By Masha Dumanis
It’s BAAAAACK!!! If we are using AAOS booths to judge the impact of COVID, it’s safe to say the MSK world is ready to leave the pandemic behind. At 10 am Wednesday morning, the exhibit floor was bustling with activity. The booths are bigger than in ’21 and ’22 and foot traffic is up, if not 100% of former volume.
What is valuable about AAOS beyond its baseline value as a conference for clinicians to share research, catch up on CE, and for OEMs to display their technology – it is a massive congregator of the entire MSK industry. Last week the top innovators, financiers, marketers, and strategists in MSK – along with their connectors, gathered in Las Vegas to assess the state of orthopedics and discuss how to move the industry into the next era. This included several conferences and events around the mainstage event. I had the privilege of attending several of these industry leading events, Canaccord Genuity’s Annual Musculoskeletal Conference and Epstein Becker Green’s Annual Physician Transaction Conference which helped inform my thinking on the evolution of the industry.
Addressing the Triple Aim with Innovation Will Require Cost Reduction
Most of you know the Institute for Healthcare Improvement’s framework of the “Triple Aim” for optimizing health system improvement. It states that new products must do 3 things 1. Improve the patient experience of care (quality and satisfaction), 2. Improve population health, and 3. Reduce the per capital cost of healthcare.
While it’s true that for each individual innovative product we examine, we are often looking for a cost-effectiveness story to present to the facility administrators, or to payers to improve coverage, I believe we are at a cross-roads where the reality is we are not going to achieve a “price premium” for most innovative products. Pricing pressures in the industry have been felt for nearly a decade, and with a mass migration of procedures to the lower-cost ASC setting, price becomes even more front and center. We will need to be able to find ways to fit innovation into current pricing models and to draw value for the innovators through the scale achieved. Displacing outdated technology, improving efficiency (more on this later), improving outcomes, and for those with winning products, gaining share.
COVID Impact, Private Equity, and OR Efficiency
Demand for orthopedic services, particularly surgery, in many markets continues to climb as we work through the COVID backlog, continue to deal with an aging population, and manage the early retirement of many in the orthopedic surgery profession through COVID. The increase in demand and decrease in supply highlights the need for efficiency in the field. “There has definitely been an acceleration in orthopedic practice roll ups,” said Gary Herschman, National Leader of Epstein Becker Green’s Healthcare Transaction Group. “Physician groups have been facing challenges: reduction in reimbursement, value-based care, and higher staff costs. Bigger organizations can address that better,” Gary added, speaking at the welcome event for his annual Physician Transactions Conference. As Private Equity enters the space to fill the financing gaps created by mass early retirement – “efficiency in the OR is critical,” says Chief Development Officer of Unity MSK, Ryan Pahler. Practices seek technology that streamline procedures in the OR, reduce turnover time, lower demand on support staff like technicians, central sterile, and even admins. “I have docs that are trying to squeeze in one to two more surgeries, not for the money, but because of demand,” Ryan adds. “Any tech that reduces time or steps in the OR is a huge win.”
One such technology stepping up to the plate is Lazurite’s Arthrofree – the first and only wireless camera for arthroscopy. The system is equipped with a proprietary, low-heat, high-intensity lighting system and is compatible with most standard surgical arthroscopy towers. While drills in the OR have been cordless for a long-time, the technology necessary to make arthroscopic cameras cordless has been lacking, until recently. Standard cables for equipment need to be disinfected and maneuvered by OR techs. While the exact cost of an OR minute is still highly debated – any time savings, particularly in highly efficient ASCs (which perform the vast majority of arthroscopy), is highly valuable. Lazurite released a study at the end of 2022 showing the set up and break down of its system vs traditional equipment saved significant time.
AI and digital scribe technology, like from larger player Nuance, or small ortho-specific players like Robin Healthcare, may be another time saver. And smart implants aren’t the only “cool” thing on the block, smart instruments and case solutions like those from SMADE and QMed can help facilities turnover ORs faster and track tools more efficiently.
Personalization in MSK Coming into the Spotlight
Some of you may remember that a year ago I spoke at Materialise’s Mass Personalization Summit saying that mass personalization in MedTech was catalyzed for growth. Indeed, we had all the enabling technology, but we were still relatively early in the adoption curve. This year, the theme of personalization was very much at the forefront. Undoubtedly, enhanced pre-operative planning, better positioning and placement through tools like navigation, augmented reality, and robotics all bring a personal touch to the surgical journey. In fact, after nearly a decade of experience, Smith and Nephew published data about improved outcomes with its Visionaire PSI (patient specific instrumentation). Questions continue to swirl, however, around the value, impact, and sustainability of personalized implants. This year, many companies put a stake in the ground on this point…
Leading up to AAOS, Materialise announced a partnership with Exactech to deliver personalized implants for complex shoulder defect patients. The Glenius implant is being included as an offering for Exactech surgeons in Europe and Australia. Democratization of personalized implants or “patient-specific” implants was a focus of several of the companies presenting at Canaccord – including Carlsmed, a company focusing on using patient-specific 3D-printed interbody devices to correct spinal deformity and alignment. Carlsmed has managed to attain NTAP – CMS pass-through payment in the hospital at one of the highest historical rates. Meanwhile – restor3D touted its platform technology including AI as a way to lower the barrier to entry to personalized implants and reduce hands-on engineering time. The company is currently focused on foot and ankle devices including fusion and talar replacement, but is looking to expand to other anatomies in the coming years. Through vertical integration and their own manufacturing, the company hopes to improve scale. In a world where we will continue to see pushback on implant costs – restor3d’s principles of AI and vertical integration make intuitive sense.
Personalization even extended beyond the implant realm as we see innovation in the rehabilitation realm. While many digital tools have entered this space in the last few years, we were really intrigued by newcomer Alyve Medical’s Neuralign S system for shoulder rehab. While the foundation of the rehab system is well known neuromuscular electrical stimulation technology (NMES), the “secret sauce” seems to be the dynamic responsiveness of the system based on smart sensor technology. The biofeedback created for the patient, along with an app for patient and therapists, helps accelerate healing.
Themes from Last Year Persist – Digital and Pain Management
If you read my blog from last year you know that the theme was data and digital. My bird’s eye view did not yield as much novelty in this space this year. Many companies were showcasing the next iteration of their digital tool or expanded indications. Continuing on last year’s theme of kinematic alignment, OrthAlign, hand-held total knee navigation system, introduced its Lantern Knee with soft-tissue balancing. Stryker, coming off their 1 millionth Mako procedure, unveiled their Mako Total Knee 2.0 “designed to deliver the same, trusted outcomes…with a new, elevated user experience.” THINK Surgical – an open platform surgical robotics company announced at Canaccord that its ASC-ready handheld TMINI should be ready by April or May of this year, while its larger footprint and autonomous robot, TMAX would be ready by end of year, following commercialization of their TSolution One. Zimmer’s sleek booth was displaying its digital ZBEdge ecosystem which incorporates the ROSA robot, mymobility, and their Canary partnered PersonaIQ smart implant, amongst other workflow software.
This year it was all about how to integrate digital tools into practice. Frankly – the menu of digital tools orthopedic surgeons have access to is becoming overwhelming – each with their own interface. I can’t count the among of times I heard that the technology or service comes “with a user friendly app” at Canaccord. Scale will play a role here, undoubtedly. As much as each one of these companies wants to believe that their technology can capture the attention of an overscheduled surgeon – the reality is most will not be able to, and whoever can roll up enough of the functionalities in one interface will likely capture the most share of wallet. These technologies can and are changing the landscape of practice – reducing surgeon fatigue, improving precision, and ultimately, improving outcomes – but we still have a ways to go to mass market adoption.
On the floor, post-op pain management products and chronic pain management tools continued to take the spotlight – with a strong presence from Pacira – with both legacy Exparel, but also iovera as a post-op pain management tool, newer entrant Heron’s Zynrelef with its “honey-like” form factor that surgeons can “drizzle in”, Innocoll, and Avanos with Coolief ablation and the OnQ pump. The recent passage of the NOPAIN act, which guarantees reimbursement for all non-opioid drugs and devices that address post-op pain (by reducing opioid utilization), has further reinvigorated the space. But in the hallways and backdrop, that’s where the innovation in pain management is REALLY happening. Fresh off a profile in MedTech strategist and a recent funding announcement from Evonik, Allay Therapeutics, a drug delivery polymer company intending to provide post-op pain for two weeks post TKA presented their latest compelling data at Canaccord. Meanwhile, the Gate Science team, developing a device that combines a port for nerve block with patient controlled peripheral nerve stimulation technology was busy touting their innovation around the meeting – hoping to take pain control out to 30 days post-surgery. We are excited to see the innovation around longer coverage of post-op pain that can prevent readmission, post-op ER visits (especially from the ASC), and reduce burden on the admin and clinical staff from unsatisfied patients.
The reality is, I couldn’t physically hit up every booth myself in the short two to three days, so if you think I missed groundbreaking innovation send me a note – I would love to hear about it.
Making and Building Friendships
And last, but not least – not to be missed were the many wonderful opportunities to connect with talented folks across the industry. The Journal of Orthopaedic Experience and Innovation (JOEI) hosted one of the best mixers of the meeting: an ortho star-studded event where ideas and jokes could be exchanged between CEOs, sales reps, ortho KOLs (and DOLs), and even strategy consultants. I am so grateful for the friends I have made, and continue to make, in the industry.
See you all next year!
Masha Dumanis is a Vice President at Health Advances with over 11 years of experience in healthcare consulting supporting clients developing commercial strategies with expertise in market assessment, competitive landscape, due diligence, and product and corporate strategy. Masha is the co-leader of the Health Advances MSK Practice and a member of the Digital Health and Health IT, and MedTech Practice leadership teams.