Robotic Surgery: Too Much, Too Soon? | medscape.com

With a market capitalization of more than $15 billion, Intuitive Surgical is a major player in the medical device industry. It is also the only source in the world for robotic-assisted surgery products. An evolving controversy is whether the patient benefit from a robot-assisted procedure is equal or greater than the additional cost to the healthcare system.

Robot

In recent articles, the editors at Medscape (a physician-oriented professional website owned by WebMD) have raised the issue of whether robotic-assisted surgery is being adopted too fast and being promoted too aggressively.

 

Some facts:

  • The number of procedures performed worldwide with Intuitive Surgical’s da Vinci Surgical System increased 25% from 2011 to 2012, to 450,000. 
  • The da Vinci Surgical System has been installed at more than 2,000 hospitals around the world at a cost per installation of $1.5-2.2 million plus annual service fees of about $160,000.
  • Intuitive Surgical has about 2,400 employees and had 2012 revenues of $2.18 billion, $908k per employee. That’s getting close to the almost mythical $1 million per employee revenue level and in the same neighborhood as Google ($931k).
  • The price for proprietary disposable instruments for the da Vinci System is $600-1,000. Each procedure uses 3-8 instruments.
  • A recent analysis reported that da Vinci surgeries add costs of 20% per procedure on average. The incremental costs are currently absorbed by hospitals because reimbursement rates are set by procedure, not surgical technique or technology. It is not yet clear if the extra costs will eventually be reimbursed by insurers.
  • Earlier this year, the president of the American Congress of Obstetrics and Gynecology (ACOG), issued a statement recommending against using robotic devices in routine gynecologic procedures – perhaps motivated by a 2013 JAMA study reporting that the percentage of robotically assisted hysterectomies increased from 0.5% in 2007 to 9.5% in 2010. Studies have shown that use of robotics has no clear clinical benefit over laparoscopy (the gold standard). Additionally, costs for robotically assisted hysterectomy were reported in the JAMA study to be $2189 more per case than for laparoscopic hysterectomy.
  • Some hospitals appear to be hyping and/or aggressively marketing their robotic capabilities. Investigators reported In a 2011 study that 41% of hospital websites promoted their robotic surgery capabilities and that clinical superiority was claimed on 86% of these sites, while none mentioned risks.
  • Just as with any new technology, there is a learning curve when adopting robotic-assisted surgery technology. During the learning curve, risks are higher.

Some opinions:

  • Intuitive Surgical has done a brilliant job in developing and marketing its da Vinci System, perhaps too good. The company shipped its first commercial system in 2000 and has averaged 25% annual growth ever since. The low-hanging fruit may be gone.
  • Whether deliberate or accidental, Intuitive has created the perception among the public that robotic-assisted surgery is “better” than alternative approaches. This creates demand for the procedures and indirectly, demand for Intuitive’s products.
  • There are few, if any, randomized clinical studies demonstrating a significant clinical benefit of robotic-assisted surgery over the gold standard technique, either open surgery or laparoscopic surgery. There are a few studies indicating limited advantages in outcomes in very specialized indications and a few others that show perioperative benefits such as reduced need for transfusion.
  • Some hospitals have irresponsibly hyped the benefits of robotic-assisted surgery to patients. Perhaps this is in response to competition and perhaps partly to attract patients in order to justify the large investments in robotic equipment and training.
  • Some surgeons are aggressively adopting the new technology even where there is no clinical advantage or indication. Perhaps they fear losing the revenue stream from patients or the patient stream from referring physicians.
  • The winds of change (healthcare reform in Obamacare, negative publicity about complications and costs) are starting to blow. Intuitive’s share price is down more than 34% from its peak value reached in February 2013.

Takeaways: There is a fine line between aggressive promotion and hype. In this case, the urgency and greed triggered by the “robotic gold rush” may have caused the hype line to be crossed by more than one party. Few healthcare companies conduct randomized clinical trials unless required by regulatory bodies or customers. Given the changes occurring in healthcare today, it is prudent to include outcomes and clinical studies in your commercialization plans. If your technology or product is radically different from the gold standard, you must seriously consider learning curve effects as part of market adoption. Basic training, advanced training, certification, proctoring, and partnering with professional organizations are all options when introducing new technologies.

Read more: Robotic Surgery: Too Much, Too Soon?.

A Twenty-Year Snapshot of the Health of the American People | JAMA

Fascinating glimpse into the state of our health in the U.S. and how it changed over a period of twenty years from 1990-2010.

This is a “glass half-full/glass half-empty” story. If you are in the healthcare industry, it seems that there is going to be a limitless supply of patients with chronic medical conditions for the foreseeable future. On the other hand, if you are a typical American or if you have some responsibility for public health, there is much to be concerned about. We’re spending more than ever and more than everyone else on healthcare. Although the overall health of our nation’s citizens is improving, it’s not improving as much as other wealthy countries (which are spending far, far less on healthcare).

A few examples from the abstract:

  • Ischemic heart disease, lung cancer, stroke, chronic obstructive pulmonary disease, and road injury were the most prevalent lethal conditions in terms of sheer numbers and were responsible for the most years of life lost (YLL) due to premature mortality.
  • Alzheimer’s disease, drug use disorders, chronic kidney disease, kidney cancer, and falls are increasing in incidence rates most rapidly on an age-adjusted basis.
  • Low back pain, major depressive disorder, other musculoskeletal disorders, neck pain, and anxiety disorders represented the conditions with the largest number of years lived with disability (YLD) in 2010.
  • While we are living longer, we’re living with disabilities. As the US population has aged, years lived with disability are growing faster than years of life lost overall.
  • Our lifestyle choices are disabling and killing us. Poor diet, tobacco smoking, high body mass index, high blood pressure, high fasting plasma glucose (pre-diabetes), physical inactivity, and alcohol use were the leading risk factors in disability and premature death combined.
  • Chronic disease and chronic disability now account for close to half of the US health burden.
  • We’re losing ground to our peer countries:

Among 34 OECD [Organisation for Economic Co-operation and Development] countries between 1990 and 2010, the US rank for the age-standardized death rate changed from 18th to 27th, for the age-standardized YLL rate from 23rd to 28th, for the age-standardized YLD rate from 5th to 6th, for life expectancy at birth from 20th to 27th, and for [healthy life expectancy] HALE from 14th to 26th.

No matter what you may think of Obamacare, single payer healthcare, or market-based solutions, these facts clearly show that we as a nation are not getting any “bang for our healthcare buck.” I don’t think that anyone believes we can spend our way out of this dilemma.

Takeaways: There is more data available than ever before to analyze health trends. There is an enormous interest in new technologies and methodologies that can improve a patient’s health without increasing costs. There are any number of clinical conditions upon which a startup could focus and have a significant effect on our healthcare system. Disease prevention and lifestyle modification look to be areas of focus and rapid growth. As you develop your latest medical device or as you plan your medtech startup, keep the big picture in mind. Show that your device or technology will not only work better than alternatives but that it will demonstrably improve patient health and save money.

Read more: JAMA Network | JAMA | The State of US Health, 1990-2010:  Burden of Diseases, Injuries, and Risk Factors.

Obamacare is Changing Market Access | MDDI Medical Device and Diagnostic Industry News

Access to the healthcare market is changing for medical device companies, particularly for startups with new technologies and no track record. It’s not clear to me if Obamacare is really the driver or if it’s the larger initiative of “healthcare reform” that’s causing providers and payers to make changes in the way they do business.

In any event, providers such as hospitals have become more demanding of new products and new companies. They want to see evidence of clinical efficacy as well as evidence of economic efficacy (outcomes) before they agree to purchase or in some cases, trial the products. Importantly, payers – private insurers and Medicare – are slowing, reducing, or even denying reimbursement for new products and procedures. The outcomes data is being called comparative effectiveness research. Most current data supplied by industry has been deemed insufficient. Evidence of the increased demand for data is the current emphasis on and support of healthcare IT applications by government entities as well as payers.

The authors of this article argue that responsibility for market access must be broadened to become an integral part of the commercialization process like regulatory clearance and that it should be applied to a broad cross-section of the organization and also throughout the product life cycle. This is a major change in the way that most companies conduct product development and commercialization. It will require executive management involvement and changes to strategic goals and plans to implement and sustain such a change.

For example, it is in the best interests of the organization to create and provide “strong evidence of clinical differentiation.” Not only will the evidence make it easier to get agreement from providers and payers, it also provides a degree of protection against premature commoditization. It’s equally important to lobby government officials, either directly or through a trade group. Finally the organization must be sure to protect itself by retroactively addressing products already in the market, as a demand for data could come at any time and cause significant disruptions to manufacturing, sales, materials management, etc.

Takeaways: Startup CEOs and medical device product managers, project managers, and program managers must incorporate comparative effectiveness research for both clinical efficacy and economic effectiveness into their strategic plans, product development plans, and go-to-market plans. Without outcomes data to demonstrate economic and clinical value (ECV), the risk of a failure at product launch because there are no willing buyers for your product is very high. This can kill a company or a career.

Read more: Obamacare is Changing Market Access | MDDI Medical Device and Diagnostic Industry News

How a cotton candy machine gave this NSF-funded, Indiana-based wound-healing startup its first big idea | MedCity News

If you’re interested in startups, here is a story about how one current medical device startup formed. There’s probably not a typical path for startups to follow but many do form to address one issue and ultimately become something very different.

The trendy term for this in Silicon Valley these days is “pivoting.” That’s when you fail at one thing and then figure out something else to do using your existing assets. It also goes by the phrase, “fail fast, fail cheap, and fail often.” Of course, if all you do is fail, you will never get anywhere! The methodology requires that you learn from each mistake and apply what was learned to the next project. You do need to show traction and progress before your investors and stakeholders run out of patience.

The startup in the article, Medtric, envisioned a fibrous wound dressing spun on site in a process similar to how cotton candy is formed. They failed, perhaps because they focused on a process instead of the problem. They learned from their mistake, however, and developed a nanotechnology-based dressing in their second attempt. That product along with a third seem to have tangible clinical benefits. It also helps that the products are simple and relatively inexpensive. Those attributes help attract investors. The company has received extensive grant funding and angel funding and is planning to commercialize its products in the next year.

Takeaways: Ideas for new products can come from anywhere, even cotton candy machines. What’s more important is to have a deep understanding of the problem you want to solve and the benefits your solution provides. Simplicity in explanation of your concept, plan, product, and technology makes it easier for investors and stakeholders to understand and buy into your story. Pivoting is an expected part of the innovation and commercialization process. It is always good to have a backup plan just in case your primary strategy fails.

Read more: How a cotton candy machine gave this NSF-funded, Indiana-based wound-healing startup its first big idea | MedCity News.

Fraunhofer iPad app guides liver surgery through augmented reality | engadget.com

Here is an excellent example of the innovative use of commercially available computer technology, in this case an iPad tablet, to address a clinical problem.

The problem is that surgeons performing liver surgery to resect a tumor must identify and then avoid the extensive vascular structure in the liver when removing the tumor. They must also be sure to leave sufficient liver tissue and blood vessels for the liver to function properly after surgery or the patient will die. Currently, surgeons either memorize the patient’s vascular structure after studying 3D CT scan images or they bring printouts into the operating room or they show the images on large computer monitors.

The first option for referencing the imaging information runs the risk of the surgeon forgetting an important detail or remembering something incorrectly (it happens). The second and third options’ risks are that the surgeon must repeatedly look away from the surgical field to get the structural information that will guide his/her excision. These “lookaways” prolong the procedure, cause the surgeon to lose his/her orientation, and can even cause damage if an instrument is moved during the period of inattention.

Fraunhofer, a German research institute that develops and licenses advanced technology, created a simple iPad app that allows the 3D CT images to be brought very close to the surgical field. The iPad is placed in a sterile sleeve so it can be manipulated directly by the surgeon or assistant. That would be plenty valuable if it was all that the app did. But (as the late night infomercials say) wait, there’s more!

The app uses the iPad camera to capture a live view of the surgical field and the patient’s liver. It then superimposes the vasculature from the 3D CT imaging study on the live image from the camera. That’s the augmented reality part. The app also enables the surgeon to measure the length of a blood vessel by marking it on screen and to “erase” excised blood vessels from the display. The app can also estimate the blood flow through the remaining vessels, helping the surgeon to determine if the remaining tissue will be viable.

The researchers plan to use the app next in pancreatic surgery, another organ that requires painstaking precision and relies heavily on preoperative imaging.

This app could be further improved, in my opinion, by adapting a head-worn, see-through display with a built-in camera. The surgeon would remain focused on the task and the 3D imaging would be superimposed on his field of vision. There would be no need for the awkward manipulation of a tablet on or near the surgical field. The other members of the surgical team could have their own headsets with the surgeon’s view displayed. Of course, there are no commercially available products in this category quite yet, although Google Glass is a promising candidate.

Takeaways: This is a great example of innovation in medicine by adapting the familiar (physicians are heavy adopters of iPhones and iPads) to a serious clinical problem through the development of an easy to use software app. The lesson for entrepreneurs and startup CEOs (again) is to leverage the billions of dollars of investments made by others in consumer technology and then to add value by 1. understanding the clinical problem and 2. developing a unique solution with the leveraged technology. It’s a fast, relatively inexpensive path to the market.

Read more: Fraunhofer iPad app guides liver surgery through augmented reality.

Henry Ford, Innovation, and That “Faster Horse” Quote | Harvard Business Review

OK, so Henry Ford never actually said, “If I had asked people what they wanted, they would have said faster horses.” But he might have thought it, and he definitely managed that way.

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“Henry Ford’s genius lay not in inventing the assembly line, interchangeable parts, or the automobile (he didn’t invent any of them). Instead, his initial advantage came from his creation of a virtuous circle that underpinned his vision for the first durable mass-market automobile. He adapted the moving assembly line process for the manufacture of automobiles, which allowed him to manufacture, market and sell the Model T at a significantly lower price than his competition, enabling the creation of a new and rapidly growing market.

But in doing so, Henry Ford froze the design of the Model T. Freezing the design of the Model T catalyzed the speed of this virtuous circle, allowing him to better refine the moving assembly line process, which in turn allowed him to cut costs further, lower prices even further, and drive the growth of Ford Motor Company from 10,000 cars manufactured in 1908 to 472,350 cars in 1915 to 933,720 cars in 1920.”

Unfortunately for Ford, his company was out-disrupted by Alfred P. Sloan and General Motors, which introduced a dizzying array of innovations in the ensuing years, dooming Ford to decades of second place in the race for automotive market share.

I worked for a time in marketing at General Motors. We experienced the same frustration in focus groups. People are great at asking for incremental innovations and improvements, particularly if they are experiencing a problem and if they are asked, “what do you want?” But ask them what they want in personal transportation in ten years and you either get blank stares or Jetsons flying car suggestions.

It’s the same in medicine. Performing market research with actual healthcare professionals is necessary but not sufficient. They are immersed in the day-to-day drama of healing patients and dealing with monstrous bureaucracies. It doesn’t leave much time or energy for dreaming. You can find lots of small problems to solve by spending time with healthcare workers and asking lots of questions but you need a visionary founder or a visionary physician to imagine big innovations.

Medical device entrepreneurs have to walk a fine line. On one hand, they need to establish a solution for an unmet need and show that they can grow their market in a credible way. Unfortunately, that’s a bit too conservative an approach to satisfy most investors and stakeholders. On the other hand, they can “swing for the fences” and try to commercialize a disruptive idea. That strategy usually leads to feedback that they are taking too big a risk. Either way, funding is difficult and it may be tough to recruit employees and board members.

Sometimes it’s a matter of credibility. If this is your first startup or if you have a string of less-than-successful startups, maybe you can start by playing “small ball” – to use a baseball term. Get a few wins and show the world that you can plan and execute, then bring out your Big Idea. Of course, if you have a track record of success, you can probably successfully pitch investors and attract early employees without much difficulty.

For startup CEOs, it’s a good time to reflect on why you started the company. Was it to change the world or just to make a few bucks? Perhaps your strategy should reflect your passion.

Takeaways: Do perform market research, early and often as you work to establish your startup and idea. Don’t expect perfect market validation for your disruptive idea. Consider an incremental approach if you aren’t getting traction with customers, investors, or stakeholders. Establish relationships with the visionaries in your market segment.

Read more: Henry Ford, Innovation, and That “Faster Horse” Quote – Patrick Vlaskovits – Harvard Business Review.