stage is critical and consumes a significant part of the entire operative time. The attention of surgeons, hospitals and industry is to focus solely on the correct placement of the implants used in the repair or reconstruction. Little to no attention has been paid to the closure, which has changed minimally. Any product that can improve the efficiency and lessen the amount of lost time (and therefore lost dollars) at all stages of the surgery will see market traction. Patient experience is a component of surgery that has only recently received attention. Removal of sutures and staples is not a pleasant experience and negatively affects patient perceptions.
FUTURE MARKET FORCES
We will continue to see the current pressures play out over the next several years. Surgeons are concerned with product cost, as well as delivering improved surgical results. Sometimes the covered, less expensive implant is more cumbersome—clumsier to use—and yet the surgeon is held responsible for the outcome. Hospitals are tasked with keeping the price at a reasonable point even as reimbursement lessens. In most hospitals, surgeons are using what somebody else picked, whether it’s the best option or not.
Payors are reimbursing at a lower rate, including for proven items that have been on the market for a significant amount of time. Surgeons have to do a lot of work to prove that a particular device or technique actually works and qualifies for reimbursement.
The future is all about quality metrics. Streamlining tools and technologies to enable a surgeon to efficiently and effectively complete a procedure and aftercare will help to align the price points, reimbursement and clinical results to create space for further innovation.
Editor's Note: The trauma market is largely driven by the need to repair fractures in the hips and upper extremities. In recent years, it has attracted established players from other orthopedic subsegments that seek to diversify their portfolios, startups with novel technology and numerous players focused specifically on foot and ankle. We...
Editor’s Note: The trauma market is largely driven by the need to repair fractures in the hips and upper extremities. In recent years, it has attracted established players from other orthopedic subsegments that seek to diversify their portfolios, startups with novel technology and numerous players focused specifically on foot and ankle. We spoke with David Kay, M.D., a foot and ankle surgeon and orthopedic device entrepreneur, to gain his perspective on current and future factors affecting the trauma market. His comments originally appeared in THE ORTHOPAEDIC INDUSTRY ANNUAL REPORT®.
MARKET HEALTH
The trauma market environment has changed drastically over the past few years. The market is very confused, and the innovation process appears to be broken.
Reimbursement is predicated on proof, so technology that is not backed by adequate data is typically not covered. That creates the dilemma: How do you develop technology that is new, offers real value and is not a commodity? Innovations and new materials rely on clinical results to prove their worth and coverage. That takes time and investment. Companies need to decide whether or not it’s worth human effort and capital. This can impact the rate of innovation as companies grapple with the decision to invest in clinical trials to not only get their product to market, but also for it to be a covered item that hospitals will consider.
PRODUCT AND PLAYER TRENDS
The ultimate goal is favorable clinical results, and innovations in enabling technologies will further this aim. Anything that can make an improvement in results at a price point that’s affordable will be the frontrunner.
One specific area poised for innovation is navigation. Navigation improves consistency in surgery. Robots are expensive. If companies can create products that enable physicians to be consistent in their procedural work, and that can make the average surgeon even better, then everyone wins. I think the focus needs to be not just on variations of what’s already available, but creating an affordable system to improve surgical outcomes.
Another area that is becoming a hot topic is defining and considering the total cost of care. Wound closure devices, suture and staples, are relatively inexpensive materials. However, the time spent on insertion can cost upwards of $60 to $100 per minute. If we think of surgery as a disassembly then reassembly process, the closure stage is critical and consumes a significant part of the entire operative time. The attention of surgeons, hospitals and industry is to focus solely on the correct placement of the implants used in the repair or reconstruction. Little to no attention has been paid to the closure, which has changed minimally. Any product that can improve the efficiency and lessen the amount of lost time (and therefore lost dollars) at all stages of the surgery will see market traction. Patient experience is a component of surgery that has only recently received attention. Removal of sutures and staples is not a pleasant experience and negatively affects patient perceptions.
FUTURE MARKET FORCES
We will continue to see the current pressures play out over the next several years. Surgeons are concerned with product cost, as well as delivering improved surgical results. Sometimes the covered, less expensive implant is more cumbersome—clumsier to use—and yet the surgeon is held responsible for the outcome. Hospitals are tasked with keeping the price at a reasonable point even as reimbursement lessens. In most hospitals, surgeons are using what somebody else picked, whether it’s the best option or not.
Payors are reimbursing at a lower rate, including for proven items that have been on the market for a significant amount of time. Surgeons have to do a lot of work to prove that a particular device or technique actually works and qualifies for reimbursement.
The future is all about quality metrics. Streamlining tools and technologies to enable a surgeon to efficiently and effectively complete a procedure and aftercare will help to align the price points, reimbursement and clinical results to create space for further innovation.
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DK
David Kay M.D., is a foot and ankle surgeon, Partner at Crystal Clinic and Managing Partner at Extremity Development Company, an incubator focused on next-generation extremity products. Dr. Kay founded OrthoHelix in 1995 to develop innovative implants and instruments for small bone reconstructive foot and ankle surgery. OrthoHelix was acquired by Tornier in 2012 for $140 million.
