Future: Spine Surgeons as Investors Advancing Spine Technologies. Seattle Science Foundation Speech
I want to you guys to um think back to say 100 years ago if you were sitting in a room like this having dialogue how different it would be right so see if you can transport yourself because what I saw there and the discussion there's so much technology and it's almost like it's you know it's it's not challenging to you just think about our predecessors seeing cases like these how challenging they were to actually just diagnose what what it is they're going to treat and to see patients of the patients that they try to to treat either not recover as well or not even sure how the outcome is going to be and we were worried about Hospital stay just think about the hospital stay back then so if we can do that one of the things you will realize is as a surgeon each day was a challenge for you it's a challenge of problem solving and I think today we may lose that so what I want to do is then to ask you to transport yourself into the future and in the future what are you going to do what is going to be your emotional state when you see a patient well as you're doing that right now I want to challenge you to see where you fit in and that's where my talk is on I've already gone through that where I was on the path that was laid out you go to medical school you get trained you go to an academic center and you're you're publishing you're you're you're you're asking questions you're trying to do better by your patients but then I realized that as a physician we generate all the revenues but our portion of the system is Tiny because the rest of it is actually a business and that's a lot different from a 100 years ago because the business side wasn't that well developed I maybe I should use 200 years ago today Hospital systems are business they were not invented for that and it's a US phenomenon it's not the rest of the world so in the future the hospital system is going to become more and more powerful you as a provider will not so that's either a decision you're comfortable with or is a decision you're not comfortable with so what I'm going to do is talking about the history of how neurosurgeons and spine surgeons have been actually the one investing in advancing care and now the business side is the powerful driver of actually how we deliver care because in this hospital I walk to this beautiful hospital and I know I don't know how many of you are owners in this hospital and I'm always um fascinated by Bill Gates and what he did with Microsoft here and if this were Microsoft being an engineer at Microsoft meant that you have to do a few things one you have to know what else is going on in the world you have to also invest in the next generation of Technologies so every day you're challenged to compete to get better and the company is driven by its consumers right in this hospital if you're not part of that business side the consumer experience is not part of your experience except how you treat that patient well if I were to drive up here as a consumer I would like to get Violet parked I want all the uh trappings of what I would get if I went to a restaurant or anything else like that the problem is is if the system is set up where you as a provider is not part of that decision- making then it's not a true consumer driven system because you're delivering a product and you're not part of the business that determine how the product is delivered at its best so I am interested in how we can change that for the future now I'm going to going to start with an article by Robin young and it says when No Good Deed went unpunished the first decade and this was focused on a true Pioneer someone who decided at the time that they were going to act like a surgeon 100 years ago and actually identify a problem and is going to solve it so Dr art Steepy not only identify the problem of how do you fix the spine but decided he's going to start a company around that idea okay and so in 1983 or 82 he partnered with a uh a local businessman to start aced and it was based on a pedical screw system which we use today now when he developed the system and he applied it to patients the results were immediate over 50% of the patients he operated on he was able to cut the hospital state by I'm sorry he was able to cut the hospital state by 50% on these patients that's a big change big difference that's a consumer experience that's immediately Changed by a surgeon he then tried to get FDA clearance and he couldn't get it for spine application they gave it to him for fractures bone application but he persisted and he used it off label now as he did that surgeons starting to see the benefits of this and they started to use it and it started to spread but the FDA was not ready for this and so when the 2020 program aired the uh story of a surgeon or surgeons putting pedicle screws in the in the spine it was thought to be something unscrupulous and imagine a surgeon running a spine company at that and actually making a profit so everyone who was involved in pedicle crew at the time got sued even the societies because this was seen as so outside what doctors should be doing so aced ended up settling the case for 100 thou $100 million worth of lawsuits and later on the FDA decided to look into it even further they were accused of making a profit and that was a big deal now if here's what he developed as you probably already know is to develop a a screw for the pedicle and plate now because of the lawsuits he sold the company so he sold the company they were doing uh over $100 million in revenues he sold it for 325 million and he got out of the business it was bought by the Pew the Pew kept going with this company and sold it for 3.5 billion okay you guys know the story of yaho trying to buy Google yaho trying to buy Facebook and they hold held on and now they're valued a tremendous as a result of what he did the business of spying was actually born it changed everything so now it's a business for everyone else and I'm not sure what happened with surgeons after that because that was a scary thing to be going through lawsuits and being accused of unscrupulous behavior and trying to make a profit so sophomore danic came out of this guys as tetas Scott Scottish R Hospital came up with a system pedical screw fixation they built a company called danic then merged with sophomore and metronic bought that company for $3.6 billion it's a huge sale that was in 1999 so metronics is not a spine company they bought one and so they're in the business spawn now metronics in the early years was the giant they still are and so they would look at your idea take it and they develop it and Dr Carlin is a Pioneer in developing instruments and developing uh U ideas and devices and sued metronics and one 1.35 billion so he's a surgeon he was developing the ideas now other surgeons along the way I've I've started companies Dr haer Who I know very well I know his son also very well started sepine and build that company up and sold it for 89 million to Integra spine k2m Dr KCK was at Hopkins decided to to start a company and k2m is now a public company they uh receive about $500 million in private Equity Fund and he's building that company I want to talk to you about other Pioneers who 100 years ago was looking at problems every day and trying to figure it how to solve them Dr Harmon in 1952 implanted fears in the dis phase and the idea was to treat degenerative dis disease anteriorly and maintain motion that idea was a problem for him because he was vilified about it doing this kind of surgery and he actually had to leave the country he then came back to California and practiced again then started doing fusions anteriorly that was way back in 1962 but Dr fernstrom was inspired by that and came up with a FST ball and it was rumored that John F Kennedy had that surgery never started a company and built it but that Innovation for him was real he was seeing a problem and trying to solve it now the idea of a Ferrum ball was then applied in the cervical spine so when you're a surgeon back then and you see a problem whatever technology was available you try to use it and you try to expand the the to to solve your your problem that you're facing these are patients you're seeing you didn't have the big business Machinery separating you these are things you could do and you could argue well the FDA was important later on to help regulate that and I agree with that as well but the idea is if 100 years ago if you're sitting here you actually the real problems you have to go back and solve for real patients you're not just part of a business well Dr fernon had a lot of resistance and a lot of that came from other surgeons which is not unusual and so but when you look at terms like the rape of the spine and inflammatory rhetoric when you're trying to innovate that some of the hurdles you have to get over you're outside the norm well back then it's actually was the norm to innovate it's just as we move to um to the um to to recent times that we start getting more criticism if you're a surgeon and you're trying to innovate now because of the F from ball and because of that work there's been an evolution in dis replacement as a solution and as you see most famous is the CH disc but most recently that Evolution has continued to where we have a vis elastic disc replacement in axiomed which is the company I own but part of that solution of anterior surgeon led to the Bak cage and I know Dr Bagby actually I bought all of his patents on the new improved Bak cage and he actually um has shared in spine Frontier not company I own but this work is an evolution and you know about LT cage and you see Standalone cage all those things are from Innovation by surgeons to solve problems at a time when they actually were closer to the patient and felt more invested in what they did did every day well this company was ultimately bought by Zimmer um for about $600 million Dr Mike Mark Riley looked at a problem of uh thebo fractures and built a company around a Innovative solution and Kyon was later bought by metatronics for $3.9 billion and I know Dr Mark Riley I've talked to him about his new company SI bone I also knew him when he started us which a facet replacement company so he's a surgeon that is solving a problem and turn it into a company spinology was starting by Dr kusick to also address the issu of vertial body fractures now it's been used for inner body fixation because it goes in small expands which is uh a true solution Z rmen and Su developed the xtop for solving spinos stenosis in patients that had quite a bit of comorbidities they sold that company to Kyon for $525 million they were doing $30 million in revenues Healthcare Services surgeons have been involved in starting hospitals been involved in starting institutes like the Texas Back Institute Dr rash bomb trained with Dr Bowman um long before I trained with him and Dr Bowman would tell me the story that he said he was going to go to Texas and start his own Institute Dr Bowman wanted all of us to go into academics he wasn't happy about that he couldn't visualize what Dr rash bom saw and I was just about two months ago having dinner with Rick gar and in um Dallas discussing the action at and he talked about all this experience but they built their own Institute which means that they're tied to the entire delivery process of of care to the patient digital Health spine surgeons have been involved in digital Health 1999 when the internet was booming and still young Dr ID in Florida started spine universe and I used to be one of the editors there are many surgeons he would invite to write an editorial he developed the content and that was the precursor to things like Facebook because basically he didn't have to make anything it was just content just get surgeons to write content and run a company he just didn't take that to the next level as a business Health grades WebMD Zach do other business people have come in but he had a that was Visionary for him to develop that spine connect I know Yousef I know Dr broy and I know Jeff Wang very well and they came up with with a way to leverage digital Health to connect doctors together you could share your cases you could have groups very it's a pioneering idea back in 200 2006 they just weren't able to develop into a business and so a great platform that wasn't fully leveraged I think the difference between what we're seeing here and in the past with like a an acromed Dr uh Stephy is how we approach Solutions as surgeons do we approach it just from a pure academic sense or do we approach it from a business sense do we want to take an idea like this and actually make into a business and that's where I am we are today well here is a typical surgeon who today leave here and goes out real estate first thing we want to do own a piece of real estate we've been deferring our gratification all this time living in uh Medical School apart um dorms college dorms we we know we want to own a piece of real estate we want to own our home right nothing nothing wrong with that so we real estate is comfortable for us we going to own that and we're going to start with our own home home maybe an apartment then a house as we making more money buy a bigger house we have more family that's what we do 401K you know maybe we're working for a hospital maybe we're working somewhere that has one of those great if they match it we're going to focus on that mutual funds we get a little Bolder we want to put away some money in investment we don't have the time to go into the stock market so we give it to someone else to invested for us and we choose you know low medium high risk and we don't have to think about it we're expecting it's going to make money for us life insurance we're a great Target for financial planners tell us about life insurance or you can get annuities you can get a fixed rate 7% you can borrow against it all that stuff so we put our money there some of us are bold enough we have extra time we actually enjoy enjoy playing the stock market we also enjoying going to Vegas all those things feed that that uh that um challenge for us so we play the stock market all these things we do if you look at that pie of a pot of money that we have you start dividing up among all those you can see there's not much left over for you to actually be a player on the business side of healthcare well should surgeons invest directly in healthcare well here's why you should it's a powerful long-term Trend any country as soon as they start getting more money the first thing their citizens want is better healthare the next is education right Health Care is non-discretionary you will get a a premium if you have money and you may [ __ ] when they increase it but you're still going to get your insurance you're going to spend your money so and if you look at the future of healthare there more people we want to live longer we want to do more things that's a perfect setup for an area to invest in where if you look at all the Technologies that's emerging out there one that's clear is smartphone mobile technology every single person going to have that in your hands your patients will have that in their hands your patients are not just going to go look up in Yellow Page anymore or just search on the internet to find you they're going to actually want to consume digital health information online long before they come to you you have to be ready for that and if you look at a lot of the companies that are overnight success they don't own anything Uber does not own a single car Pinterest doesn't own anything they aggregate users and they leverage that so information is going to be key and getting people to consume that as value right you have information it's your medical knowledge it's tremendously valuable but how do you monetize that our patient we're in a beautiful hospital here but at the end of the day when you leave this room and you go to operate you go to a room with the operating room table in there lights and all that that could be anywhere that could be anywhere it doesn't have to be in this beautiful building so outpatient is real I hear the difference between endoscopic approach to to the uh the to the C2 uh versus posterior approach versus through the mouth all that stuff well when the when the patient's going to make that decision I guarantee you they're going to go to the surgeon that's going to be out patient that's real plastic surgeons know that I don't know how many plastic surgeons today want to operate in a hospital they go to Surgery Center there over 7,000 Surgery Center more than Hospitals now I'm growing so what I contend is investing in healthcare is investing in what we all consume every one of us in this room is a patient it's a guarantee that you're going to see a doctor so you are a patient so if you think Facebook is Big consider a company that connects every single person on the face of the Earth through healthare because you have to utilize healthare that's what we want to do here's why because surgeons Drive the entire system all the money that's coming into the hospital all the money that's coming into the system you're driving that okay over a trillion do dollars in just a hospital the premiums for insurance companies over $650 billion the revenues from medical devices that you're making over $150 billion we put those in so in 2005 I was still at upen I started a fund invested in the per pical schol system called the Mantis minimal access non-trauma traumatic insertion system and I sold it to Striker fine and that that money we used to capitalize the fund and since that time we've been organically building a Health Care system not interested in building one company or two company it's a full health care System here are a couple of the companies are in that I acquired aomed this is a company started by uh art stepy is his first disc the arlex disc and he had trouble finding the material that would uh not delaminate and would could be attached to to the metal but he understood something clearly when you look at the fernstrom ball it's not a true disc replacement he wanted a true dis replacement which was visco elastic just acting compression today we have dis replacement that are ball and socket joints that's not a dis replacement so this is what we do we own this um disc and here's the original idea and from that the freedom disc was developed they had about $85 million in funding uh they ran into trouble with cash and I went in and I bought the company here's spine Frontier after I sold the Mantis to Striker I decided surgeons are better at going back to being the ones developing all the implants so I've been developing all the implants and by the end of next year we'll have every single device in spine surgery by any other company um available to spine surgeons I will continue to develop and Lead what is it that you need to do any kind of surgery need we have to control that the lessons to two I believe that we should control the Health Care System we should control the insurance company we control where we do the surgeries you should be in this room and this Hospital is yours that's what I believe and so we're starting the Les Institute and it's based on the kaisa permanent model what's interesting about a Kaa permanent model is I'm sure if I ask everyone in this room and I'm not going to do it who founded it would you say Henry Kaiser sounds like right right beer is his name well it was started by Dr Sydney Garfield he finishes uh training like some of you fellows will and he decided he's going to go on where the Colorado uh Aqueduct was being made because there are patients there and he started seeing these patients but there were all these accidents by all these workers and he was broke they couldn't afford to pay him and he met someone who actually knew something about insurance an engineer and said why don't you do a prepayment system and he actually ask every worker to put a nickel a day so now he has all the money he's an insurance company and he's a doctor now when someone gets an injury injury he's vested in what he delivers he wants to put overtreat well he's got to pay for that he wants to under treat then his reputation on the line he control the entire customer experience so that's what I want to do so as he did that Henry Kaiser during that uh period of time was in Oakland and then industrialist he was building ships he had people working for him he liked the idea what Dr garford was doing so he went to him and said you know I want to finance you to go bigger but why don't you come to Oakland and work for me that's what he did hence uh Oakland is still where Kaza Permanente is most dominant and now they're spreading they own about 39 Hospitals now last year they did about 150,000 s surgeries they gross $60 billion revenues and the system is f the control they don't own their products they don't have a digital platform or things certain things are missing but this is a case where a doctor started something that today and that was in 19 uh 33 today is the model I think for how the system should actually work less online is a digital platform we're starting in which you can go and get digit get uh uh all your information we did a study looking at all the patients that came in to see me in my clinic over 75% of those patient didn't have to be there I could give them an algorithm online that they could treat themselves I could connect all the providers MRI X-ray physical therapies every single one of them online they never have to come see me okay we have put very little if any in um effort into the patient nutrition before we take them to surgery okay I I don't hear I don't see anything on those reviews about the patient's condition before you do a big surgery on I see about how if we do the surgery along them be in the hospital well that's influenced by what you do so we want to invest just like bodybuilders do just like athletes do in treating the patients as someone who's going to undergo surgery and is going to have metabolic challenges we want to to have a whole line of of uh neutraceuticals to help us with our surgeons this is a company I acquired in 2014 with Tesla and Google the the driverless car the connected car there are too many accidents happening to patients because they were using Technologies inside the car that were not optimized for being used inside the car so once I saw this technology I jumped on it and acquired it we recently had um Samsung visitors from Korea because we have a proprietary display and they're really they're a large display company and they want to use displays everywhere so they've been looking at that with us I'm actually flying to uh sunale and pal Alto tomorrow I have meetings later on today around this technology so this is gamechanging as to how when you're inside a car if you look at the model X and Tesla they basically have a tablet that's going to be be um what you use everything's going to be voice activated the dashboard will no longer look like the current dashboard it's around safety for me and you know I don't just want to take care of patients who are injured I want to be part of preventing that and if I'm going to be part of preventing that I want to start a business around that and here is an oem model uh a lot of the uh car companies are talking to me about can we get an oem model which means that they're going to put it inside their car you're going to go in put your phone inside a slot the top is going to open up as well as an aftermarket model which you saw there every year this is the third year we have a healtech venture Network Conference last year 35 surgeons came there this year we like to see more surgeons there and that is a place where you can go and start to talk about entrepreneurship how are you going to change the system how are you going to get into business how what are you going to do and so I felt this was important I I got this idea when I went to CES three years ago and I saw you know over 100,000 people there and all this technology and I realized wow there are no surgeons here and so we want to do that so surgeons come come come there elas Society just held a meeting this past weekend with surgeons there in kilargo where we're talking about how do we organize surgeons around advocacy about controlling Our Lives you need a society that does that none of the societies today really has the ability to do that it's just too big too bureaucratic it's about going there getting a CME and there's lots of problems with that those societies were started at a different time you need a different society today and that's what this is so it's my last slide so in closing what I'm suggesting is if you look back to where we're coming from it's not just the techniques but our role with the patient and 100 years ago we didn't have a lot of this stuff between us and the delivery of the care we need to find a way to get back to that because if you don't maybe 10 years time we're all employed by the business and some of us will thrive in that environment some of us will be able to Advocate from that platform but most of us won't appreciate your time let me talk about this topic
2024-08-25 22:10
