- Posted in Voice of Industry | March 07, 2016 | Comments (0)
- Tags: Editor’s Choice, surgeon
- By: Hannah Corcoran
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 in 2012, a value-based sports medicine company.
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. Currently, the focus of the company is to stay lean and increase revenue, while continuing to work on tunnel-specific devices for arthroscopic shoulder repair.
BONEZONE spoke with Dr. Sanders to learn more about the concept of value in orthopaedics and how he’s embracing it.
BONEZONE: How much of a value does your product offer?
Sanders: For an anchor-based cuff repair, it could save from $1,200-$2,000 a case depending on how many anchors you’re using. Each fixation point that the surgeon adds with a tunneler, you get a two for one fixation point trade off, so you’d have to do two anchors to do what one tunnel does. A tunneler that is repeatable within a case allows you to increase the number of fixation points and hence the strength of the repair because the strength really parallels the number of sutures going through the tendon, not the number of anchors, as we often hear in studies that are published and marketed.
BONEZONE: How can this impact the industry?
Sanders: We’re in a transition zone right now. Right now were 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 models that are coming out.
BONEZONE: 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 which 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.
BONEZONE: 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.