Shoulder Surgeon Creates Value-Based Sports Medicine Company

By Hannah Corcoran for Orthopreneur Feb 2016

Tensor Surgical, a value-based sports medicine company, was born out of one orthopaedic surgeon’s realization that industry dynamics are changing, with the push for value and outcomes at the forefront.

In response, Brett Sanders, M.D., an orthopaedic sports medicine and shoulder surgeon, embraced this shift and sought to build upon proven technologies at justifiable prices. Sanders developed a reusable transosseous bone tunneler for rotator cuff repairs to reduce/eliminate anchors, and founded Tensor Surgical in 2012. The company also manufactures a combined antegrade and retrograde suture passer.

Currently, the focus of Tensor Surgical is to stay lean and increase revenue, while continuing to work on tunnel-specific devices for arthroscopic shoulder repair.

ORTHOPRENEUR spoke with Dr. Sanders to learn more about his commercialization experiences and the concept of value in orthopaedics.


ORTHOPRENEUR: What is Tensor Surgical’s backstory?

Sanders: I had an interest in design from my undergraduate engineering training, so I always had a desire to do something. When I saw value-based medicine (low cost, maximum efficiency) come into fruition, I felt that some reusable technologies in the shoulder would offer a perfect opportunity to demonstrate value on the physician level, which I really wasn’t seeing.

An engineer and I co-developed a positioning device, a beach chair positioner and a mechanical arm holder, with a company called Quantum Ops. We cut our teeth on some Class I devices and had fun with that, then decided to move on to more of a challenge with Tensor. Moving out of the positioning space and into arthroscopy instrumentation creates a much more competitive environment and requires more physician engagement regarding surgical technique and training, so it’s definitely more of a challenge.

ORTHOPRENEUR: Could you define the value that your product offers?

Sanders: Narvy, et al.1, 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 and marketed. 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 on based on their 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 gain sharing 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.

ORTHOPRENEUR: What challenges did you face, and how did you address them?

Sanders: I thought that the technical side was going to be the most difficult. It was difficult, but it wasn’t the most difficult. Our biggest commercial problem now is channel and access.

One of the most unanticipated problems that we had was the corporate hospital backlash to physician-owned distributorships (PODs). Essentially, hospitals made policies against physicians who develop and then use their technology because of PODs. We were in a situation where a physician can contrive the solution to the problem, yet they’re not allowed to use the solution by policy at the corporate level.

You have to work your way through the quagmire of bureaucracy that exists on multiple levels and find the leader and the people who are accountable for decisions, and use value-based thinking to make the leaders of these organizations understand that if you want to pursue value, the physician has to be a key element of that. If they’re not, then it’s never going to happen. This is true of gain sharing or any other business methodology.

Fortunately, our technology is obviously cost-sparing, unlike many others – that’s one reason why medical devices have gotten a bad name, because they’ve become synonymous with exorbitant costs and unmitigated cost increases. Our technology is an obvious solution, which enabled us to have a favorable argument in front of value analysis committees (VACs) and hospital chief medical officers. We have taken it all the way up to the board level of hospital organizations to get it approved.

Currently, we’re lean and working with a small group of key opinion leaders and doctors who are familiar with transosseous tunneling as a repair technique, and are confident in the outcomes and structural integrity it can produce.

ORTHOPRENEUR: How will value-based products impact the industry?

Sanders: We’re in a transition zone right now. Traditionally, big industry has thrived on the fact that cost was not a consideration of their customers, the doctors. We believe that’s changing. It hasn’t changed yet, but we see that coming. Right now, we’re at the phase of just being able to talk about and barely being able to measure quality, cost and therefore, value.

There are several barriers to that. We’re not really operating in a free market. 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 with new models that are coming out.

ORTHOPRENEUR: What is your advice to surgeons who seek to start companies of their own and commercialize products?

Sanders: Think about the barriers to access. I would define the commercialization efforts well before taking on the challenge, because there’s a big divide between making a device or a company that works, then marketing it and turning that into revenue. The relationships need to be in place; otherwise you’re taking the risk of stalling at the commercialization phase.

Pursue your passion. The only way these things get done is to have passionate specialists who deeply understand problems and take them on. It will take away from your family, your personal time and even your practice, but it can be rewarding. We need people who are passionate about doing that to get the next level of innovation. We’re done with the current “me-too” research and duplicate products. We need real, insightful, physician leaders to come up with the next wave.

References:

1. Analysis of Direct Costs of Outpatient Arthroscopic Rotator Cuff Repair
https://www.ncbi.nlm.nih.gov/pubmed/26761928