Orthopedic Execs Examine Innovation and Growth Opportunities at OMTEC
by Dan Cook, BoneZone
More than 1,400 orthopedic professionals — from surgeons to device companies to suppliers — recently gathered in Chicago for OMTEC® 2023 to address the global manufacturing industry’s biggest challenges and largest opportunities.
Mike Evers, Senior Analyst at ORTHOWORLD, kicked off the conference’s action-packed second day by moderating a powerful keynote panel discussion about the macroeconomic factors that are impacting the industry and shaping the future of patient care. He was joined by forward-thinking orthopedic executives who explored the strategies and technologies that will drive innovation and growth in an evolving healthcare landscape.
The panel included:
Rob Ball, CEO of Shoulder Innovations and Managing Director of Genesis Innovation Group
Wael Barsoum, M.D., President and Chief Transformation Officer at HOPCo
Nitin Goyal, M.D., Chief Innovation Officer at Zimmer Biomet
Kevin McGann, President and CEO of Accelus
Here’s what they had to say about rebounding from the pandemic, outpatient surgery’s impact on new product development and the value proposition of investing in cost-effective care.
Firm Financial Footing
The companies that excelled during the pandemic managed financial challenges caused by macroeconomic pressures and high inflation, according to Dr. Barsoum. His background as the CEO and President of Cleveland Clinic Florida fueled his interest in aggressive growth strategies, but he now recognizes the importance of long-term investments and maintaining cash reserves.
“We’ve seen a tremendous advancement in our understanding of financial markets and how to manage cash and debt,” he said.
Significant supply chain challenges, market forces and geopolitical uncertainty have forced Zimmer Biomet to diversify its supply partners and work with multiple vendors instead of single-source manufacturing. The halt in elective surgeries also drove the company to expand its product mix.
“The past few years have opened our eyes to the importance of diversifying revenue streams,” Dr. Goyal said. “We’ve been forced to think about M&A and growth opportunities in sports medicine, regenerative medicine and in spaces that people wouldn’t typically associate with Zimmer Biomet. That will strengthen the company moving forward.”
The entire orthopedic market continues to struggle with supply chain and labor issues, Ball pointed out. “Understanding how to work through those issues together has been the number one solve for us,” he explained.
Responding to the ASC Market Growth
The shift of cases from hospitals to ASCs that increased during the pandemic — Dr. Goyal said COVID added “rocket fuel” to the outpatient migration — will grow significantly over the next five years. The panelists discussed ways that suppliers and OEMs must meet the needs of this increasingly important customer base.
For example, surgeons who operate in multiple ASCs create massive logistical issues in managing the supply and delivery of several instrument trays needed to perform complex procedures such as joint replacement surgery.
“That increases the cost of doing business in the outpatient setting,” Dr. Goyal said. “It also creates an opportunity to streamline processes to meet the instrument and implant needs of ASC customers. Companies can capitalize by innovating in that space.”
McGann said that companies must minimize the number of instrument sets and orthopedic implants used during procedures performed in ASCs to limit costs and reprocessing burdens. “Sterile packaging is one way to streamline the manufacturing process and ease the challenge of inventory management from the ASC perspective,” he added.
Ball agreed with the overall concept of paring down instrument sets to accommodate the needs of ASCs. He also highlighted the difficulty of doing so while still giving surgeons the tools they need to perform successful procedures.
“Shrinking the footprint of instrument trays is nearly impossible because of the implants on the market and current surgical techniques,” he explained. “We must first reconceive how implants are placed and how surgeries are performed to develop streamlined platforms that support the ASC environment.”
Orthopedic companies must focus on simplicity, scalability and reproducibility when developing new products and technology as more cases move to the ASC setting, according to Dr. Barsoum.
He implored OEMs and suppliers to consider how they can maintain margins — or even grow them — while recognizing that ASCs are reimbursed 30% to 40% less than hospitals for the same surgeries. “Orthopedic companies that sell devices to ASCs must find ways to produce, sterilize, package and deliver them for less,” he said.
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