Copy to clipboard 
The concept of value continues to dominate conversations in the orthopaedic industry. In response to this, Brett Sanders, M.D., an orthopaedic sports medicine and shoulder surgeon, created Tensor Surgical, a sports medicine company, in 2012.
Tensor manufactures a reusable transosseous bone tunneler for rotator cuff repairs to reduce/eliminate anchors, as well as a combined antegrade and retrograde suture passer. For now, the company plans to stay lean and increase revenue, while continuing to work on tunnel-specific devices for arthroscopic shoulder repair.
ORTHOWORLD spoke with Dr. Sanders to learn more about the concept of value in orthopaedics and how he’s embracing it.
ORTHOWORLD: Could you define the value that your product offers?
Sanders: Narvy, et al., just defined the anchor burden for an outpatient rotator cuff repair at a mean anchor cost per case of $3,432. For double row repairs, the mean cost in their study was $4,570. The total cost for the episode of care was $5,904, so the anchor cost was 58 to 77 percent of the total episode of care. Interestingly, this study was done with one of the most cost-effective anchors on the market.
For each fixation point the surgeon adds with a tunneler, you get a two-for-one fixation point trade-off, so you’d have to use two anchors to mechanically accomplish what one tunnel does. Financially, each anchor that is not implanted can save on the cost of the repair. A tunneler that is repeatable within a case allows you to increase the number of fixation points and the strength of the repair, because the strength parallels the number of sutures going through the tendon, not the number of anchors, as we often hear in studies that are published . The reality is that the number of sutures and fixation points are what’s important.
That’s what our device allows you to do—that unlimited fixation point. As I’ve become familiar with using it, I’ve done repairs with ten, 12, 14 fixation points per case, so it’s adding a lot of value, since the value-add increases proportionally with the number of fixation points. The more you use it, the more value it adds, in terms of cost savings. That’s a personal trade-off that each surgeon has to decide upon based on training and comfort level.
I’m actively engaged in designing hybrid techniques that involve using one or two anchors, or a limited number of anchors, combined with tunnels to satiate the demand for surgeons who believe that anchors are biomechanically superior, or feel that in certain circumstances you might need an anchor if the bone is soft. What I’m trying to promulgate is the idea of maximum outcome at minimum cost, not necessarily tunnels vs. anchors as an ideology. Hybrid methodology might be the answer, but I want to have the surgeon start thinking about the benefit relative to the cost of the technology. That’s starting to happen to some degree, especially in surgeon-owned surgery centers or hospitals or in gainsharing arrangements, but there are still plenty of arrangements where there’s a third-party payor and the surgeon has no skin in the game.
The bottom line is that a tunneler that’s reusable between cases is a great addition to the surgeon’s armamentarium, clinically and financially.
ORTHOWORLD: How can this impact the industry?
Sanders: We’re in a transition zone right now. Right now we’re at the phase of just being able to talk about and barely being able to measure quality and cost and therefore, value. There are several barriers to that. We’re not operating really in a free market, where our customers or all elements of the system don’t necessarily perceive or understand quality or value. The people who are operating in the market are often constrained by big insurance contracts or other barriers that prevent them from making decisions based on value. I think those barriers are going to be broken down with new, emerging models.
ORTHOWORLD: What are some other trends you see playing out in the orthopaedic industry in the next five to ten years?
Sanders: We see private and governmental payors that are already bundled. I think shoulder’s going to be the next one. They’re just ticking off the highest volume procedures. Shoulder already is [bundled] in several payors. That right there is the impetus to consider hybrid or transosseous techniques. If you can reduce your anchors by two or three, that’s $1,000 or more coming to your bottom line every case. Every anchor that you don’t use is going to be profit for you instead of the insurance industry or another industry partner.
Bundled care is going to decrease volume, or at least there are institutional breaks on volume already being imposed. There’s pay for performance, but it’s more just cutting volume and decreasing pay that way, by limiting volume and access, is what I’m seeing in the real world.
More cases will be performed in a bundled arrangement where costly technology and the contribution of costly technology will be more readily apparent than it is now. Now, it’s not apparent because it gets passed along through the system in many cases as a wash, or at least that’s what the business managers think. The reaction from payors and governmental agencies is to try to do things that will simply decrease the volume, and that’s going to have downstream effects on people perceiving the value of technologies and the margins that exist now.
ORTHOWORLD: Who will be the winners in the industry?
Sanders: The companies that control the physician relationships, for the time being. Increasingly, it’s going to be those that can provide value along the entire spectrum and it’s going to become a global game.
The companies that embrace the value trade-off and find the opportunity in this new trend, which is somewhat threatening to their current methodology, will survive just like they always do. Who can change enough to deliver the value that physicians are going to be looking for? Institutional pressure is coming to physicians and it’s on the physicians to figure out how to decrease the cost and so the pump is just beginning to be primed.
The concept of value continues to dominate conversations in the orthopaedic industry. In response to this, Brett Sanders, M.D., an orthopaedic sports medicine and shoulder surgeon, created Tensor Surgical, a sports medicine company, in 2012.
Tensor manufactures a reusable transosseous bone tunneler for rotator cuff repairs to reduce/eliminate...
The concept of value continues to dominate conversations in the orthopaedic industry. In response to this, Brett Sanders, M.D., an orthopaedic sports medicine and shoulder surgeon, created Tensor Surgical, a sports medicine company, in 2012.
Tensor manufactures a reusable transosseous bone tunneler for rotator cuff repairs to reduce/eliminate anchors, as well as a combined antegrade and retrograde suture passer. For now, the company plans to stay lean and increase revenue, while continuing to work on tunnel-specific devices for arthroscopic shoulder repair.
ORTHOWORLD spoke with Dr. Sanders to learn more about the concept of value in orthopaedics and how he’s embracing it.
ORTHOWORLD: Could you define the value that your product offers?
Sanders: Narvy, et al., just defined the anchor burden for an outpatient rotator cuff repair at a mean anchor cost per case of $3,432. For double row repairs, the mean cost in their study was $4,570. The total cost for the episode of care was $5,904, so the anchor cost was 58 to 77 percent of the total episode of care. Interestingly, this study was done with one of the most cost-effective anchors on the market.
For each fixation point the surgeon adds with a tunneler, you get a two-for-one fixation point trade-off, so you’d have to use two anchors to mechanically accomplish what one tunnel does. Financially, each anchor that is not implanted can save on the cost of the repair. A tunneler that is repeatable within a case allows you to increase the number of fixation points and the strength of the repair, because the strength parallels the number of sutures going through the tendon, not the number of anchors, as we often hear in studies that are published . The reality is that the number of sutures and fixation points are what’s important.
That’s what our device allows you to do—that unlimited fixation point. As I’ve become familiar with using it, I’ve done repairs with ten, 12, 14 fixation points per case, so it’s adding a lot of value, since the value-add increases proportionally with the number of fixation points. The more you use it, the more value it adds, in terms of cost savings. That’s a personal trade-off that each surgeon has to decide upon based on training and comfort level.
I’m actively engaged in designing hybrid techniques that involve using one or two anchors, or a limited number of anchors, combined with tunnels to satiate the demand for surgeons who believe that anchors are biomechanically superior, or feel that in certain circumstances you might need an anchor if the bone is soft. What I’m trying to promulgate is the idea of maximum outcome at minimum cost, not necessarily tunnels vs. anchors as an ideology. Hybrid methodology might be the answer, but I want to have the surgeon start thinking about the benefit relative to the cost of the technology. That’s starting to happen to some degree, especially in surgeon-owned surgery centers or hospitals or in gainsharing arrangements, but there are still plenty of arrangements where there’s a third-party payor and the surgeon has no skin in the game.
The bottom line is that a tunneler that’s reusable between cases is a great addition to the surgeon’s armamentarium, clinically and financially.
ORTHOWORLD: How can this impact the industry?
Sanders: We’re in a transition zone right now. Right now we’re at the phase of just being able to talk about and barely being able to measure quality and cost and therefore, value. There are several barriers to that. We’re not operating really in a free market, where our customers or all elements of the system don’t necessarily perceive or understand quality or value. The people who are operating in the market are often constrained by big insurance contracts or other barriers that prevent them from making decisions based on value. I think those barriers are going to be broken down with new, emerging models.
ORTHOWORLD: What are some other trends you see playing out in the orthopaedic industry in the next five to ten years?
Sanders: We see private and governmental payors that are already bundled. I think shoulder’s going to be the next one. They’re just ticking off the highest volume procedures. Shoulder already is [bundled] in several payors. That right there is the impetus to consider hybrid or transosseous techniques. If you can reduce your anchors by two or three, that’s $1,000 or more coming to your bottom line every case. Every anchor that you don’t use is going to be profit for you instead of the insurance industry or another industry partner.
Bundled care is going to decrease volume, or at least there are institutional breaks on volume already being imposed. There’s pay for performance, but it’s more just cutting volume and decreasing pay that way, by limiting volume and access, is what I’m seeing in the real world.
More cases will be performed in a bundled arrangement where costly technology and the contribution of costly technology will be more readily apparent than it is now. Now, it’s not apparent because it gets passed along through the system in many cases as a wash, or at least that’s what the business managers think. The reaction from payors and governmental agencies is to try to do things that will simply decrease the volume, and that’s going to have downstream effects on people perceiving the value of technologies and the margins that exist now.
ORTHOWORLD: Who will be the winners in the industry?
Sanders: The companies that control the physician relationships, for the time being. Increasingly, it’s going to be those that can provide value along the entire spectrum and it’s going to become a global game.
The companies that embrace the value trade-off and find the opportunity in this new trend, which is somewhat threatening to their current methodology, will survive just like they always do. Who can change enough to deliver the value that physicians are going to be looking for? Institutional pressure is coming to physicians and it’s on the physicians to figure out how to decrease the cost and so the pump is just beginning to be primed.
You’ve reached your limit.
We’re glad you’re finding value in our content — and we’d love for you to keep going.
Subscribe now for unlimited access to orthopedic business intelligence.
HC
Hannah Corcoran is an Associate Editor at ORTHOWORLD.
