Outset Medical

CEO: Leslie Trigg
Based: San Jose, CA
Founded: 2010 (as Home Dialysis Plus in 2003)
Company website

The scoop: Medicare will spend almost $9 billion on dialysis services next year. Because of a bizarre twist of legislative fate decades ago, Medicare pays for dialysis treatment regardless of age in the U.S. after private insurance runs out. Outset Medical is looking to fundamentally disrupt all of this by lowering the labor and infrastructure costs of dialysis businesses. Between them, two companies--Fresenius and DaVita ($DVA)--run more than two-thirds of the roughly 6,500 dialysis clinics in the U.S.

What makes Outset Medical Fierce: Outset Medical started life as Home Dialysis Plus. The original intention of the company was to revolutionize at-home dialysis technology. But when now-CEO Leslie Trigg got involved as part of her role as executive-in-residence at Warburg Pincus, she helped reconceptualize it.

Instead of replacing the dialysis clinic, Outset hopes to help these services providers save money by providing them with dialysis equipment that saves on labor and infrastructure costs, as well as enabling them to provide their patients with easy-to-use, at-home dialysis equipment.

Outset's dialysis system, Tablo, is inspired by consumer design and it has a novel way of purifying water that Trigg said could enable dialysis clinics to dispense with industrial purification machines, as well as the 600 to 1,000 square feet of space that they currently require.

Tablo dialysis device--Courtesy of Outset

The startup expects that its Tablo system, which was cleared by FDA in November specifically for acute and chronic care settings including dialysis clinics and hospitals, will offer a patient self-service option for the dialysis providers. Outset has worked to make its interface intuitive; the idea is that instead of requiring the services of a medical technician, the Tablo will be run by the patient.

"The ultimate aspiration is to change the way dialysis is done," Trigg told FierceMedicalDevices. "We hear from a lot of techs--they got in it to do patient care. This is giving them back a role that they want to play, more a care coach and not a firefighter." Roughly half of dialysis clinic costs are tied to labor and water filtration, estimates Trigg.

Once a patient has adjusted to self-service dialysis within the clinic, the clinic could also offer that patient a Tablo for at-home use. Clinics are paid by Medicare about $239 per dialysis visit.

Next year, Outset expects to launch Tablo in the U.S. for use in the clinic setting.

A clinical trial for Tablo in-home use is slated to start this year and report data next year, Trigg said. The FDA has signed off on a 40-patient IDE trial for Tablo in-home use that will have patients use the Tablo device for 8 weeks in the clinic with a healthcare professional conducting the dialysis. Then they will be given instructions on using Tablo themselves and instructed to use it by themselves at home for a further 8 weeks.

The results will compare urea clearance, which is a standard measurement, to establish comparable efficacy and track adverse events to compare relative safety. Outset is seeking to establish the device as comparable on safety and efficacy with home use by a nonprofessional as compared to in-clinic use by a healthcare professional.

"For at-home dialysis, the drop-out rate has been the biggest problem--up to 50% after one-year. There are up to 77 steps to set it up for one-time use," noted Trigg. She noted that the current, incumbent at-home device requires patient use 5 to 6 times weekly--but the Tablo could be used by the same patient only 3 times a week given advances in the filtration technology.

What to look for: Deals with dialysis providers. Outset has big ambitions, but its business model is entirely dependent on converting the couple of big dialysis players. Getting these behemoths to buy-in and play nice could prove challenging. Plus, these major corporations could have their own internal issues over everything from changing roles for med techs to the extent to which they want to encourage self-service or at-home usage. Those could prove challenging to navigate.

-- Stacy Lawrence (email | Twitter)

For more:
Study: At-home hemodialysis more effective than peritoneal dialysis as more options come to the fore
Outset Medical rounds up $91M to make dialysis options more attractive
Baxter to invest $300M, hire 200 to expand hemodialysis manufacturing

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