The top 10 medical device states: Everything you need to know

top medical device states United States medtech

[Image from Unsplash]

California, Minnesota and Massachusetts dominate the U.S. medical device industry. But many other states also play a significant role in medtech.

From industry employment to venture capital investment to number of major headquarters, read on and discover how the medical device industry’s top states compare.

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Sources: Minnesota Department of Employment and Economic Development’s Compare Minnesota tool for industry employment and establishment numbers (2017) and medical device patent numbers (2015), PwC/CB Insights MoneyTree report for venture capital data (2017), Medical Design & Outsourcing’s Big 100 report (2018) for number of major, publicly traded medical device company headquarters, Forbes’ Best States for Business report (2018) for business friendliness ranking

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2 Minnesota medical device industry suppliers are expanding

Minnesota medical device industry suppliers

[Image courtesy of Google Maps]

Two Minnesota-based medical device industry suppliers – Windings and New Plastics Plus – are expanding and adding jobs, the state’s Department of Employment and Economic Development recently announced.

Get the full story on our sister site Medical Design & Outsourcing. 

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More information out about One Discovery Square near Mayo Clinic

One Discovery Square will be located at the corner of 4th Street SW and 2nd Avenue SW in Rochester, Minn. [Rendering courtesy of Mortenson]

A new website is providing more details — including a new anchor tenant —for One Discovery Square, the roughly 90,000-square-foot biotech research, collaboration and innovation space under construction near Mayo Clinic in Rochester, Minn.

Slated to open in April 2019, the four-story building is meant to be the first step in the creation of an innovation campus that will eventually encompass 2 million square feet. Discovery Square is part of the 20-year Destination Medical Center project, in which $585 million in state and local government infrastructure funds are expected to leverage about $5 billion of private investment in Rochester.

Get the full story on our sister site Medical Design & Outsourcing. 

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New Bos Sci acquisition raises question: Will the Lotus (valve) ever blossom?

Boston Scientific has long expected to be the third wheel to Medtronic and Edwards Lifesciences in the U.S. transcatheter aortic valve replacement (TAVR) marketplace.

It has sung the praises of it Lotus TAVR valve but the product line stands pulled from Europe because of device malfunctions. and has suffered delays in its regulatory pathway in the U.S. And now, while senior management of the company argue that Lotus valve’s introduction in the U.S. is still on track for mid 2018, a transaction announced last week may allow the company to introduce a wholly different TAVR device to the marketplace.

On Thursday, Marlborough, Massachusetts-based Boston Scientific shelled out $435 million in cash to purchase structural heart company Symetis. The Swiss company makes the Accurate and  Accurate neo/TF valve systems for patients suffering from severe and symptomatic aortic valve stenosis and those who have a high-risk of undergoing open-heart surgery.

“The steps we are taking reflect our commitment to being a leader in TAVI and structural heart technologies now and over the long-term, as we broaden our portfolio and pipeline to address the needs of our global health care providers and their patients,” said Ian Meredith, M.D., executive vice president and global chief medical officer, Boston Scientific in a news release. “The ACURATE family of valve products is strongly complementary to our cornerstone Lotus valve platform, and this compelling combination of technologies will allow us to provide interventional cardiologists and cardiac surgeons with multiple TAVI offerings for varying patient pathologies and anatomy.” [TAVR is termed transcatheter aortic valve implantation (TAVI) inEurope]

Some analysts did not fully buy the line on Lotus being the cornerstone TAVR product

“… with Lotus being delayed multiple times, taken off the market in Europe, and with BSX yet to launch all five sizes, one has to wonder if this is a backup plan and if Lotus may not be as ready to go as the company hopes,” wrote Sean Lavin, an analyst with BTIG, in a research note on Thursday. “While BSX paid a hefty multiple and this deal may indicate Lotus isn’t quite ready at this point, we see having a backup option as a positive in this multibillion dollar growth market.”

Boston Scientific paid 12 times the 2016 revenue of Symetis, which was $38.2 million last year.

Another analyst — Danielle Antalffy of Leerink Partners —said that the purchase will provide “air cover” for the six-plus months that the Lotus valve is expected to be off of the market. Still, most analysts viewed the deal positively.

The transcatheter aortic valve space is dominated by Medtronic and Edwards Lifesciences in the U.S. though in Europe the two heavyweights have smaller rivals. It is also a place that has seen numerous legal fights over patent infringement.

Edwards Lifesciences prevailed over Medtronic in 2014 in its long battle and the saga ended with the Irish medtech company agreeing to pay royalty payments of at least $750 million to Edwards Lifesciences.

Meanwhile Boston Scientific and Edwards are in the midst of their own legal battle over TAVR. In Nov. 2015, the Massachusetts company slapped a  lawsuit against Edwards in Germany related to its European patents pertaining to outer seals of transcatheter heart valves. Edwards countersued, alleging patent infringement by the Lotus valve.

On March 3, a U.K court ruled that the Lotus valve did infringe on one of Edwards’ patents surrounding its TAVR valves but not the other. It also noted that the Sapien 3 valve from Edwards infringes two of Boston Scientific’s patents for outer seals of transcatheter heart valves. A German patent court issued a similar ruling days later. Edwards has promised to appeal.

In other words, the ” TAVI space is fluid and litigious,” wrote Lavin in the research note and he concluded that “With all the various IP issues, manufacturing issues, doctor preference, and different valves offering different benefits, the reasons for buying Symetis could be multifactorial.”

Photo: Ian Fung Koo / EyeEm, Getty Images

Mayo Clinic’s CEO attempts a do-over

Dr. John Noseworthy (l), CEO of Mayo Clinic being interviewed by Dave Lee, morning host of WCCO radio in Minneapolis at the Economic Club of Minnesota.

The CEO of Mayo Clinic, castigated recently for telling staff to prioritize care for privately insured patients over those with government insurance, said Wednesday that his remarks had been taken out of context.

Dr. John Noseworthy, added that he regrets having used the word “prioritization” in the videotaped talk he gave to employees and first reported by the Star Tribune in Minneapolis.

“I can see why it may have led to a sense that there must be a policy change, but nothing was meant,” Noseworthy told reporters following an address to the Economic Club of Minnesota. “I regret the heartache that that has caused to many patients, because our Minnesota Medicaid and our contracted Medicare patients have exactly the same access to Mayo Clinic for serious and urgent medical issues.”

Noseworthy added that he meant Mayo employees should focus on measures that will help generate savings to cover the cost care for patients whose government-provided reimbursement falls short of private payers’ rates.

“There will be continuous pressure and reduced reimbursement for the work that we do,” Noseworthy told club members. “All the healthcare providers will have to find a way to improve quality and reduce their costs.”

Noseworthy implied that Mayo and other healthcare systems that produce good outcomes should be reimbursed better for their efforts.

“You would think that in healthcare, that if you get the diagnosis right and if you do better procedures with less morbidity and mortality, if you change people’s lives, if you reduce their medications, if you support them and so on, that there would be value added to that and the reimbursement might reflect that,” he said. “That’s not currently the case. We’re working with CMS on this.”

The agency should employ risk adjustment to properly reimburse health systems that care for patients who are most likely to have the most expensive hospitalization, Noseworthy told reporters separately. That analysis should include a consideration that the patient’s home hospital could not provide the level of care that a system like Mayo could, he added.

Mayo has also been working with the Trump administration on reforming the Veterans Administration health system. It has not been asked for advice on the American Health Care Act, but Noseworthy offered it anyway.

He expressed concern about President Trump’s plan to cut funding of the National Institutes of Health by 18.3 percent, or about $5.8 billion. Noseworthy said he spoke with President Trump, emphasizing the importance of stable research funding to produce new treatments, commercialize biomedical discoveries and foster medical research careers. Under President Barack Obama, NIH gave Mayo a $142 million grant to serve as the nation’s precision medicine biobank.

He also took said Trump’s immigration policies could harm medical research and patients’ health.

“I made the point to Reince Priebus that the nation needs a global talent pool for research and medicine and that sick patients from all over the world must be able to come to America and to the Mayo Clinic for their health,” Noseworthy recalled saying to Trump’s chief of staff.

Headquartered in Rochester, Minnesota, Mayo Clinic employs 64,000 in five states. It treats 1.3 million patients per year from 50 states and 140 countries, and invests more than $900 million in research and education annually, Noseworthy noted. 

Mayo has been making strategic investments in improving quality and reducing costs since 2009, according to Noseworthy. It weathered the recession and changes wrought by the Affordable Care Act, and continues to work with CMS to demonstrate how it has been cutting costs while providing care to patients with complex medical needs.

“It’s been a wild ride, a time of unprecedented change, but these challenges present wonderful opportunities for Mayo Clinic and its staff to make organizational adjustments and to innovate,” he said.

Photo: Economic Club

 

Old video surfaces showing Mayo Clinic CEO prioritizing patients with private insurance

Left to right, Mayo Clinic CEO John Noseworthy, VA Under Secretary for Health Dr. David J. Shulkin and former VA Secretary James B. Peake discuss telemedicine at ATA 2016.

Looks like Paul Ryan isn’t the only one being embarrassed by the surfacing of old videos.

Mayo Clinic CEO Dr. John Noseworthy is under fire after telling employees of the Rochester, Minnesota-based health system they should “prioritize” treating patients with commercial insurance over those with Medicare or Medicaid if their conditions are the same.

In a 2016 videotaped speech to employees, of which the Star Tribune obtained a transcript, Dr. Noseworthy said,

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We’re asking … if the patient has commercial insurance, or they’re Medicaid or Medicare patients and they’re equal, that we prioritize the commercial insured patients enough so … we can be financially strong at the end of the year to continue to advance, advance our mission.

Addressing employees, Dr. Noseworthy noted the Mayo Clinic had reached a
“tipping point” with a 3.7 percent increase in Medicaid patients. He cautioned that without balancing out the number of commercially insured patients, Mayo’s finances would suffer.

“If we don’t grow the commercially insured patients, we won’t have income at the end of the year to pay our staff, pay the pensions, and so on, so we’re looking for a really mild or modest change of a couple percentage points to shift that balance,” he said.

In 2016, Mayo Clinic, which sees more than 1.3 million patients annually, reported net operating income of $475 million. The same year, the health system also said it provided $629.7 million in care to individuals in need, including $83.3 million in charity care and $546.4 million that wasn’t covered by Medicaid or other programs that care for the uninsured or underinsured.

Last Friday, Dr. Noseworthy released a statement in response to the Star Tribune article:

Patient medical need will always be the primary factor in determining and setting an appointment. In an internal discussion I used the word ‘prioritized’ and I regret this has caused concerns that Mayo Clinic will not serve patients with government insurance. Nothing could be further from the truth. In fact, about half of the total services we provide are for patients who have government insurance, and we’re committed to serving those patients.

Changing demographics, aging of Americans and budgetary pressures at state and federal government pose challenges to the fiscal sustainability in healthcare today. While these discussions are uncomfortable, they are critical for us to be able to meet the needs of all our patients.”

Mayo Clinic confirmed to MedCity Dr. Noseworthy’s comment is the most up-to-date statement.

Minnesota Department of Human Services Commissioner Emily Piper told the Star Tribune the department will be examining whether Mayo violated patients’ rights or its Medicaid contracts with the state.

Dr. Noseworthy’s comments are especially ironic in a state that expanded the Medicaid program under the Affordable Care Act.

Photo: Twitter user Arizona Telemedicine 

Can a 3D printing network for VA hospitals realize ambitions for customized prosthetics?

Photo: Stratasys’ 3D technology

Stratasys has established a 3D printing lab network as part of an agreement with Center for Innovation at the Department of Veterans Affairs. The move signals the medtech company’s ambitions to move customized prosthetics into the mainstream of healthcare.

The agreement with the Center for Innovation at the Department of Veterans Affairs will make five hospitals part of the initial network in Puget Sound, San Antonio, Albuquerque, Orlando, and Boston. They’ll be equipped with 3D printers, materials, and training to support development of custom orthotics, prostheses, and anatomical models for personalized healthcare, a company release said. The equipment is fully integrated across hospitals, generating a network for building skills and knowledge-sharing across sites. The goal is to generate better patient outcomes, but also to improve surgical collaboration, and reduce costs.

Dr. Beth Ripley, a radiologist who is leading the VA initiative, said the network marked a milestone in how the VA develops patient treatments.

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“The technology not only enables 3D models of a patient’s unique anatomy for diagnosis and treatment, but can also be used to engineer personalized health solutions for veterans — including prostheses and assistive technologies,” Ripley said.

One reason why this network is so interesting is that it offers a way to improve upon the training required to make 3D printing a more integral part of hospitals. To that end, hospitals in the network will also share best practice guidance with each other. In addition to prosthetics, 3D printing can help hospitals develop organ models to prepare for complex procedures.

Last year, MedCity News noted analysts have predicted that 3D printing will be a major disruptive force in the healthcare industry before the end of the decade. According to a Gartner study published late last year, 10 percent of people in the developed world will be living with 3D-printed items on or in their bodies by 2019, and 3D printing will be a central tool in roughly one-third of surgical procedures involving prosthetic and implanted devices.

IndustryArc, the global market for 3D printing in healthcare, has projected that the market to be worth $1.2 billion by 2020.

Virtual rehab to gain ground in orthopedics as bundled payments take hold

If you believe that digital health and orthopedics seem mutually exclusive, then you are sadly out of step with the times.

At a panel presentation about alternative payment models and bundled care at the annual meeting of the American Academy of Orthopaedic Surgeons in San Diego on Tuesday, speakers clearly signaled that virtual therapy would be used more and more in the future. Especially now when bundled care programs like the CMS-mandated Comprehensive Care of Joint Replacement (CJR) is in place in 67 metropolitan statistical areas in the U.S.

That should be good news for digital health startups in the field who are eager to prove the clinical validity of their products, as well as help hospitals to lower the overall cost of joint replacement procedures.

Dr. Owen O’Neill, an orthopedic surgeon with Twin Cities Orthopedics, explained how the large ortho group practice with 116 providers implemented a commercial bundle in 2013 and lessons learned from that program, now in its fifth year.

“I can tell you that 97 percent of our bundles actually are financially positive,” O’Neill declared. “Three percent lose so overall financially they are very successful.”

Still, there are challenges. Under the fee-for-service model, physical therapy offered by Twin Cities Orthopedics was a profit center. Now as the group implemented the bundle, they looked at post-acute care as the area in which costs can be cut. And five years into the program, what was a profit center is now a cost center.

“Future directions, on the therapy side we are looking at things like virtual therapy,” O’Neill said.

Later, in response to a question from this reporter, Richard Iorio, an orthopedic surgeon with NYU Langone Medical Center, echoed O’Neill.

“We are actively moving toward online physical therapy programs and our goal is to eliminate physical therapy for hips, only use in knees when we need it …,” said Richard Iorio, a hip and knee surgeon at NYU Langone Medical Center.

Iorio did not mention which companies and online programs NYU uses but mentioned there are several out there.

Here are a few that MedCity has come across:

Reflexion Health
This San Diego-based virtual rehab company uses sensors, Microsoft Kinect, and the Vera avatar to guide joint replacement patients through their physical therapy at home. This daily exercise routine done in front of a TV reduces the need for patients to go to a physical therapist or can keep them moving in between sessions. The patient’s physical therapist is in charge at all times and can choose to bring him or her in at their discretion. The system also provides a technology solution for hospitals eager to lower their costs to treat joint replacement patients.

The Vera system is cleared by the FDA and also is able to facilitate the collection of patient-reported outcomes as is required for reimbursement.

Jintronix
This Montreal, Canada-based company also uses sensors and Kinect similar to Reflexion Health, as well as adopts elements of gaming to provide visual feedback for users to make physical therapy and occupational therapy exercises more interesting for patients. The company’s FDA-cleared platform targets patients recovering from stroke, hip replacement, hip fractures and knee replacement. It also helps track patients with multiple sclerosis and Parkinson’s disease.

Force Therapeutics
New York-based Force Therapeutics is a remote monitoring company whose digital health platform provides physical therapy to joint replacement patients. What’s more, patients have access to surgeon videos and instructions, and physicians can track patient progress in between appointments. The goal of Force Therapeutics, as with the above companies is to reduce readmission rates that can increase the cost of the joint replacement episode of care.