With the acquisition of two medical software programs from Andover, MA's S2 Interactive, Smith & Nephew ($SNN) is throwing more chips on the table when it comes to its disruptive, rep-less sales pilot program.
The applications, Virtual Backtable and TrayTouch, assist with instrumentation management during surgery at hospitals and ambulatory care centers. Typically, joint surgery can require the use of 20 trays holding more than 200 instruments, which need to be counted, cleaned and prepared prior to surgery, even though many of them won't be used, S&N says.
Teaching healthcare providers how to use medical technology is traditionally the realm of the device salesman, but Virtual Backtable can assist hospital administrators to perform that function, and reduces training time by 40%, according to the transaction's release. The program collects data on instrument utilization and provides visualization of individual surgeons' preferences so that customized trays can be created.
Using the program, "a nurse or scrub technician setting up for surgery can quickly train themselves on each surgeon's preferences, identify the instrument sequence and quickly locate every instrument within the tray," says the S&N release announcing the acquisition.
Meanwhile, TrayTouch assists with document inspection in the hospital department in charge of instrument reassembly and sterilization.
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| Smith & Nephew CEO Olivier Bohuon |
"As operating rooms continue to look for ways to improve efficiency and trim costs, better instrument management becomes vital," Stuart Morris-Hipkins, general manager of Syncera, said in a statement. "By organizing the instrument trays and the OR equipment based on the surgical sequence and the instrument usage of each surgeon, a hospital can significantly reduce the overall costs associated with instrument prep and assembly without sacrificing patient care."
Device company representatives often give doctors advice about how to use their devices while patients are on the operating table, but S&N aims to remove them from the operating room with Syncera. The company touts the cost savings of the U.S. pilot program, saying it enabled price cuts of 40%.
"A hospital making 700 procedures per year will save, with this model, roughly $4 million in cash in three years," said S&N CEO Olivier Bohuon at this year's JP Morgan Healthcare conference in San Francisco. "And this business is generating for us, which is also important, a margin which is equivalent to the margin we have with the classic, old-style business. We plan also to develop this in other countries, Australia, New Zealand, Europe."
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| Stryker CEO Kevin Lobo |
Rival Stryker ($SYK) is moving in the opposite direction, and is looking to hire additional specialized sales reps in Europe, where the company has a long history of relatively low market share compared to the U.S. At the JP Morgan Conference, CEO Kevin Lobo said it is very hard to imagine not having sales reps in the operating room until the procedures are deskilled, and dismissed Syncera, saying it isn't impacting Stryker in a meaningful way.
Bohuon poked the bigger company during S&N's Q4 2014 earnings calls saying, "It's easier to be disruptive, and actually essential to be disruptive, when you are a small player. And I'm not sure I would have been disruptive in reconstruction if I had a 40% market share. Having 11% market share in recon, you cannot allow yourself to be disruptive in terms of model, and Syncera is a good example of what we do."
Whether or not it is ultimately successful, Syncera represents many trends in the healthcare arena. As a result of hospital consolidation and more restrictive reimbursement practices, device companies across the board are rushing to offer solutions that help the providers that use their products optimize care and reduce costs.
In addition, minimally invasive spinal surgery specialist NuVasive ($NUVA) recently touted its new software for pre- and intra-operative planning at the just-completed American Association of Neurological Surgeons meeting in Washington, DC.
- read the release