Low Back Pain and the global spine industry

by HealthPad

This is a series of seven Commentaries on Low Back Pain and the global spine industry. They are not meant to provide “answers”, but to stimulate strategic thought and discussion.
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3 years, 10 months ago

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Low back pain, spine surgery and market shifts

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Low back pain (LBP) and degenerative spinal disc disorders are leading age-related causes of disability throughout the world
Global populations continue to age, and incidence rates of LBP and degenerative disc disorders continue to increase
Surgery has become a common therapy for the conditions and their incidence rates have risen sharply over the past two decades
This has fuelled a global US$10bn spinal implant and devices market
Spine surgeries tend to be paid for by working age populations
In wealthy spine markets working age cohorts are shrinking
This suggests spending levels on spine surgery will be squeezed
The knock-on effects of this are likely to put pressure on spine companies to adapt their strategies and business models

Low back pain and the global spine industry

Low back pain, spine surgery and market shifts

Low back pain (LBP) is a common age-related health condition associated with degenerative spinal disorders, and recognised by the World Health Organisation (WHO) as one of the top ten global disease burdens. In most wealthy nations, low birth rates and relatively high life expectancy have resulted in the number of working age people shrinking and the number of retirees with sedentary lifestyles increasing. This has led to a high prevalence of LBP and age-related spinal disorders.

First-line clinical guidelines for LBP recommend non-surgical treatments and encourage physicians to be cautious about surgical solutions. Diagnosing LBP is challenging, and doctors constantly contend with treatment dilemmas. However, over the past three decades spine surgery has become a significant therapy for LBP.

A common procedure used to treat a range of degenerative disc disorders, which present as LBP, is spinal fusion. This is a neurosurgical or orthopaedic surgical technique to permanently connect two or more vertebrae in your spine so that they heal into a single, solid bone. The procedure can be performed at any level in the spine and prevents any movement between the fused vertebrae. The technique is designed to mimic the normal healing process of broken bones.

In this Commentary

This Commentary suggests that as global populations have aged, so the incidence rates of LBP and degenerative disc disorders have increased and become a leading cause of age-related disability throughout the world. Spine surgery has become a common therapy for the conditions. This has fuelled a global spinal implant and devices market. Spine surgeries tend to be paid for by working age populations, which are shrinking in the wealthy spine markets of the world. This suggests that spending levels on spine surgeries will be squeezed and this will put pressure on spine companies to transform their strategies and business models.

The global burden of LBP

A series of three research papers on LBP and its associated disabilities published in the March 2018 edition of The Lancet estimate that ~0.54bn people worldwide are living with LBP, which has risen by more than 50% since 1990, and is projected to increase even more as the world's population ages and as populations in lower- and middle-income countries move to urban centres and adopt more sedentary lifestyles.

The importance given to treating LBP is because of the significant burden it inflicts on individuals, healthcare systems and productivity. The Global Burden of Disease Study 2017 suggests that LBP accounts for some of the highest numbers of disability-adjusted life years (DALYs) worldwide [DALY is a measure of overall disease burden, expressed as the number of years lost due to ill-health, disability or early death].

According to the UK’s 2014 NHS National Pathfinder Study, LBP is responsible for the loss of 2,313 DALYs per 100,000. This is a substantially higher ratio than the remainder of musculoskeletal conditions (911), depression (704) and diabetes (337) combined, and accounts for 11% of the overall disability burden from all diseases in the UK, where the burden of LBP is on the increase both in absolute (~3.7%) and proportionate (~7 to 8.5%) terms. The increased prevalence of LBP creates added demand and escalating costs for NHS England, estimated to be >£12.3bn (US$17bn) per year.

A 2012 study published in The Spine Journal suggests that LBP accounts for >3% of all visits to A&E in the US and estimates that each year, “>2m episodes of LBP occur among an at risk population of over 1.48bn person-years for an incidence rate of 1.39 per 1,000 person-years”. Findings of a 2016 study suggest that, “US adults with LBP are socioeconomically disadvantaged, make frequent healthcare visits and are often covered by government-sponsored health insurance”. The US Bureau of the Census estimates that, each year, LBP costs Americans ~US$50bn in healthcare costs. If you add in lost wages and decreased productivity, this figure easily rises to >US$100bn.

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LBP and degenerative spinal disorders

In the video below Ranj Bhangoo, a consultant neurosurgeon at King’s College Hospital, London explains how LBP and degenerative disc disorders are overwhelmingly the result of normal wear and tear, which occur over time as you grow older. Years of constant use and absorbing daily shocks take their toll, which suggests that, sometime during your lifetime, you will suffer from LBP. In most cases, it is not your spinal vertebrae that experience the effects of the wear and tear, but the 23 cartilage-based structures (discs), which sit between your vertebrae. These are filled with a jelly-like substance and act as shock absorbers, help to hold your vertebrae together and facilitate slight mobility in your spine. As you age, your discs lose their jelly-like substance, start to crack, and begin to naturally degenerate. This is believed to manifest itself as LBP, which can radiate down your leg and cause a condition called sciatica.

Spine surgery

If you are over 50, suffer from LBP, live in the US, Europe, or Japan, and have medical insurance, it is likely that during your lifetime you will have surgery to reduce your pain following a period of a non-surgical therapy. Scientific evidence supports surgery in a select group of patients who have failed to respond to non-operative treatments over a minimum of six months. However, a significant percentage of spine operations fail to relieve back pain and between 10% and 46% of primary spine procedures require revision surgeries.

In the video below, Ranj Bhangoo describes the care taken by clinicians not to rush into surgery for LBP. When a patient presents with back pain, it is important to ask three questions: “Is the history of the pain compatible with a particular disc causing that pain? Does an examination suggest that a particular disc is causing the problem? Does a scan show that the disc you thought was the problem is the problem? If the answers ‘fit”, then there might be benefit in considering some treatment options, but not necessarily surgery. . . . . . Because 90% of us will get back pain at some point in our lives, 90% of us don’t need an operation”, says Bhangoo, whose opinion resonates with that of the Mayo Clinic: “Back surgery can help relieve some causes of back pain, but it’s rarely necessary,” and although “back pain is extremely common, surgery often fails to relieve it”.

Clinical dilemmas

Although first line clinical guidelines recommend non-surgical treatments for LBP and degenerative disc disorders and clinicians are cautious about possible treatment options, over the past three decades surgery has become a relatively common therapy for LBP and has fuelled a global spinal implant and devices market. The Lancet’s 2018 studies on LBP suggest that, “gaps between evidence and practice exist, with limited use of recommended first-line (non-surgical) treatments and inappropriately high use of surgery”.

However, the nature of evidence underpinning the use of non-surgical treatments for LBP does not help clinicians in their choice of therapies. A research paper, published in the March 2020 edition of the BMC Medical Journal, critically appraises the current evidence for non-surgical therapies for LBP and concludes that while, “pain management services may be cost effective for the management of low back pain the quality of evidence is variable”.

Spinal fusion

Spinal fusion is a common surgical therapy for a number of spinal disorders, some of which may present as LBP and include: (i) degenerative disc disease, which occurs when one or more of your discs between your vertebrae deteriorate and cause pain, (ii) spondylolisthesis, which occurs when one of your lower vertebrae slips forward onto the bone directly beneath it, (iii) spinal stenosis, a narrowing of the spaces within your spine, most often in your lower back and neck, which can put pressure on the nerves that travel through your spine, (iv) kyphosis, a spinal disorder in which an excessive outward curve of your spine results in an abnormal rounding of your upper back, and (v) scoliosis, which is a sideways curvature of your spine.

Despite being a common procedure, spinal fusion is a major surgery, which can be associated with significant morbidity and occasionally with mortality. In the video below Nick Thomas, a consultant neurosurgeon at King’s College Hospital, London, describes spinal fusion, which in certain circumstances, may be beneficial in improving pain.

Incidence rates of spinal fusion increasing

According to findings published in the March 2019 edition of the journal Spine, >2m spinal fusions were performed in the US in 2015. This represented an increase of 32% since 2004, with the largest increase (73%) among patients ≥65. Outcomes of spinal fusion procedures vary depending on the condition for which the surgery is performed. When performed for spinal deformities and spondylolisthesis, reported outcomes are generally favourable. However, the success rate of spinal fusion as a therapy for LBP and degenerative disc disorders is patchy.

Evolving techniques

Given these uncertainties, emphasis has been given to several evolving techniques such as interbody fusion and lumbar disc arthroplasty, which are more complex, technically demanding, and higher risk types of fusion. The former procedure involves removing your intervertebral disc and joining two or more vertebrae together using screws and interbody spine cages. These are hollow threaded cylindrical implants commonly constructed of polyetheretherketone (PEEK) and titanium, which have desirable biocompatibility and mechanical properties. Cages are filled with bone graft, and eventually become part of your spine.

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The latter procedure replaces a damaged spinal disc with an artificial one designed to support your vertebrae while preserving motion. These, and other hybrid techniques, are still relatively novel procedures despite promising near-term outcomes. Long-term studies demonstrating their superiority over traditional spinal fusion are required before they may be recommended to replace traditional fusion as the gold standard.

Further, recent scientific advances have allowed clinicians to explore innovative stem cell therapies in spinal fusion procedures in attempts to reduce morbidity and compensate for the limitations of autografts. However, results of research have not yet been translated into common practices to treat patients.

The incidence rates of spine surgery in the US

The US has the highest rate of spine surgeries in the world. In the 1980s rates increased by 55%. In the 1990s studies of spine surgery rates became more challenging because >20% of common spine procedures shifted to out-patient settings. Extrapolations from ambulatory surgical data suggest that throughout the 1990s, spine surgery rates continued to rise. The most rapid increase was for spinal fusion, which tripled during the decade and accounted for an increasing proportion of all spine procedures.

Since the 1990s, numerous studies have described the continued growth of spine surgery in the US, where today ~1.6m spine procedures are performed annually. Between 2004 and 2015, the volume of spinal fusions increased by 62%. During this 12-year period, aggregate hospital costs increased 177%, exceeding US$10bn in 2015 and averaging >US$50,000 per admission. A 1994 international comparative study found that, “the rate of back surgery in the US was at least 40% higher than in any other country and was more than five times that in England. Back surgery rates increased almost linearly with the per capita supply of orthopaedic and neurosurgeons in the country”.

The spinal implant and devices market

Over the past four decades, the high and increasing prevalence of spine surgeries has contributed to a high margin, profitable, global spinal implant and devices industry, comprised of ~400 companies but dominated by just four large American corporations: Medtronic, DePuy Synthes (Johnson & Johnson), NuVasive and Stryker. These four control ~70% of the market, which in 2019 was valued at ~US$10.3bn, projected to grow at a compound annual growth rate (CAGR) of ~5%, and reach ~US$14bn by 2025. The US market segment alone was valued in 2020 at ~US$7.5bn, growing at a CAGR of 5.3% and expected to reach ~US10bn by 2025.

These spine market numbers include revenue from implants, instruments, and surgical assistance systems (robotics and navigation) to treat a variety of conditions. The industry has benefitted from advances in spine surgery technologies, the launch of novel bone grafting products and the increasing adoption of minimally invasive spine surgery (MISS). However, spinal fusion devices are the second largest segment of spine products behind plates and screws.

As a possible consequence of the industry’s rapid growth and relatively high margins, many spine companies have come to rely on linear supply chains and developed “cosy labour-intensive relationships” between producers, clinicians, hospitals, and payors. However, the high cost of spine surgery, tightening regulations and more stringent reimbursement policies threaten this business model.

Good news for spine companies

We know that age-related LBP and degenerative spinal disorders are significantly correlated to the incidence rates of spine surgery. The good news for the spine market is that, “virtually every country in the world is experiencing growth in the number and proportion of older persons in their populations”, and global life expectancy is rising and is expected to reach 77 years by 2050, up from 70 in 2015. The number of people ≥65, who account for most incidence of spine surgeries, is expected to increase by >60% in the next decade, from just >0.6bn in 2015 to ~1bn by 2030. A study published in the March 2020 edition of the Journal of the American Medical Association (JAMA) suggests that between 1996 and 2016, Americans spent ~US$134bn on therapies for back pain, which is more than that spent on the combined treatments for diabetes and heart disease.

Bad news for spine companies

Working age populations in the US and other spine markets ‘pay’ for the surgeries of the large and growing cohorts of retirees with sedentary lifestyles and LBP. However, working aged populations in these regions are declining because of falling fertility rates and professional women delaying motherhood. This suggests, ceteris paribus, that for the foreseeable future, a shrinking pool of working-age people will be forced to support expensive spine surgeries for a vast and rapidly expanding cohort of aging retirees. Thus, it seems reasonable to suggest that the current trajectory of spending on spine surgeries in the major spine markets of the world is unsustainable, and increasingly, likely to exert downward fiscal pressure on spine companies.

Changing ecosystem

Such demographic trends are already exerting pressure on the spine market to deliver enhanced clinical outcomes at lower costs. For example, US reimbursement policies have moved away from a fee-for-service model towards a value-based model, which aims to utilize resources more efficiently by shifting the costs of over-treatment, revision surgeries and adverse clinical outcomes from payors to providers. Similar shifts are taking place in Europe and Japan. For example, in Europe fiscal pressure on healthcare systems has meant rationing and/or delaying elective spine surgeries. In Japan, more spine surgery costs are being shifted to employers and patients.

Population effectiveness

In wealthy spine markets decisions that used to be the sole preserve of doctors are increasingly being made by regulators, hospital administrators and other non-clinicians. This broader set of influencers have different objectives to doctors and prioritize cost effectiveness or even just costs. This is fuelling a shift away from individual patient outcomes towards a focus on the cost effectiveness of specific spine procedures on a given population. For example, the overall improvement within a cohort of patients ≥65 with LBP and degenerative disc disorders and a given level of spending by a hospital group on spinal fusions.

Innovations increasing in significance

Such shifts have encouraged innovations, which enhance outcomes and are positioned to change the standard of spine care. These include, minimally invasive spine surgery (MISS), robotics, computer assisted navigation, motion preserving technologies, and ortho-biologics, which will be discussed in future Commentaries. For now, let us finish by suggesting that such innovations could erode the competitiveness of traditional spine companies that are slow to change, and enhance the competitiveness of companies with the mindset, resources, and capabilities to invest in these evolving technologies.

Takeaways

Fiscal, technological, and demographic trends are driving the demand for competitively priced spinal implants and devices. Cost conscious US hospitals have consolidated to increase their buying power. Purchasing has become more centralized as hospital groups have leveraged their scale by standardizing processes and procedures across facilities. Providers have sharpened their focus on the cost effectiveness of spinal implants and devices and engaged in M&A activities to enhance their scale, R&D, and marketing. This has expanded the range of product offerings a single company supplies, but also it has increased market concentration, which advantages a few large dominant companies. The effect of these trends has yet to transform the strategies and business models of the overwhelming majority of traditional medium to small size spine companies, which will be needed for them to remain relevant in the future.

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If spine surgery fails to relieve low back pain why is it increasing?

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Surgery has become a common therapy for low back pain (LBP) and degenerative disc disorders, but it often fails to relieve pain
The incidence rates of spine surgery are high and increasing and contribute to a US$10bn global spinal implant and devices market
We attempt to explain a paradox: If spine surgery fails to relieve LBP why is it increasing?

If spine surgery fails to relieve low back pain why is it increasing?

Low back pain (LBP) is a common age-related condition. In 2017, its point prevalence was ~7.5% of the global population, or ~0.58bn people. The condition is associated with degenerative disc disorders and is a leading cause of most years lived with disability. Spinal fusion is a common neurosurgical or orthopaedic surgical treatment to correct degenerative spinal disorders that can present as LBP. The procedure joins small bones in your spine (vertebrae), and can be performed at any level in your spine. The basic idea is to fuse together two or more vertebrae so that they heal into a single, solid bone. Such procedures have fuelled a global spinal implant and devices industry valued at ~US$10bn, growing at a compound annual growth rate (CAGR) of ~5% and concentrated in wealthy nations; the US, the EU-27 and Japan. Spinal fusion accounts for the largest share of this market, and is projected to reach ~US$8.5bn by 2026, exhibiting a CAGR of ~3.6%.

LBP is challenging to diagnose, and effective treatment is elusive, but surgical therapies have become commonplace with a significant proportion failing to relieve pain. So, why is spine surgery increasing?

In this Commentary

Surgery may be able to fix the condition of degenerative disc disorders, but not eliminate pain. After spine surgery, a percentage of patients still experience pain, called ‘failed back syndrome’, which is characterized by a continuation of pain and an inability to return to normal activities. This has led to the paradox: If spine surgery fails to relieve LBP why is it increasing? We suggest 7 factors, acting in concert, help to explain this paradox, but stress that the evidence we present is circumstantial.

1. Clinical guidelines for LBP

Clinical practice guidelines are developed by multi-disciplinary teams of health professionals using an evidence-based approach, combining the best research available with expert consensus on best practice. In the UK, the National Institute for Health and Care Excellence. (NICE) is the body responsible for producing such guidelines. In the US the Institute of Medicine (IOM) first recommended the development of guidelines in 1990. Soon afterwards, several professional healthcare organizations such as the North American Spine Association (NASS) began producing their own guidelines for specific disorders. For this Commentary we use clinical guidelines provided by NICE and NASS.

As a first line therapy for LBP, NICE recommends a treatment package of, “exercise in all its forms, - e.g., stretching, strengthening, aerobics or yoga - advice and education, and if necessary, the inclusion of manual and psychological therapies”.

According to Spine Health, in the US therapies for LBP and degenerative disc disorders, “are primarily to reduce baseline pain and prevent pain flare-ups as much as possible. Most cases of degenerative disc pain are manageable through a combination of pain management methods, exercise/physical therapy, and lifestyle modifications”.

NASS 2020 guidelines for the ‘Diagnosis and Treatment of Low Back Pain’ pose 12 critical questions on the efficacy of the use of surgical treatment versus medical/interventional treatment, and conclude that it is unable to answer the questions because of the dearth of evidence. Here inter alia is a flavour of the questions posed by NASS:

Q In patients with LBP, does surgical treatment versus medical/interventional treatment alone decrease the duration of the pain, decrease the intensity of the pain, increase the functional outcomes of treatment, and improve the return-to-work rate?
Q In patients undergoing surgery for low back pain, which fusion technique [the question lists 5 common techniques] results in the best outcomes for the following: decrease the duration of pain, increase the functional outcomes of treatment, and improve the return-to-work rate?
Q In patients undergoing fusion surgery for low back pain, does the use of bone growth stimulators (versus fusion alone), decrease the duration of pain, increase the functional outcomes of treatment, and improve the return-to-work rate?
Q In patients undergoing fusion surgery for low back pain, does the use of BMP [bone morphogenetic proteins] (versus fusion alone), decrease the duration of pain, increase the functional outcomes of treatment, and improve the return-to-work rate?
Q In patients with LBP are there predictive factors, which determine the benefit of initial treatment with surgical intervention versus initial medical/interventional treatment?

NASS answers all 12 questions with the same statement: “A systematic review of the literature yielded no studies to adequately address this question”. This emphasises the absence of clinical evidence to confidently determine efficacious surgical therapies for LBP. NASS stresses that its guidelines are not intended to be viewed as a “standard of care”, but as “recommendations to assist in delivering optimum, efficacious treatment and functional recovery from nonspecific low back pain”.

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Low back pain, spine surgery and market shifts

2. Poor prognostic indicators for spinal surgery

This dearth of evidence makes therapy decisions challenging for clinicians. A study published in the 2018 edition of the Asian Spine Journal suggests that a proportion of the large and increasing spine fusion surgeries performed to reduce LBP and degenerative disc disorders fails because of weak prognostic indicators. Researchers stress that, “spine surgeons need to be well aware of the many poor prognostic indicators for spinal surgery”. The lack of high-quality evidence to support the use of spinal fusion for LPB fosters disagreement among physicians as to when spinal fusion should be performed.

In the video below Nick Thomas, a consultant neurosurgeon at King’s College Hospital, London, describes some of the challenges of poor prognostic indicators for LBP: “Dilemmas of managing low back pain arise because we (clinicians) have precious few pre-operative investigations that give us a clear idea as to whether a spinal fusion may or may not work. When an MRI is taken it can be very difficult to determine whether the degenerative discs one sees on the scan are normal age-related changes or whether they truly reflect a problem that might be generating the back pain”, says Thomas.

Such dilemmas in the management of LBP are not made easier by the fact that there are few studies, which compare spinal fusion to a placebo procedure. Most spine surgery research compares one fusion technique to another or to a form of non-surgical treatment. According to a study published in the March 2020 edition of The Lancet , “Over the past 10 years there has been increasing recognition of the importance of the placebo effect, particularly how strong this effect could be for a surgical procedure that involves high-intensity medical care, strong analgesia, and often physiotherapy”. Findings of recent placebo-controlled surgical trials for common vertebroplasty procedures [a procedure for stabilizing compression fractures in the spine], in which special cement is injected into a fractured vertebra, “have been shown to be largely ineffective, but continue to be in common use”. Further, randomised clinical studies, which are regarded as providing the highest-quality evidence, suggest that spinal fusion has little advantage over a well-structured rehabilitation programme for LBP.

A study published in the December 2018 edition of the Journal of Internal Medicine analysed data from 33 randomized controlled trials and other studies comparing spinal fusion to nonoperative solutions for LBP and degenerative spine conditions, and concluded that, “The overwhelming evidence simply doesn’t support spinal fusion (and its high costs and risks) for back pain and degenerative spine conditions over nonoperative solutions”. A 2019 WHO Bulletin entitled ‘Care for low back pain: can health systems deliver?’ suggests that, “many healthcare systems are not designed to support physical and psychological therapies for LBP”, and stresses that, “major international clinical guidelines now recognize that many people with low back pain require little or no formal treatment”.

3. Uncertainties of diagnosing LBP

Adding to poor prognostic indicators are the difficulties of diagnosing LBP. The aetiology of LBP is rarely precisely identified. Findings also suggest that a pathoanatomical diagnosis of LBP can only be made in ~5% to 7% of patients. LBP in patients where no such diagnosis is possible is often labelled, unscientifically, “chronic LBP”.

A 2016 study suggests that in ~80% to 95% of patients with LBP the cause cannot be determined despite the existence of sophisticated imaging techniques and a plethora of diagnostic tests. It seems reasonable to suggest that challenges associated with diagnosing LBP could provide tacit support for clinicians to continue carrying out surgical procedures they were trained to perform.

4. Rapidly ageing populations

A rapidly increasing global geriatric population is a significant factor driving the growth of the spinal fusion market. According to the United Nations, ~16% of the world’s population will be ≥65 by 2050. In North America and Europe, ~25% of their respective populations will be aged ≥65 by 2050. Common disorders of old age include LBP and degenerative disc disorders.

Age is significant because most spinal fusion procedures are performed on individuals ≥60 living in wealthy nations. This age cohort is the fastest-growing demographic in the principal spine markets of the US, Western Europe, and Japan. For example, the US has ~49m people (~15% of the population) who are aged ≥65. This cohort is projected to reach ~84m by 2050. The EU-27 has ~90m people (~20% of the population) ≥65. By 2050 the EU population ≥65 is expected to reach ~130m. The population structure of the UK is similar to that generally observed in the EU-27 with ~12m people aged ≥65, ~18.5% of the population, which is projected to double by 2050. Japan has the oldest population in the world with ~36m people (~29% of the population) who are ≥65. By 2025, Japan’s ≥65 population is expected to decrease to ~33m, but the percentage of the population ≥65 is projected to increase to ~32%. It seems reasonable to suggest that these vast and rapidly increasing older population cohorts are significant drivers of the growth of age-related LBP and the consequent increasing incidence rates of spine surgeries.

Global life expectancy has continued rising and is expected to reach 77 years by 2050, up from 70 in 2015. The number of people ≥65, who account for most spine surgeries, will climb by >60% in the next 15 years: from ~0.6bn in 2015 to ~1bn by 2030. The phenomena of aging and shrinking populations, means that every year, a shrinking pool of working-age people are forced to support an expanding pool of ageing patients with LBP and degenerative disc disorders. In the medium to long term such support seems unsustainable.

5. Obesity

The prevalence of LBP in individuals ≥65 who are also obese is significantly higher than in people who are of average weight. Not only are the populations in the principal spine markets ageing, but they are also experiencing rising incidence rates of obesity. According to the World Health Organisation, obesity throughout the world has nearly tripled since 1975. Today, there are ~2bn adults overweight, of those, ~650m are obese [body mass index (BMI) ≥30 kg/m²]. In England ~28% of adults are obese and a further 36% are overweight. In the US, 43% of people ≥60 is obese. From 2000 to 2018, the prevalence of obesity in the US increased from 31% to 42%, and the prevalence of extreme obesity [BMI ≥40 kg/m²] increased from 5% to 9%.

6. High costs of spine surgeries

Most spine surgeries in the US have been covered by health insurance operating a fee-for-service model. A future Commentary describes how this model is changing. Notwithstanding, fee-for-service has meant that healthcare providers have been able to charge significant amounts for their services and oblige insurance companies to reimburse them, while inflicting minimal costs on patients. Although there is a paucity of studies which analyse recent trends in spinal fusion volume, utilization, and reimbursements, Medicare [a US national health insurance programme] payment trends have seen a decreasing allocation of reimbursements for surgeons generally. Research published in the October 2020 edition of The Spine Journal suggests that this, “may be the effect of value-based cost reduction measures, especially for high-cost orthopaedic and spine surgeries”.

Each year in the US, >$90bn is spent on low-back pain alone and ~1.6m spinal surgeries are performed. The cost of a single-level spinal fusion in a less expensive region of the US is ~US$65,000 for Medicare or ~US$100,000 with private insurance. In more expensive areas, such as New York or Los Angeles, these costs can grow by 2 to 3 times. In remote regions, such as eastern Wyoming and Alaska, high costs of surgical procedures can be a function of the scarcity of specialist clinicians. Such high costs could be an incentive for physicians to perform surgery. Research supports this by suggesting that clinicians are more likely to recommend surgery, even though it is neither the optimum nor the only treatment option available.

7. Benign reimbursement policies

Historically, in the US, third-party payors have tended to reimburse spine surgery for LBP more than non-invasive therapies. Insurers have also tended to reimburse surgical services rather than patient outcomes, although this is changing. For decades, the overwhelming percentage of patients bore little responsibility for the cost of spine surgeries. However, a 2016 New York Times article reported that reimbursement policies for spine surgery were beginning to change, and suggested that, “financial disincentives accomplished something that scientific evidence alone didn’t”. The Times article drew on findings of research published in the June 2016 edition of the journal Spine, which argued that, “spinal fusion rates continued to soar in the US until 2012, shortly afterwards Blue Cross of North Carolina said it would no longer pay”. It seems reasonable to assume that benign reimbursement policies helped to drive the increase in spine surgeries. However, following the Blue Cross decision other insurers followed, and US payors started to move away from a fee-for-service model towards reimbursing “value”. This shift, which is expected to continue, has slowed the growth rate of common spine surgeries.

Takeaways

Over the past three decades, the escalating prevalence of LBP, the challenges of diagnosing the condition, rapidly ageing populations, rising incidence rates of obesity, high costs of spine surgeries, and benign reimbursement policies, have all contributed to what has become a global spinal implant and devices industry. Such conditions encouraged an ecosystem in which the incidence rates of spine surgeries have soared, while LBP has persisted in a significant percentage of patients following surgery. Although the spine market is beginning to transform itself by moving away from a fee-for-service model towards a value-based model, which aims at providing patients with the best outcomes at the lowest cost, do not underestimate the time it will take for this transformation to succeed. Indeed, it seems reasonable to suggest that, given the structure and nature of the industry, the paradox that this Commentary attempts to explain will persist, at least for the near to medium term.

Post Scriptum

Findings of a 2016 study in the peer reviewed Malaysian Orthopaedic Journal conclude that, “The spine, unfortunately, has been labelled as a profit centre and there are allegations of conflicts of interest in the relationship of doctors with the multi-billion-dollar spinal devices industry. The spine industry has a significant influence not only on research publications in peer review journals, but also on decisions made by doctors, which can have a detrimental effect on the welfare of the patient”.

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Minimally invasive spine surgery and computer assisted navigation systems

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computer assisted navigation systems

minimal access spinal surgery

MISS

spine surgery

Over the past 2 decades minimally invasive surgery and computer assisted navigation (CAN) systems have significantly changed spine surgery
Minimally invasive spine surgery (MISS) has become a significant subspeciality accounting for ~50% of all spine surgeries undertaken in the US
Together MISS and CAN systems promise enhanced precision, improved outcomes, and lower costs
CAN systems provide surgeons with improved visibility of the operating site, but emit hazardous radiation that can cause cancer
Spine surgery appears to be winning the challenge to increase the development of minimally invasive surgery while decreasing harmful radiation in the operating room
MISS is positioned to grow and increase its market share but faces some headwinds

- Low back pain and the global spine industry -

Minimally invasive spine surgery and computer assisted navigation systems

Minimally invasive spine surgery (MISS) requires only a small incision and uses specialized instruments and techniques that minimize cutting and results in minimal damage of body tissue. The technique serves the increasing prevalence of degenerative spinal disorders, attributed to sedentary lifestyles of aging populations, which have helped to drive the growth of a global spinal implants and devices market. In addition to the increased availability of biologics and customizable implants and the refinement of operative techniques, the development of MISS has been supported by advances in imaging and navigation technologies that make surgical targets virtual on a monitor to improve the accuracy and precision of surgical interventions. Today, there is a growing body of research demonstrating MISS’s advantages over the traditional open approach. However, computer assisted navigation (CAN) systems tend to emit harmful ionizing radiation that can cause cancer. Reducing radiation in the OR while improving the quality of image guidance is expected to fuel further growth of MISS.

In this Commentary

This Commentary focuses on minimally invasive spine surgery and computer assisted navigation systems. Two technologies, which have changed the landscape of modern spine surgery and offer potential benefits for both patients and surgeons. Has MISS reached its market saturation? If not, what will affect the speed and extent of its further adoption?

Minimally invasive and open spine surgery

Over the past 2 decades, MISS has become a significant subspeciality and currently accounts for ~50% of all spine surgeries undertaken in the US. It is positioned to increase its influence over the next decade but faces some headwinds.

As a general principle, it is preferable to intrude as little as possible when carrying out a surgical procedure to minimise damage to surrounding tissue and to speed up recovery time. Many spine procedures that once required invasive operations (open surgery) have been replaced with MISS techniques.

Open spine surgery typically involves relatively long incisions down the back to give the surgeon the best view of, and access to, the anatomy. During such procedures, it is sometimes necessary to cut through and move aside muscles and tendons to reach the affected area, which can cause damage to these tissues and prolong recovery.

In MISS the surgeon makes a small incision and then inserts a device called a tubular retractor, a stiff, tube-shaped tool that creates a tunnel to the problem area of the spine by gently pushing aside the muscle and soft tissue around the affected area. The surgeon can then put small tools through the tunnel to work on the spine and use a special microscope to view real-time X-ray images of the spine. This approach results in less damage to the muscles and soft tissues that surround the spine, which leads to a more expedited recovery.

MISS has gained popularity both with patients and clinicians and has become increasingly feasible for the management of a range of spinal disorders. Progress has been made in the development of a direct lateral approach [from the side] as well as improvements of tubular retractors. Common spine surgery treatments available through minimally invasive methods include degenerative disc disorders, herniated discs, lumbar spinal stenosis, spinal deformities such as scoliosis, spinal infections, spinal instability including spondylolisthesis, vertebral compression fractures, and spinal tumours. In 2020, MISS procedures accounted for ~50% of all spine surgeries performed in the US, which had increased from ~16% in 2012.

According to David Bell, a consultant neurosurgeon at King’s College Hospital, London, who specialises in complex spine surgery, MISS significantly improves the patient experience by, “reducing the size of the incision and the amount of tissue manipulation . . . It also minimises post-operative discomfort, cuts infection rates, lessens blood loss and reduces a patient’s recuperation time”. See video below.

The evidence

There is a growing body of research to support the benefits of MISS, which include: (i) reduced trauma to muscles and soft tissue, (ii) better cosmetic results from smaller incisions, (iii) less blood loss, (iv) reduced risk of infection, (v) faster recovery time and less rehabilitation, (vi) diminished reliance on pain medications, and (vii) reduced hospital stays. A further perceived benefit is the increasing range of MISS undertaken in outpatient settings. Such benefits are likely to fuel the refinement of surgical techniques based on patient outcomes, and lead to the growth of MISS.

However, not all studies are so positive about the benefits of MISS. A 2017 review of 17 randomized controlled trials, which compared MISS against open procedures for three common disorders, concluded that, “the evidence do not support MISS over open surgery for cervical or lumbar disc herniation”. The study suggests that there were some advantages for transforaminal lumbar interbody fusion (TLIF), [a procedure that melds the front and back sections of the spine through a posterior approach], but “at the cost of higher revision rates, higher readmission rates and more than twice the amount of intraoperative fluoroscopy”. [an imaging technique employed to improve intraoperative visualization of the operating field, which emits hazardous radiation]. The study concludes that, “Regardless of patient indication, MISS exposes the surgeon to significantly more radiation”.

Two papers published in the January 2020 edition of the Journal of Spine Surgery report on a global survey of 430 surgeons to assess the extent of MISS and the training surgeons receive. The response rate was significant at 67%. 33% of respondents were neurosurgeons, 55% orthopaedic surgeons and 12% were surgeons with other postgraduate training. One research paper concludes that, “endoscopic spinal surgery is now the most commonly performed MISS technique”, and the other suggests that, “very few MISS surgeons are fellowship trained but attend workshops and various meetings suggesting that many of them are self-thought. Orthopaedic surgeons were more likely to implement endoscopic spinal surgery into the routine clinical practice”.

A review of the state of MISS reported in the June 2019 edition of the Journal of Spine Surgery confirms MISS as a significant subspeciality, “evidenced by the large and constantly growing body of literature on this topic”, and driven by “significant advancements in imaging and navigation technologies, refinement of operative techniques, availability of biologics and customizable implants, and most importantly, evidence of feasibility, efficacy, safety and value, compared to traditional approaches as demonstrated by the current literature”.

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Unmistakably, over the past two decades, MISS has become increasingly feasible, efficient, and popular. An important question is, how fast is MISS advancing? There is a paucity of research, which addresses this question. However, a global survey of spine surgeons published in the January 2020 edition of the Journal of Spine Surgery provides some insights. Findings suggest there are regional variations in the acceptance and utilization of MISS. The study surveyed 586 spine surgeons in 5 major regions of the world, which yielded 292 usuable responses: a significant response rate of ~50%. 70% of spine surgeons in Asia and South America thought MISS was accepted into mainstream spinal surgery in their practice areas compared to 63% of spine surgeons in North America, 53% in Europe and 50% in Africa & the Middle East. The percentage of spine surgeons that reported using MISS was higher: Asia (97%), Europe and South America (89%), and Africa & the Middle East (88%). Surgeons in North America reported the lowest rate of MISS implementation globally.

Although innovations and techniques in MISS have continued to develop over the past decade, a significant percentage (~50% in the US) of surgeons are understood to use open surgical techniques. Reasons for this include: (i) lack of adequate surgeon training and experience, (ii) the steep learning curve needed for MISS, (iii) inadequate hospital resources and (iv) the patchiness of research on the benefits of MISS. It seems reasonable to suggest that such factors affect the adoption rate of MISS. But perhaps the most significant factor influencing the speed of its adoption will be the rate of development of robotic surgical systems. An understanding of the impact of these factors will help producers hone their strategies and business models.

Computer assisted navigation systems

A common therapy to correct spinal disorders is fusion, which melds together two or more vertebrae so that they heal into a single, solid bone. Spinal fusion surgeries use implants of biocompatible materials, such as titanium, as well as rods, plates, screws, and interbody cages and account for the largest segment of the global spine market.

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During spinal fusion procedures, pedicle screws are used for spinal fixation, stability, and fusion. The incorporation of such screws into spine surgery in the early 1960s was a significant advance because it offered stability and decreased rates of pseudarthrosis [failure of a fractured bone to heal] compared to previous methods. However, subsequent studies suggested that there was a percentage of pedicle screws inaccurately placed, which could harm adjacent structures and potentially have mechanical, neurological, and vascular consequences for patients.

Image guidance systems were a noteworthy development in spine surgery to reduce the morbidity associated with the mispositioning of pedicle screws and today such systems are used widely. Fluoroscopy, an early guidance method, provided real-time X-ray imaging for guiding interventional procedures, which resulted in more accurate placement of screws, but such systems emitted hazardous ionizing radiation that surgeons, patients, and OR staff were subjected to. Any spine surgery that is visualized with fluoroscopy can involve 10 to 12X higher amounts of radiation from the use of X-rays compared to non-surgical procedures. Compared to a hip surgeon, a spine surgeon can experience 50X more harmful emissions over the course of a professional career and this has been linked to the development of cancers. Reducing radiation exposure is an important challenge.

Guided systems and reduced radiation

Newer intraoperative navigation modalities have been found to reduce radiation exposure significantly compared to traditional fluoroscopic guided percutaneous surgical techniques, and have become an important addition in spine surgery. Real-time image guidance, along with continuous computation and scan integration by the navigation system, allows a surgeon to visualize a comprehensive 3D picture of the operating site. Intraoperative computerized tomography (CT) scans [the use of X-rays and a computer to create detailed images of the operating site], together with infrared and other optical guidance technologies have substantially increased the accuracy and precision of spine surgeons to place pedicle screws.

One such enhanced guidance system is ultralow radiation imaging (ULRI) coupled with image enhancement and instrument tracking (IE/IT). This is a new image modifier that allows a computer to show real-time movement of an instrument as it is adjusted, mimicking live fluoroscopy, but without continuous radiation production. Recent research suggests that ULRI-IE/IT systems, “can dramatically reduce radiation output and the number of images acquired and time needed to perform fluoroscopic procedures”.

There are numerous FDA approved advanced CAN systems but let us briefly describe some popular ones. The Airo Mobile Intraoperative CT-based Spinal Navigation system was approved by the FDA in 2013, and developed by Brainlab, a privately held German MedTech company headquartered in Munich. The technology is one of the pioneers of advanced surgical navigation platforms and has many similarities to other CAN systems. It uses a mobile circular scanner attached to the operating table for 360° imaging, and a scanning stereotactic camera, which uses a set of three coordinates for instrument registration. Research published in the July 2018 edition of the Journal of Neurosurgery suggests that the Airo “mobile CT scanner reduced the rate of screw repositioning, which enhanced patient safety and diminished radiation exposure for patients, but it did not improve overall accuracy compared to that of a mobile 3D platform”.

Another popular system is Medtronic’s Stealth Station Spine Surgery Imaging and Surgical Navigation with O-arm, a portable imaging device that fits over the surgical table to take images of the operating field. This uses similar technology to Brainlab’s Airo, but opens at 90° to allow for mobilization around the patient. A third system is produced by Ziehm Imaging, another German company, which specializes in the development and manufacture of mobile C-arms [imaging devices that can be used flexibly in operating rooms]. In 2015, the company received FDA approval for the Ziehm Vision FD Vario 3D with NaviPort Integration. This is an intuitive technology, which obtains images via a 190° rotation with a C-arm around the patient and provides surgeons with, “crystal-clear and distortion-free 3D images for maximum intraoperative visualization of anatomical structures”. However, if its reference clamps are moved after the initial registration process, repeat CT scanning is required to re-register the clamps. Stryker’s SpineMask Tracker and SpineMap Software system overcome this problem by gluing its reference trackers to patients.

With the widespread use of CAN systems in spine surgery there is an increasing number of studies, which demonstrate the advantages of such technologies. For example, two large meta-analyses suggest that CAN systems significantly increase the accuracy of pedicle screw placement compared to freehand placement. Research also suggests that patients who undergo CAN pedicle screw placement have lower complication rates than those who undergo freehand placement.

Notwithstanding, findings of a global survey conducted in 2013 and reported in the September 2019 edition of The Spine Journal suggest that ~78% of surgeons still use two-dimensional fluoroscopy during spine surgery. Despite the improved accuracy and reduced radiation provided by advanced computer-assisted spine navigation systems. This could be associated with costs, prolonged operative times, and their cumbersome nature.

Machine-vision image guided surgery system

7D Surgical, a Toronto based company that develops advanced optical technologies, has sought to overcome challenges inherent in traditional CAN systems by developing a machine-vision image guided surgery platform, [FLASH™]. The technology employs a satellite-based global positioning system (GPS), to create a 3D image of a patient’s anatomy, and uses visible light coupled with machine-vision algorithms that eliminate exposure to intraoperative radiation. Other benefits of 7D’s system include its rapid set up time and its minimal workflow disturbance. The fact that its navigation camera is integrated into the surgical light, eliminates the need to stop surgery and position supplemental surgical equipment, thereby allowing for continuous access to the surgical field. Further, and unique to FLASH™, is the fact that its reference clamp can be repositioned, and images re-registered within ~20 seconds. This facilitates seamless clinical applicability and reverses many of the drawbacks of preceding navigation systems. In May 2021, SeaSpine, a Nasdaq traded spine company, announced the acquisition of 7D in a deal valued at US$110m. In July 2021 SeaSpine received FDA approval of 7D’s advanced guidance system for MISS.

Takeaways

Over the past two decades, MISS has had a significant impact and established itself as a subspeciality throughout the world. Although it is difficult to calculate, it appears that ~50% of spine surgeries could still be open procedures. This suggests that strategic questions facing producers include whether MISS will expand further, and if so, at what speed. This Commentary suggests some factors, which are likely to impede the adoption rate of MISS. However, perhaps the most significant challenge to MISS is not the prevalence of open surgery, but the rapid rise and adoption of robotic surgical systems. Research published in the January 2020 edition of the Journal of the American Medical Association on the trends in the adoption of robotic surgery concludes, “Hospitals that launched robotic surgery programs had a broad and immediate increase in the use of robotic surgery, which was associated with a decrease in traditional laparoscopic minimally invasive surgery”. Robotic surgical systems in spine surgery is the subject of a forthcoming Commentary.

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Robotic surgical spine systems, China, and machine learning

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commentary

interpretability challenge

robotic surgery

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Robotic surgical systems have gained a small but significant share of the surgical spine market and assist surgeons to improve accuracy and patient outcomes
The industry has been dominated by Western corporations and benefited from advancing technologies, ageing populations with age related spine disorders and the need to reduce costs
High costs, training and the cumbersome nature of the systems are frequently cited as obstacles likely to slow the adoption of surgical robotic systems
Over the next decade expect competition from China’s emerging robotic surgery industry
Systems are expected to become smarter and more autonomous
Greater autonomy raises an “interpretability challenge” not broached in surgical studies, but likely to be a more significant obstacle to the development and adoption of robotic surgical systems

- Low back pain and the global spine industry -

Robotic surgical spine systems, China, and machine learning

Over the past two decades many spine companies have pursued a strategy of incremental innovations of their existing product portfolios to launch ‘new’ offerings at a higher price point. This has served the spine industry well by providing producers with relatively stable revenues and protection from a sudden loss of market share, such as that experienced by pharma companies when their patents expire. The disadvantage of such a tactic is that it encourages a mindset focussed on profit margins and revenue growth rather than on strategic issues and enhancing value for patients. In today’s increasingly value orientated healthcare ecosystem driven by high and escalating healthcare costs, more stringent reimbursement policies, tougher regulations, advancing technologies and increased competition, it seems reasonable to suggest that incremental fixes to existing products are unlikely to return spine companies to the high margin profitable growth businesses, which they once were.

Today, healthcare systems are looking for more disruptive technologies to provide them with cost effective, high quality, affordable surgical spine solutions for the vast and increasing aging populations with degenerative disc disorders. This has created an opportunity for robotic surgical systems to gain a small (<10% of lumbar procedures), but significant share of the spine market. Robot-assisted spine surgery, which aims to automate repetitive tasks and improve the quality of patient outcomes, is being championed by some healthcare professionals as a potential paradigm altering technological advancement. Systematic reviews and meta-analyses have found that clinical benefits of robotic surgery, compared to laparoscopic surgery, include less blood loss and shorter hospital stays. Compared to conventional open surgery, evidence indicates robotic surgery holds potential for smaller incisions with minimal scarring and faster recovery.
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Since the widespread dissemination of minimally invasive surgical modalities, a critical mass of physicians appears to have enthusiastically embraced robotic-assisted surgery. A cohort study published in the January 2020 edition of the Journal of the American Medical Association used clinical registry data from the US state of Michigan from 1^st January 2012, through 30^th June 2018; comprised of ~169, 000 patients across 73 hospitals. The average patient age was ~55 and ~54% of the cohort were women. The study found that the use of robotic systems for general surgical procedures increased from ~2% in 2012 to 15% in 2018 and concludes that the introduction of robotic surgical systems has been, “associated with a decrease in traditional laparoscopic minimally invasive surgery”. According to ResearchandMarkets, a leading market research firm, over the next decade, the global surgical robotics market is projected to grow at a compound annual growth rate (CAGR) of ~10% and reach ~US$17bn by 2031 from ~US$5.5bn in 2020.

In this Commentary

This Commentary describes how robotic surgical systems have been enthusiastically embraced by a growing number of spine surgeons but draws attention to studies that suggest obstacles to the widespread adoption of surgical robots. These include costs, training, set up time and their somewhat cumbersome nature in the OR. We describe a significant tailwind and a countervailing headwind for the further adoption of robotic surgical systems. The tailwind is the significant investments being made by China in the development of robotic surgical systems. The headwind is an ethical issue associated with the increased use of AI and machine learning algorithms, which are likely to make surgical robots more autonomous. Before discussing these issues, the Commentary describes: (i) robotic surgical systems and spine surgery, (ii) two categories of robotic surgical technologies, (iii) the principal robot systems that are currently in clinical use, (iv) the critical nature of training, (v) China’s increased investment in the development and commercialization of surgical robots, (vi) the ‘interpretability challenge’, which could become a more significant obstacle for the further adoption and increased automation of robotic surgical systems in certain regions of the world.

Robotic surgical systems and spine surgery

The term, “robot” implies a machine capable of carrying out a complex series of actions automatically. Robotic surgical systems have not reached this stage of development and are machines designed to interact and assist humans to make surgery safer and more efficient.

As of 2020, the application of robotics in spine surgery has been predominantly associated with pedicle screw insertion for spinal fixation [pedicle screws are a fixation technique routinely used in spinal surgery to stabilize vertebrae]. Most studies on robot-assisted spine surgery have investigated lumbar or lumbosacral vertebrae while studies on the use of robotics for placing screws in the cervical and thoracic vertebrae are limited.

Robotic systems in spine surgery are commonly used for posterior instrumentation with pedicle screws and rods, which are procedures that require repetitive movements during lengthy operations, as well as delicate manipulation of vital structures in restricted surgical areas. Traditional manual techniques of placing screws are dependent on the experience of the surgeon and can result in breaching the pedicle. Misplaced pedicle screws not only create complications for patients but also can result in a risk of malpractice litigation for surgeons. Safety and precision concerns have fuelled the demand for the use of robotic systems in pedicle screw implantation to increase consistency, reduce inaccuracy, minimize radiation exposure, and decrease operative time. Findings of a research study published in the May 2017 edition of Neurosurgery, reported accuracy of pedicle screw placement using robotic systems as high as ~94% to 98%.

The spine market appears to be at an inflection point with an increasing number of companies developing and launching robotic surgical systems. It seems reasonable to suggest therefore that the increased investment in this emerging area is likely to impact the spinal implant and devices market over the next decade.

Two categories of surgical robots

There are two categories of surgical robots used in spine surgery: (i) master-slave systems and (ii) trajectory assistance robots. A prominent, commercially available example of the former is the da Vinci surgical system, developed by Intuitive Surgical, a Nasdaq traded pioneer in robotic surgery founded in 1995. An example of the latter is the Mazor X Stealth™, which since 2018, has been owned by Medtronic, a giant American MedTech corporation and one of 4 dominant players that control >70% of the global spine market.

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The da Vinci

The da Vinci robot is a master-slave system and the most popular surgical robot in the world. It is designed to facilitate minimally invasive surgeries and is controlled by a surgeon while seated at ‘master’ console. In 2000, it received FDA-approval for general laparoscopic procedures. Despite costing ~US$2m and having high operating costs, there is an installed base of ~6000 da Vinci units worldwide. The system is used by surgeons in all 50 US states and in ~67 countries. In 2020, >8.5m surgical procedures had been performed using the system.

In 2014, the da Vinci system first entered the Chinese market and by 2019, 112 robots had been installed and used in >110,000 surgeries. However, China’s high import tax on foreign machinery limits the broader use of da Vinci in the country. Currently, the prevalence of robotic surgery in China is much lower than in some Western countries, as well as Japan and South Korea. However, this is could change when China launches its first surgical robotic system, which is expected to be the Micro Hand S. This is a system based on origami-like panels, and features a foldable, compact design that allows for a wide range of possible movements by the instruments in the limited space of an OR.

A user’s opinion

In the video below, Christopher Anderson, the lead robotic surgeon at St George’s University Hospital, London, describes the da Vinci robot and says, “The term ‘robotics’ is a misnomer because it implies that the instrument has its own intelligence, but it’s not the case”. Surgeons control the “master” system while seated at an ergonomic console viewing high-definition 3D images of the surgical site. The system’s “slave” aspect consists of 3 to 4 interactive arms, which hold surgical tools, and one controlling a camera. With Intuitive’s proprietary “endo wrist” technology, the robotic arms replicate what a surgeon’s arm can do by scaling the surgeon’s hand movements in relation to the robotic arm movements and filtering out tremors. The system’s ergonomic design means greater comfort for the operating surgeon, reducing the problem of fatigue. Patient benefits include smaller incisions, less pain, and faster recovery.

Some surgeon-operators of the da Vinci suggest that the lack of haptic feedback and the inability of the surgeon to be stationed at the operating table are limitations of the system. Not according to Anderson, however, “The system is completely and intuitively controlled by the surgeon”, and the “3D vision inside the visor of the console provides a depth perception, which enables the surgeon to know how far to manoeuvre inside the tissues”.

The da Vinci has been used for numerous spine procedures including anterior lumbar interbody fusions (ALIF) [a common spine fusion from the back], resections of thoracolumbar neurofibromas and paraspinal schwannomas [rare usually non-malignant spine tumours]. Compared with traditional open surgery and other robotic systems, more recent versions of the da Vinci provide enhanced visualization and increased magnification of the surgical field, which facilitates careful dissection of fine structures and improved patient outcomes.

The Mazor

The Mazor is a trajectory assisted surgical system and the first robot to be widely used in both open and minimally invasive spine surgery (MISS) for a variety of clinical indications. The system positions surgical instruments according to a preoperative virtual plan and provides superior intraoperative navigation compared to traditional guidance systems. It is designed to position an effector [a gripper] over a target for a precise stereotactic insertion procedure. In some Mazor systems, the target insertion site and trajectory can be virtually planned on preoperative images, such as X-rays, CT scans and MRIs. Such planning allows surgeons to safely visualize surgical trajectories, avoid critical regions and adjust if necessary. The positioning of surgical instruments mounted at the end of the system’s robotic arm is registered to a preoperative image and automatically adjusted by a control computer, which instructs and directs the robotic arm based on its interpretation of intraoperative imaging.

An early version of the Mazor called the SpineAssist, which was developed by Mazor Robotics, an Israeli company, received FDA approval in 2004 to assist with placement of pedicle screws and since then, it has had several upgrades. In 2016 the company launched the MazorX, which was enhanced by combining proprietary software to plan surgical procedures, a robotic arm to precisely guide the placement of implants during complicated spine surgery, and real-time 3D imaging feedback to ensure procedures proceed as planned. This increased accuracy and improved patient outcomes compared to traditional spine surgery. In 2018, Medtronic acquired Mazor Robotics for US$1.7bn and soon afterwards, launched the Mazor X Stealth™ with even more advanced capabilities. Mazor systems have been installed in ~15 countries and used in >24,000 spine surgeries.

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Other robotic surgical spine systems

In addition to the da Vinci and the Mazor, there are further robotic systems currently used in spine surgery. These include: (i) Zimmer Biomet’s ROSA^® Spine, which is like the Mazor and received FDA approval in 2016, (ii) Brainlab’s Cirq®, launched in 2015, (iii) Globus Medical’s ExcelsiusGPS® launched in 2017, (iv) Stryker’s Mako, also launched in 2017, and (v) TINAVI Spine’s TiRobot®, launched in 2016.

Syed Aftab (pictured above), consultant spinal surgeon and robotic surgical lead at the Royal London Hospital, Barts Health NHS Trust, a major London teaching hospital, uses Brainlab’s Cirq®, a trajectory assistance system in combination with a 3D C-arm. “We were the first surgical unit in the UK to have a robotic spinal system and the first to perform robotic spinal surgery”, says Aftab, who teaches spine and orthopaedic surgery at London’s Queen Mary University, and is also the spinal surgery lead at Complex Spine London. He adds “We chose Brainlab’s Cirq® because it has a small footprint, it’s lightweight, easy to transport from one OR to another and is also cost effective compared to other systems”.

According to Aftab, Brainlab’s second generation system is a significant improvement on its first, “it has a true automatic feature, which finds and holds my screw trajectories based on my preoperative plan. I primarily use the system for pedicle screw insertion. It has applications in the lumbar spine but has significant advantages in the upper cervical spine where the surrounding at risk structures are more challenging and the bony anatomy is less forgiving. The combination of navigation and robotics substantially increases accuracy, reduces the time of surgery, and frequently takes away the need for large dissections to create visual exposure of the operating field. Also, I’ve found the robotic system extremely useful where anatomical localisation is difficult due to previous surgery or altered anatomy, such as in degeneration or ankylosing spondylitis [a form of arthritis in which the spine becomes inflamed and fused]”.

Aftab and his colleagues have found the outcomes of their robotic surgeries “very positive” from both patient and health professional perspectives. “Robotic surgical systems definitely add value to pedicle screw placements compared to traditional open or minimally invasive spine surgery. However, it seems important to point out that it is not altogether clear whether the benefits are derived from the robotic system or from the embedded advanced navigation”, says Aftab.

According to a study published in the February 2017 edition of Neurosurgery, the ExelsiusGPS®, “has the potential to revolutionize the field of robotic-assisted spinal surgery. With automated accuracy, reproducible outcomes, efficient integration, automatic patient registration, constrained motion for safety and automatic compensation for patient movement”. The system is like the Mazor and ROSA^® Spine but appears to address many of the drawbacks of previous robotic-assisted systems. In November 2019 DePuy Synthes announced a joint venture with TIVANI, to market the TiRobot® for spine surgery in China.

In May 2021 South Korean MedTech company Curexo received FDA approval for its Cuvis-spine robot, which guides pedicle screw insertion and uses a robotic arm to make surgery safer and more efficient. The company expects to market Cuvis in Europe and the US. NuVasive, a US MedTech company, expects its robotic platform, Pulse, to receive FDA approval in summer 2021 for all spinal surgeries, not just complex or low-acuity cases. When launched, it will combine neuromonitoring, surgical planning, rod bending, radiation reduction, imaging, and navigation functions and is expected to compete with other robotic spine offerings on the market, including Medtronic's Mazor X, Globus Medical's ExcelsiusGPS® and Zimmer Biomet's Rosa Spine®.

Headwinds

Compared to traditional fluoroscopic-assisted freehand approaches to pedicle screw placement and other spinal procedures, robotic systems may be more accurate, more efficient, and safer. However, it is worth mentioning that there is a range of robots being used in spine procedures and they do not all guarantee the same accuracy and precision. Errors arise because of their complexity relative to fluoroscopically guided surgery and some existing user interface software can be cumbersome and unintuitive, which suggests that there is a steep learning curve for health professionals wishing to introduce robotic surgical systems into their practice. Studies show that the accuracy of pedicle screw placement increases, and operating time decreases with the number of robotic surgical procedures performed by a clinical team. Thus, there is a learning curve and training is critical; not only for surgeons, but also for other health professionals in the OR.

It is generally accepted that the cost of training and the time it takes could slow the further adoption of robots in spine surgery. Surgical education is just beginning to include robotics as part of standard training for surgeons. However, there are several different robotic systems in clinics and learning curves can vary according to the version of the robotic system used, so standardization of surgical training becomes a challenge, and surgical expertise plays a significant role in obtaining a fair comparison between robotic-assisted and traditional surgery.

Added to the increased training burden associated with robotic techniques are of the high costs of systems. To reduce the financial burden on hospitals, some producers provide innovative financing terms and bundle a robotic system with a range of implants and other devices and services. These issues together with current patchiness of evidence on the efficacy of robotic surgical spine systems are barriers to t the widespread utilization and development of surgical robots.

Tailwinds: China and robotic surgical systems

Over the past two decades Western corporations have dominated the robotic surgical spine market. US, UK, and EU have differed in their approaches to the development and adoption of robotic surgical systems. The US has tended to focus on technical challenges such as tactile sensing and navigating confined spaces, while the UK has been more market driven and focused on the cost effectiveness and regulatory standards of systems. The EU, on the other hand, has attempted to address both R&D and translational issues by promoting academic and industrial collaborations. In recent years, Chinese initiatives, which are more closely aligned with the EU approach, have been gaining momentum and are positioned to impact the spine market in the next decade.

China is challenged by its vast and rapidly ageing population and a shortage of surgical expertise. By 2050 China’s senior citizen population (those ≥60) is projected to grow to >30% of the total population, up from ~12% today, and this is expected to substantially increase the percentage of its retirees relative to workers, which will significantly increase the burden on its healthcare providers.

Beijing believes these challenges can be helped by robotic surgical systems. In addition to acquiring >100 da Vinci systems, China has made the production of domestic robotic surgical systems part of its 2006 15-year plan for science and technology. In 2011 the Chinese government reaffirmed this commitment by including the increased use of robotics in healthcare in its 12^th 5-year plan, and over the past decade, Beijing has made substantial R&D investments in the development of robotic surgical systems.

In 2019, China opened the Medical Robotics Institute in Shanghai Jiao Tong University, which is the nation’s first academic establishment dedicated to the study of medical robotics, and appointed Guang-Zhong Yang as its founding dean. Professor Yang formerly was the founding director of the Hamlyn Centre for Robotic Surgery at Imperial College London. According to Yang, medical robotics have been growing in China for the past two decades driven by, “The clinical utilization of robotics; increased funding levels driven by national planning needs; and advances in engineering in areas such as precision mechatronics, medical imaging, artificial intelligence and new materials for making robots”.

China’s robotic surgical industry started later than its foreign peers, but the nation now has ~100 medical robot companies. The Chinese sector is in a transitional phase from R&D and clinical trials to commercialization and mass production. The nation’s medical robot market is expected to be worth ~US$2.5bn by 2026. China’s growing interests in surgical robotic systems is expected to significantly increase competition and accelerate technological developments.

Tinavi Medical Technologies

A notable example of a Chinese enterprise specialising in surgical robotic systems is Tinavi Medical Technologies, a Beijing-based company, backed by China’s Ministry of Science, the Beijing Government, and the Chinese Academy of Science and listed on China’s National Equities Exchange Quotation [an over-the-counter system for trading the shares of a public limited company]. In 2016, Tinavi received fast-tracked approval from the central government to sell the TiRobot®, the first robot-assisted surgical product made in China. As of December 2020, the system had assisted in 10,000 surgical procedures. With its unique algorithm for calculating pedicle screw trajectories, the TiRobot® can precisely move to a planned position and provide surgeons accurate and stable trajectories for implants and pedicle screws; it is expected to make high volume spine surgeries more accurate and standardize less common and more complex spine surgeries. Research published in the January 2021 edition of the Journal of Orthopaedic Surgery and Research, suggests that, “iRobot-assisted vertebroplasty can reduce surgery-related trauma, post-operative complications, and patients’ and operators’ exposure to radiation”.

University-industry-research ecosystem

The production of surgical robotic systems in China is advantaged by the nation’s deep and functional university-industry-research cooperation. It is relatively common in China for technology companies to have strategic alliances with university research institutes with years of accumulated technical expertise. With respect to robotic surgical systems that require application of medical theories and technologies, mechanical engineering, robotics, optics, computer science and AI, such joint ventures bring together interdisciplinary teams with years of multidisciplinary research experience in bio-machine interfaces, integrating bionic techniques, and investigating new materials technologies.

An example of such an interdisciplinary joint venture is a project focussed on making robotic surgery systems more capable of replicating the tactile feel and sensation a surgeon experiences during more invasive traditional procedures. The project is led by researchers at the 3^rd Xiangya Hospital of Central South University, in collaboration with Tianjin and Beihang Universities.

Based on their combined experiences of minimally invasive surgery, researchers have built and analysed classified databases on the physical characteristics of patients, on the interaction between human soft tissues and surgical instruments, and on operator-instrument interfaces. This combined knowledge has been used to optimize the design of surgical robotic systems to make them more effective, more intuitive, and safer than exiting robots.

The project team is planning for a multi-centred, prospective, randomised trial to collect more data associated with the system’s safety and effectiveness, which is expected to accelerate the manufacture of their surgical robot. Further, the project team leaders at the 3^rd Xiangya Hospital, plan to build a national training institute to educate surgeons in the use of the system, and this is expected to contribute to the robot’s broader use. There are also plans to establish a clinical information centre, by collecting data on the use of the system, and employ AI and machine learning algorithms to analyse them. This is expected to optimize performance, inform upgrades, and make the robot globally competitive.

The “interpretability challenge”

Currently, robotic surgical systems neither make cognitive decisions nor execute autonomous tasks but assist clinicians to enhance pre-operative planning, improve intra-operative guidance, provide superior interpretations of complex in vivo environments, and increases the accuracy, safety, and efficiency of surgical procedures. It seems reasonable to suggest that robotic surgical systems will become more autonomous as they increase their AI and machine learning capabilities, which facilitate instantaneous assessment of complex surgical settings that trigger immediate therapeutic actions, that the surgeon using the robot might not fully understand. This situation can be further complicated by the complexity of algorithms that depend on neural networks comprised of thousands of artificial neurons. This further blurs the reasoning behind specific interpretations and consequent actions of robotic systems. In many such cases the developers of machine learning algorithms cannot explain why an AI driven system arrived at a specific interpretation or a suggested action.

This failure to understand is referred to as an “interpretability challenge”, or more commonly, the “black-box” problem; a concept not broached in surgical studies but discussed in medical ethics.

Reactions from market stakeholders to such a challenge are likely to be mixed. For example, some healthcare providers might welcome more autonomous robotic surgical systems to compensate for shortages of experienced surgeons, others might perceive autonomous robots as having the potential to “level the playing field” among surgeons and contribute to a generally accepted level of surgical services across diverse regions, while other providers might be against surgeons abdicating responsibility to a robot. Whatever the reaction of providers, as robotic surgical systems advance, they are likely to become more complex and less interpretable by the surgeons using them. Increasingly, stakeholders will be required to “place their trust in the system”. Gaining this trust from surgeons, patients and providers could be a more significant obstacle to the further adoption of robotic surgical systems than the obstacles commonly referenced such as costs, scarcity of resources, lack of training, and inconclusive clinical studies.

To counter the “black box” syndrome is “explainable AI” (EAI), an AI solution designed to explain its intent, reasoning and decision-making processes in a manner that can be understood by humans. Until EAI becomes an integral part of robotic surgical systems it seems reasonable to assume that such could face some difficulties progressing beyond their assisted surgical status.

Takeaways

Currently, robotic spine surgery is in its infancy and most of the objective evidence available regarding its benefits draws from the use of robots in a shared-control model to assist with accurately placing of pedicle screws with minimal tissue damage. The performance to-date of robotic surgical systems suggest a new era for spine surgery by their capacity to refine surgical dexterity and augment human capabilities. The current limitations of surgical robots are likely to provide incentives for innovation, which holds out the prospect of developing more advanced robots that further enhance spine surgery outcomes while reducing costs. This is likely to provide a significant boost to well-resourced spine companies developing robotic systems and put pressure on others to change their business models dominated by incremental fixes to their existing product offerings. But keep an eye on Chinese endeavours in robotic surgical systems and the responses to the interpretability challenge in different regions of the world.

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Will a rear mirror mindset slow the adoption of technologies poised to influence the spine market?

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Artificial discs, 3D printing, orthobiologics, and the Internet of Medical Things (IoMT) are technologies positioned to increase their impact on the spine market
The speed of their adoption should not be overestimated given the nature and structure of the industry
The challenge for spine companies is not too few employees who understand the traditional spine market but too many

-Low back pain and the global spine industry-

Will a rear mirror mindset slow the adoption of technologies poised to influence the spine market?

This Commentary describes four evolving medical technologies: motion preserving spinal techniques, 3D printing, orthobiologics, and the Internet of Medical Things (IoMT). All are poised to contribute to improving the therapeutic pathways of people with low back pain (LBP) and age-related spine disorders, which cause significant disability and are common reasons for people to visit primary care doctors and A&E departments. At what speed will these technologies be adopted by the spine market?

An optimistic view suggests that by 2025, all four technologies will be commonly used in spine care. More people will be focussed on aging well, they will be better informed about their health and taking proactive rather than reactive approaches to common spine disorders and treatments. Developed nations and some emerging economies will have extended their public healthcare systems and larger percentages of their populations will have access to quality spine care. Digital inclusion will have spread, and the acceptance of scientific and technological advances will have accelerated. The spine market will have increased its use of AI, behavioural sciences, genomics, and screening and healthcare risks will have been substantially reduced. Spine companies would have shifted from being predominantly manufacturers of hardware to more solutions orientated patient-centric enterprises focused on maintaining the health and wellbeing of an ageing population in an healthcare ecosystem designed around people rather than places.

A less optimistic view is that by 2025, the spinal implant and devices market will continue to be conflicted between increasing patient demands and the level of evidence for various spine care options. This will perpetuate the current system, which leaves clinicians obligated to provide treatments based on insufficient information. Entering this environment will be an increasing supply of spine surgeons trained to deliver interventional care, and economic incentives for them to perform surgical procedures with increasing frequency. Due to decreasing fertility rates and increasing life expectancy, there will be >0.8bn people ≥65 years: ~11% of the global population, (~19% and ~21% respectively of the populations of the US and Europe). The result will be a spine care ecosystem that: (i) continues to emphasize the performance of narrowly focused and insufficiently studied procedures to address what are complex biopsychosocial pain problems and (ii) eschews technologies outside a relatively narrow surgical bandwidth. This will support a business-as-usual mindset among spine companies, and in turn, slow the adoption rates of technologies described in this Commentary.

Motion preserving spinal techniques

Spinal fusion, which permanently connects two or more vertebrae in your spine and eliminates motion between them, is one of the most performed spinal procedures indicated for a wide range of spinal conditions. Given that people are ageing and living longer after spinal surgery, there is the beginnings of a movement away from the gold standard spinal fusion-based solutions towards motion preserving surgery. This aims to maintain normal, or near normal, motion to prevent adverse outcomes commonly seen with conventional spinal fusion, most notably the development of adjacent-level degenerative disc disorders.

Several different surgical approaches have been developed to preserve motion in the lumbar spine, including total disc replacement (spinal arthroplasty), partial disc (nucleus) replacement, interspinous spacers, dynamic stabilization devices, and total facet replacement devices. The design of artificial (manufactured) discs varies, but all aim to stabilize the spine and eliminate pain while conserving natural motion of the functional spinal unit, which is essential for mobility, walking, reaching, and having the stamina to participate in activities for periods of time.

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Motion preserving technologies were introduced ~2 decades ago. In 2004, DePuy’s Charité Artificial Disc received FDA approval for the treatment of LBP due to a damaged or worn out lumbar intervertebral disc. Since then, more than a decade passed before AESCULAP’s activL^® Artificial Disc received FDA approval in 2015. Findings of a 2016 clinical study suggest that, “the activL^® Artificial Disc results in improved mechanical and clinical outcomes versus an earlier-generation of artificial discs and compares favorably to lumbar fusion”. In 2019, RTI Surgical, an implant company, acquired Paradigm Spine, a privately held company, for US$300m. Paradigm manufactures Coflex, an FDA approved spine motion preserving solution.

Some artificial discs adapt traditional titanium implants with specialized coatings and advanced surfacing to allow for a smoother press-fit fixation and future bone ingrowth, which is expected to keep the new discs more securely located. Despite growing enthusiasm for motion preserving spinal techniques, their utilization rates have remained relatively low. This may be attributable to size constraints of available total disc replacements (TDR), stringent regulatory indications for their use, difficult instrumentation, mixed clinical outcomes, and reimbursement challenges. Despite these headwinds, the artificial disc market surpassed US$1.6bn in 2019, and its compound annual growth rate (CAGR) is expected to be >18% for the next five years. The US represents >50% share of this market.

The wider adoption and growth of motion preserving techniques for the treatment of low back pain (LBP) and degenerative disc disorders will depend on the long-term outcomes assessed by controlled randomized clinical studies of spinal arthroplasties. As studies demonstrating the efficacy for TDRs increase and the procedures become more established, incidence rates of traditional spinal fusions are likely to slow.

3D printing

3D printing, also known as “additive manufacturing”, facilitates the conversion of computer-added anatomical images into physical components using special printers, which add successive layers of material. The technology is believed to be particularly suited to the complex anatomy and the delicate nature of spine surgery and is used for spinal implants, pre-operative surgical planning, intra-operative guidance, customised and off-the-shelf devices as well as patient–clinician communications, and medical education. Reports suggest that 3D printing enhances procedural accuracy, decreases surgical time and improves patient outcomes.

Over the past decade, 3D printed spinal implants have developed and grown as access to the technology improved. Today, 3D printed spinal implants are being created from materials such as porous titanium, which has the benefit of being strong and durable as well as achieving faster bone growth and osseointegration than conventional PEEK (polyetheretherketone) implants. Increasingly, 3D printing is being used in the pre-operative planning stage for spine surgery by providing a full-scale, stereoscopic understanding of the pathology, which allows for more detailed planning and simulation of a procedure. It is also used to create intra-operative guides for placing pedicle screws using patient-specific data, which lowers risks. [Pedicle screws are fixations routinely used in spinal surgery to stabilize vertebrae. The placing of the screws is dependent on the experience of the surgeon and can result in a breach of the pedicle and cause complications and injury].

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Another advantage of 3D printing for spinal surgery is its ability to manufacture customised, patient-specific devices for difficult to treat cases. With traditional off-the-shelf implants, patients run an increased risk of a suboptimal fit into the reconstructive site. Although research on 3D patient specific implants is limited, they are expected to have enhanced durability due to a more even load distribution and superior osseointegration. The cases of 3D printed customised implants performed to-date have been limited to anatomically challenging pathologies where an individualized solution to restore patient-specific anatomy is a key prognostic factor.

3D printing is also used to manufacture off-the-shelf implants. Spine companies, such as 4Web Medical, and Stryker, are beginning to extend their use of 3D printing techniques to optimise the properties of implants, including the ability to mimic the interconnected structure of cancellous bone [a meshwork of spongy tissue of mature adult bone typically found at the core of vertebral bones in the spine]. In the future, it is expected that 3D printing techniques will be used to incorporate more innovative features into spinal implants, such as porous matrices where density, pore diameter and mechanical properties can differ in different regions of the implant.

As 3D printing evolves and becomes cheaper, faster, and more accurate, its use in spine surgery is likely to become routine in a range of procedures. The production of 3D orthopaedic and medical implants is estimated to grow at a CAGR of 29% between now and 2026, of which spinal fusion devices are expected to be one of the fastest-growing segments. Stryker, which has novel spinal implants comprised of highly porous titanium, has invested €200m (~US$226m) in its Instrument Innovation Centre and the Amagine Institute, in Cork, Ireland, which are focussed on the development of 3D printed spine products.

However, currently, there are only a handful of vendors that design and manufacture medical grade 3D printers. Spine companies are constrained by the limited availability of such machines and typically are not privy to certain proprietary aspects of the manufacturing process. In addition, 3D printing is more costly and time consuming than conventional manufacturing processes. The FDA has issued guidance for “patient specific” 3D implants, but as of July 2021, it has not issued a standardized framework for 3D spinal implants to be approved. This regulatory challenge can make surgeons and hospitals hesitant to use the technology. A study of 3D printed surgical implants published in the July 2019 edition of The Lancet suggests that, “Comprehensive and efficient interactions between medical engineers and physicians are essential to establish well designed frameworks to navigate the logistical and regulatory aspects of 3D printing to ensure the safety and legal validity of patient-specific treatments”. As the body of research continues to grow, larger scale studies and longer-term follow ups will enhance our knowledge of the effect 3D printing has in spinal surgery.

Orthobiologics

Compared to the introduction of innovative spine surgical techniques such as computer assisted navigation (CAN), minimally invasive spine surgery (MISS) and surgical robotic systems, the cadence for new spinal implant materials has been relatively slow to impact the market: titanium and cobalt chromium remain common choices for spinal implants.

One reason for this is because the biology of spinal fusion is a complex process that mimics bone healing after a fracture. Techniques used to enhance spinal fusion include stabilization with metallic or polymeric implants, grafting with bone products and more recently augmenting grafts with a variety of biologic agents. With autologous [patient’s own tissue], and allogenic [donor tissue] bone grafts, tissue is often manipulated to remove mineral content and/or maintain a cell population to enhance fusion.

Although autologous bone grafts remain the gold standard, concerns about their failure to achieve fusion has prompted the evaluation of an increasing range of new biologic materials. These new materials are synthetic, and are generally composed of ceramic or bioactive glass. Recombinant growth factors [proteins derived from a combination of materials that stimulate cell growth], most commonly bone morphogenic protein 2, are sometimes added because they are potent stimulators of bone formation. However, morphogenic protein 2 can be associated with enhanced risks.

A growing number of mid-size and smaller biotech companies engage in the production of orthobiologics. Thus, there is a growing number of new biologic agents specifically developed for spinal implants coming onto the market. These tend to be more durable and bio-friendly than traditional implants and have the potential to improve recovery times for patients and minimize soft tissue disruption.

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Two examples of new biologic materials used in spine surgery for improving bone growth and fighting infection are Xiphos™-ZFUZE™, and molybdenum rhenium (MoRe).

The former is a new interbody fusion system designed to provide an alternative to the more commonly used titanium and PEEK spinal implants. It’s developed by Difusion Technologies, a biotech company based in Austin, Texas, and received a 510(K) FDA clearance in November 2019. Xiphos™ is the first spinal implant created from ZFUZE™; which is a new biomaterial specifically engineered to interact with the human immune system so that it does not attack the spinal implant as a foreign body. Such foreign body responses can lead to long-term chronic inflammation and a significant number of patient complications. Studies suggest that ZFUZE™ is superior to nano-surfaced titanium and conventional PEEK materials.

The latter, MoRe, is a new biomaterial for spine surgery, which received FDA approval in 2019, and is produced by MiRus Bio, a US biotech company founded in 2016. MoRe is compatible with MRI and CT scans, and is also corrosion resistant. The material is reported to be two to three times stronger, and more fatigue resistant, than either titanium or cobalt chromium. This is significant for the spine market where rods used in surgical constructs can break. It is also reported that MoRe is >2X more hydrophilic [a strong affinity to water and mixes well] than titanium. Spinal implants that contain MoRe have double the osseointegrative characteristics of 3D printed titanium spinal implants. MiRus has ~14, 510(K) clearances from the FDA and >150 patents in its portfolio and is well positioned to address increasing unmet needs in this segment of the spinal implant market.

With an increasing array of biologic interbody graft materials available for use in spine surgery, maintaining a comprehensive understanding of their characteristics, benefits and drawbacks is becoming increasingly important. As these new materials enter the market, traditional titanium or cobalt chromium implants are likely to be surpassed, and as they become more diverse and more widely used, their characteristics, cost effectiveness and efficacy in specific patient populations will need to be better understood and communicated to assist hospitals and surgeons to select materials that are optimal for their patients.

Despite the desirability of such a register, it is unlikely that it will materialise in the medium term given security issues, the large and escalating number of producers, patients, hospitals, and surgeons, which are dispersed and have little or no incentive to provide implant information to a central register. Further, independent studies on orthobiologics tend to be relatively weak and patchy. Thus, it seems reasonable to suggest that, in the near to medium term, purchasing parties will continue to be influenced by producers’ marketing endeavours.

Internet of Medical Things

Most spine companies are manufacturers, which are focussed on hospitals, surgeons, and operating rooms. However, hospitals, looking to reduce their expenditures on implants and devices, have formed purchasing syndicates, concentrated purchasing to a narrow range of trusted offerings and changed their reimbursement policies.

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Vast and escalating healthcare costs, ageing populations, advancing medical science and technologies, more stringent reimbursement policies, and stricter regulations conspire to nudge conventional spine companies to shift away from their traditional production processes and move towards solutions-based, patient-centric endeavours. The Internet of Medical Things (IoMT) can help to facilitate this. Some spine companies have reinvented themselves to become more solutions-orientated and patient-centric. However, for such new business models to be sustainable, companies will need to make data management a core, rather than a peripheral, capability.

A typical treatment journey for a patient with LBP and degenerative disc disorders includes: the presentation of symptoms, diagnostic tests, treatments, monitoring and rehabilitation. This usually involves interacting with several healthcare functions and a range of equipment and devices, including MRI and CT scanners, blood pressure and heart monitors, surgical instruments, implants, and software applications as well as a range of healthcare professionals, systems, and services. Advances in wireless technology, the miniaturization of medical electronics, and the increased power of computing create opportunities for the IoMT to connect all these disaggregated entities and retrieve from them a range of relevant clinical and scientific data, which can be used to improve a patient’s therapeutic pathway.

The IoMT is an amalgamation of sensors, software, data management, and networking technologies and is driven by: (i) the general availability of affordable broadband Internet, (ii) almost ubiquitous smartphone penetration, (iii) increases in computer processing power, (iv) enhanced networking capabilities, (v) miniaturization, especially of computer chips and cameras, (vi) the digitization of data, (vii) growth of big data, Cloud-based repositories, and (viii) advances in AI, machine learning (ML), and data mining. This provides the potential for common spinal implants and devices to become ‘intelligent’ by having the added capability to retrieve, analyse and communicate clinical and scientific information. The IoMT can assist spine companies to streamline their clinical operations and workflow management, enhance patient outcomes, lower costs and transform their role and relationship within the evolving value-based healthcare ecosystem.

Indicative of this is Canary Medical, a privately held Canadian company founded in 2013, which uses IoMT to enable remote monitoring of patients’ implants. Starting with artificial knees, Canary’s technologies provide real-time feedback on how surgical implants and devices are working by generating self-reports on patient activity, recovery, and treatment failures, without the need for physician intervention and dependence upon patient compliance. Canary applies machine learning algorithms to the data it collects to identify patterns that could help clincians catch problems, such as infections or loosening of the joints before they worsen.

The COVID-19 crisis forced physicians to use more remote services. It seems reasonable to assume that over the next five years this will increase, remote monitoring will become the norm, and the value of data generated by spinal implants and devices will be significantly enhanced. The growing importance of data, which are derived from implants and medical devices, is evidenced by the fact that the FDA has embraced AI and has several ongoing projects designed to develop and update regulatory frameworks specific to it. A research paper published in the January 2021 edition of The Lancet Digital Health demonstrates the increasing significance of data and algorithms for MedTech’s. In 2015, the FDA approved nine AI-machine learning (ML) based medical devices and algorithms. The number increased to 12 in 2016, 32 in 2017, 67 in 2018, and a further 77 in 2019. In Q1,2020, 24 AI/ML-based medical devices were approved by the FDA.

Canary is unusual as the spine industry generally has been relatively slow to embrace the IoMT. This partly could be associated with security and privacy issues. However, according to a July 2018 report from Deloitte, a consulting firm, there are, “more than 500,000 medical technologies currently available, which all share a common purpose: having a beneficial impact on people’s health and quality of life” and all are currently accessible to collect, analyse and transmit healthcare data. The increasing significance of data also is stressed in another research report by Deloitte on the European MedTech industry. Findings suggest that AI technologies, which, “can be used across the entire patient journey”, save European healthcare systems “~€200bn (~US$238bn) each year” and “have the potential to assist European health systems in responding to major challenges they face”.

A February 2020 Fortune Insights Report, valued the global IoMT market at ~US$19bn, and projected it to reach ~US$142bn by 2026, exhibiting a CAGR of ~29%. Given the growing significance of the IoMT to the spine market, in the medium term, data could become more valuable than actual spinal implants and devices. Spine companies need to consider developing new business models to take advantage of this and develop a deeper understanding of the needs of patients and demonstrate how their offerings improve patients’ therapeutic journeys.

Takeaways

Because the risks associated with spine surgery are non-trivial and reducing complications is critical, over the next decade we are likely to see the introduction and adoption of technologies, which have the potential to improve precision, enhance patient outcomes and reduce costs. These, together with technologies described in previous Commentaries, provide companies with an opportunity to influence how the spine market will play out over the next decade. However, the speed that the technologies described in this Commentary will be adopted by the spine market should not be overestimated given the deep-rooted interests and established practices of the industry. To take advantage of these developing technologies spine companies will need to stay ahead of consumer-focussed tech-savvy companies, like Canary, which are entering the market and: (i) increase their digital expertise, (ii) improve their patient-centric interactions, (iii) enhance their data management capabilities, and (iv) extend their digital infrastructures. Over the next 5 years, a challenge for spine companies will not be a lack of executives who understand traditional spine markets, but an excess of them. Executives who know the traditional spinal implant and devices industry well, are likely to keep looking in their rear-view mirrors and assuming that what made money in the past will make money in the future.

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Digitalization: the reinvention of spine companies’ supply chains and controlling the inventory-to-revenue ratio

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Neurosurgery

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Traditional spine companies’ supply chains are linear, labour intensive and siloed and their inventory-to-revenue ratios tend to be high
To remain relevant in an environment where the physical and digital worlds are converging company leaders will need to improve their supply chains
Digitalization can help achieve this but requires embracing data management techniques
As a response to the COVID-19 crisis some MedTech’s introduced and extended their digital strategies
Have they done enough to remain relevant in a rapidly evolving ecosystem?

- Low back pain and the global spine industry -

Digitalization: the reinvention of spine companies’ supply chains and controlling the inventory-to-revenue ratio

In 2020, spine companies, like most MedTechs, absorbed shocks of the COVID-19 crisis by digitizing aspects of their supply chains, which consists of a wide range of transactions and constitute a significant part of a company’s’ total value creation. Industry observers are asking: Will enterprises extend their digitalization strategies and emerge stronger after the impact of the pandemic, or will they reduce their digital activities and emerge weaker?

Market changes

Even before the COVID-19 pandemic, the days of business-as-usual for spine companies were numbered as technologies advanced, regulations became more stringent, populations aged, healthcare systems struggled with unsustainable costs of surgeries for common age-related degenerative disc disorders, and payors tightened their reimbursement policies. In the US, which is the biggest market for spinal implants and devices, an increasing percentage of people have become covered by Medicare and Medicaid [state and federal government healthcare programmes], which reimburse providers at a fraction of private healthcare insurance levels. These changes encouraged independent hospitals in the US to join purchasing syndicates, clinicians to give up private practice and become salaried employees of hospitals, and private payors to shift away from a fee-for-service provision towards a value-based reimbursement approach focussed on improving patient outcomes and lowering costs. This shift encouraged policies to keep patients out of hospitals and increased the utilization of outpatient settings and other measures expected to improve outcomes and generate shared savings.

The structural headwinds described here have not abated and are likely to intensify over the next five years. To prosper in this evolving ecosystem, companies will need to devise and enhance solutions that bring enhanced clinical benefits to patients and economic rewards to the system. Tried and tested and widely used digital strategies can help to improve supply chains. However, while these structural changes have been progressing, spine market supply chains have tended to remain linear and labour-intensive and are now becoming significant obstacles to change, while producing infrastructures with unsustainable costs.

In the Commentary

This Commentary suggests that, over the next five years, market forces will oblige spine companies to pivot away from their inefficient supply chains and start developing supply networks, predicated upon digital strategies that add value to patients and reduce costs. Such systems, employ common digital applications that are used extensively in other industries to ensure the right products and services are delivered to the right place, at the right time, at the lowest cost. This would constitute a “first step” in a bigger digital transformation of the spine market, which will be necessary to create new levels of productivity, growth, and sustainability. We suggest that the reluctance of some MedTech’s to transition from inefficient supply chains to efficient ones could be explained by a significant proportion of their C suite members not acquiring a familiarity with digital systems until much later in their careers when they were adults. The Commentary uses two concepts: ‘digitization’ and ‘digitalization’. The former is a process to convert various physical signals into digital formats and the latter leverages digitized information to improve business processes.

Digitizing supply chains

Over the past two decades the cost of digital technologies has plummeted while their power and capabilities have substantially increased. This has enabled business leaders to combine technologies associated with information and operations and empowered them to create value in new and different ways. Improved processing capabilities now augment human thinking to analyse more data more quickly, and then act upon the outcomes. Such changes have ushered in the new digital era for MedTech’s.

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However, the spine market has been slow, compared to other industries, to adopt digital supply networks. The process of developing such strategies to drive productivity, while absorbing the shock of a pandemic has not been easy as it meant installing new technologies under pressure. However, the COVID-19 crisis created an incentive to reconfigure operations. The companies that did this have an opportunity to develop an omnichannel [multichannel approach to sales and marketing] dedicated to enhancing engagements with healthcare professionals and improving the overall quality of care, patient outcomes, revenues, productivity, employee satisfaction, and talent attraction and retention. But this will mean companies establishing virtual options as a core competence and reinventing the way they engage with stakeholders to provide a seamless experience across digital, remote, and in-person channels.

Neo Medical and value-based spine care

A firm that has employed digital strategies to streamline part of its supply chain to enhance value and gain a competitive edge is Neo Medical, a privately held Swiss company founded in 2013 by two former Stryker employees. The company has developed a universal value-based surgical spine platform to provide patients with high quality outcomes at relatively low costs. Neo’s approach is predicated upon its ability to reduce an instrument set, comprised of >200 screw sizes to 14, and use it in a novel approach to thoracolumbar fusion. [The thoracolumbar spine is the area between your stiff thoracic cage and your mobile lumbar spine].

Neo refers to its solution as a ‘controlled fixation’, which is beginning to have an impact in markets across the EU-27, Asia-Pacific (APAC) and more recently, the US. The approach is designed to facilitate an anatomically neutral, balanced, and stable spine load bearing to achieve a more functional fusion. It is reported that the platform: (i) enables clinicians to limit stress overload on a patient’s spine and thereby reduces the risk of screws loosening and hardware failing, (ii) limits infections, (iii) removes the need for re-sterilization, (iv) declutters the operating room, (v) reduces revision rates and (vi) cuts costs.Equally important are Neo’s digital strategies to provide an easier and more efficient experience for patients, surgeons, and hospitals.

Findings of a study, published in the December 2020 edition of Interdisciplinary Neurosurgery, suggest that Neo Medical’s value proposition saves costs by: (i) reducing supply chain processing and logistical expenses, (ii) decreasing rates of contaminated instruments, (iii) minimizing operating room delays and (iv) potentially lowering revision and infection rates.

Reconfiguring the supply chain

By contrast, traditional industry supply chains tend to be linear, labour intensive and siloed. As suggested by Neo Medical and others, digitalization can transform these inefficient systems into dynamic, interconnected efficient networks with the capacity to accommodate a range of stakeholders simultaneously. The shift from linear, sequential structures to interconnected, open supply operations could provide a foundation for how spine companies compete in the future.

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Companies in other sectors have already made such transformations and integrated their supply networks into their operations and decision-making processes with the objective of gaining competitive advantages. However, business leaders should be mindful that the more customer focussed enterprises become, the more developed their data and analytical capabilities must be.

Currently, few MedTech’s integrate their supply chains into their long-term strategies, and few actively and fully embrace the potential of data management techniques. This reluctance decreases a company’s ability to optimize inventories and enhance operational efficiencies of product offerings moving across supply chains. Given the increasing number of exogenous forces affecting the spine market, [e.g., ageing populations, vast and escalating healthcare costs, more stringent reimbursement policies, pricing pressures, tightening regulations, increasing competition, advancing technologies and heightened customer expectations], it seems reasonable to suggest that investing in and developing digital supply networks could be a logical step to enhance value agendas.

Appropriate digitalization of supply chain planning and processing could help to: (i) reduce operational siloes, (ii) respond effectively to market disruptions, (iii) minimize the time, costs and risks associated with onboarding and collaborating with suppliers, (iv) deliver products and services that customers need, when they need them, where they need them at the lowest cost and (v) enable end-to-end supply chain visibility and transparency to facilitate gathering and analysing real-time intelligence to enhance efficiencies.

C suites and digital immigrants

Given that there are significant advantages in adopting digital technologies, why is the spine market lagging other industries in adopting such strategies to improve its supply chains to enhance its productivity and sustainability? A preponderance of digital immigrants among C suites could help to explain why some MedTech’s fail to grasp the full potential of digitalization strategies. Let us explain.

According to research undertaken by Korn Ferry, a consulting firm, the average age of a C suite executive of the top 1,000 US organizations is ~57. Statista confirms this and reports that in 2018, the average age of CEOs in US at the time they were hired stood at 54 years, while the average age of CFOs when they were hired was 50. Since 2005 the average age for CEOs and CFOs has been trending upwards. To the extent that these data are indicative of MedTech’s, it seems reasonable to suggest that their C suite members: (i) would have completed their formative schooling before the digital era, and (ii) when they started their professional careers the digital age was just beginning. For example, in 1989 only 15% of US households owned a personal computer, <1% of the world's technologically stored information was in a digital format, and the World Wide Web did not become publicly available until 1991. In 1990, when the average C suite member would have been ~31, there were only ~12.5m cell phone subscribers worldwide; ~0.25% of the world’s population, and Internet users only amounted to ~2.5m; 0.05% of the world’s population. In 2002, when the average US C suite executive would have: (i) been ~37, (ii) completed their professional training and (iii) well into their careers, digital technologies were still relatively underdeveloped. For example, cell phone subscribers were only ~1.5bn; 19% of the world’s population, and Internet users were only ~631m; 11% of the world’s population.

This suggests that during C suite executive’s formative education and professional training, digital technologies were embryonic, and the Internet, mobile devices, social networking, big data, and computing clouds, had not yet transformed work practices and healthcare. Thus, a significant proportion of current executives of US MedTech’s could be digital Immigrants: people whose professional careers were influenced by analogue technologies, paper, and television, and they only acquired a familiarity with digital systems later in their careers when they were adults. This could affect their ability to appreciate the full potential of digital technologies and help to explain the relative reluctance of MedTech’s to digitize labour intensive, inefficient, linear supply chains.

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Stringent regulation and digitization

This reluctance becomes more significant as regulators demand that MedTech’s employ more sophisticated digital strategies. Increasingly, people are being given spinal implants and devices, which cannot be subsequently removed. Patients rely on these to be safe and to perform as intended for their lifetime, and regulators are devising more stringent rules to ensure that this is the case. For example, the European Medical Device Regulation (MDR), which entered into force in May 2017, requires all medical devices sold in the EU-27 and Switzerland to be MDR approved. The EU-27 represents ~33% of the spine market’s global revenues. MDR governs the production and distribution of medical devices and their compliance. The regulation states that, “Medical device manufacturers are required to have systematic methods for examining their devices once available on the market, by systematically gathering, recording, and analysing data on safety and performance”. MDR expects all MedTech’s to have robust supply chains and the ability to conduct data-driven audits to trace manufacturing modifications to specific implants and devices and to prove the resolution of any problem that might arise. While tightening regulations increase approval costs and prolongs product development time, they also provide incentives for companies to enhance their digital supply networks.

Controlling the inventory-to-revenue ratio

A digital supply network can enhance an organization’s ability to manufacture products in optimum volumes and deliver them to the right customers at the right time. This could help to improve patient outcomes and lower costs. Also, digitalization assists enterprises to enhance the control of their inventory by improving planning, forecasting and management, which is critical given their relatively high inventory-to-revenue ratios.

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and

Low back pain, spine surgery and market shifts

Spine surgeons in hospitals need to have relevant implants and devices available in the operating room at the right time. Hospitals need to be able to locate products in their cabinets. Without appropriate digitalization strategies health professionals would need to spend time searching for devices that may or may not be used during an operation. This means increased costs, as high value surgical trays would flow through inefficient supply chains.

To reduce costs, hospitals and healthcare systems push the responsibility for inventory management onto their suppliers. This results in a range of different models, which tends to increase the risks to manufacturers. Currently, spine companies manage a range of different types of inventories, with a significant proportion of their product offerings being held either on consignment or by sales reps, who often spend time managing offerings on behalf of their customers. This increases the difficulty to accurately account for supply levels, location, ownership, and usage, which further complicates billing and replenishment and often leads to excess inventory and unnecessary costs.

A digital supply network can help to reduce these inefficiencies by eliminating waste and saving costs for all stakeholders. Typically, spine surgical sets contain several types of devices, plates, and screws, and usually are sold on consignment. Hospitals return these for re-provisioning often after only having used some of the items in the trays. To guarantee that sales-reps and hospitals have sufficient supplies, manufacturers maintain relatively large, consigned inventories, at significant costs, which impact on the rate of excess and obsolete inventories.

A digital supply network effectively connects manufactures with their sales-reps and hospitals to reduce inefficiencies. Surgical trays are tagged with radio-frequency identification (RFID), so they can be effortlessly tracked by hospitals’ smart cabinets and by all other stakeholders. This allows: (i) hospitals to be billed as soon as a surgical tray, or a part of it, is removed, and the replenishment process started, and (ii) suppliers to reduce their consigned inventory, reduce their excess and obsolete inventory, and reduce their costs.

Ethical issues

We have broached some of the functional benefits and challenges of digitizing supply chains. Before closing, let us briefly draw attention to some ethical issues associated with digitization, which include increasing the challenges associated with data privacy, cybercrime, and the need to keep pace with new and rapidly developing technologies. This gives weight to environmental, social and governance (ESG) agendas, which are positioned to play an increasingly prominent role over the next five years and shall be discussed in a future Commentary.

Takeaways

We have made some suggestions about how common digitalization strategies could improve spine market supply chains and create added value for patients while delivering the highest sustainable returns for manufactures. We have also suggested reasons for the reluctance of some companies to employ digital strategies to transition from linear labour-intensive supply chains to supply networks. In response to the COVID-19 crisis, many organizations partially digitized their supply chains to sustain trading during what became a “new normal” of remote engagements. This suggested that digital enhancements could help spine companies improve their way of working, expand access to services, and deliver more valuable patient-clinician experiences. Dynamics within sectors usually change after a crisis. For example, following the 2008 economic crash, strong companies emerged stronger while weak companies emerged weaker. A defining difference between the strong and the weak was resilience: the ability not only to absorb shocks, but to use them to transform supply chains and enhance competitive advantage. Will spine companies emerge from the COVID-19 crisis stronger and extend their digitized supply networks or will they revert to their costly and inefficient labour-intensive linear supply chains? Keep an eye on the inventory-to-revenue ratio.

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The spine market and smarter diversity and inclusion policies

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The spine market is challenged by the physical and digital worlds converging
Lucrative traditional markets are slowing, and large emerging markets are growing
Environmental, social and governance (ESG) issues are growing in significance
Future clinical and financial success will depend on industry leaders pursuing smart and aggressive diversity and inclusion policies, but it won’t be easy

- Low back pain and the global spine industry -

The spine market and smarter diversity and inclusion policies

Spine companies are predominantly manufactures led by White males who find themselves on the cusp of a transformation driven by the continued convergence of the physical and digital worlds, slowing traditional Western markets and growing emerging markets, and an increasing need to provide patients with the best outcomes at the lowest cost. This raises the bar for spine companies to demonstrate differentiated clinical and economic value. Over the next five years, the spine market is likely to face disruptions and opportunities that impact its core and emerging businesses. Industry leaders are tasked to discover ways to own their disruptions and find solutions to challenges associated with change. Given the projected nature and speed of this transformation, spine leaders’ quest for answers is unlikely to be satisfied by pursuing business as usual. To benefit from the opportunities presented by market challenges, industry leaders will need to recruit new talent with capabilities and competences relevant to an evolving ecosystem. Smarter and more aggressive diversity and inclusion policies, as part of a wider environmental, social and governance (ESG) focus, will be essential to stand a chance of hiring such talent.

Environmental, social and governance issues

Environmental, ‘E’ issues, include the energy a company consumes, the waste it discharges, the resources required to address these matters and the impact ‘E’ questions have on people (e.g., radiation emissions). Social, ‘S’ issues, include a company’s diversity and inclusion policies. ‘S’ emphasises the fact that companies operate within a broader diverse society and addresses an enterprise’s relationships with people, institutions, and the communities where it does business. Governance, ‘G’ issues, represent the internal processes and controls an organization adopts to make effective decisions, comply with the law, and meet the needs of their stakeholders.

In this Commentary

This Commentary focusses on the significance of social, 'S', issues to spine companies and suggests that adopting more aggressive diversity and inclusion policies could help them adapt their business models and strategies to become more clinically relevant and commercially successful in a rapidly changing ecosystem.

Changing emphasis

Historically, ESG issues have been of secondary concern to corporate leaders and investors, but this has changed because ESG matters can provide insights into factors that impact on a company’s financial performance and thereby inform investment decisions. In recent years, institutional investors and pension funds have grown too large to diversify away from systemic risks, which has obliged them to consider the ESG impact of their portfolios. The possibility of commercial enterprises being held accountable by shareholders for their ESG performance puts pressure on managers to prioritize such matters. Already, public companies in the US are being encouraged to: (i) publish statements of purpose, (ii) provide investors with integrated financial and ESG reports, (iii) increase the involvement of middle managers in ESG matters, (iv) invest in robust IT and data management systems, and (v) improve internal practices for measuring and reporting the ESG impact on financial performance.

ESG issues and spine companies

A spine company’s environmental ‘E’ footprint is comprised of instruments and devices, which have a variety of impacts and lifecycles. For example, imaging and guidance equipment eventually becomes electronic waste, surgical instrument sets require sterilisation before reprocessing and infected single-use devices add to recycling challenges.

Spine companies’ play a role in the populations they serve and derive significant revenues from governments: S issues. This is demonstrated in an analysis of Medicare [a US national health insurance programme] data by researchers from the University of Michigan and Harvard University Medical School and published in the July 2014 edition of the Spine Journal. Findings show that between 2000 and 2010, the US government spent >US$287bn on fusion-based spine surgeries.

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The research also suggests that for patients covered by Medicare, the rate of complex spine surgeries increased 15-fold between 2002 and 2014, and concludes that, “despite these large expenses, there is no consensus on the accepted indications for which spinal fusions are performed”: an issue discussed in a previous Commentary.

Governance, ‘G’ issues, for spine companies are dealt with at the sector level, and involve safety testing of their implants and devices, monitoring outcomes and manufacturing quality, safeguarding patient information, and ensuring marketing compliance. However, the future focus of governance ‘G’ issues will likely be company specific, and more attention is expected to be paid to companies’ cultures and ownership structures.

Short supply of relevant talent

As spine enterprises adapt and change their business models and strategies to remain competitive, and as ESG issues increase in significance, corporations will need new expertise, new roles, and new employees to assist them to take a fresh look at legacy issues and turn disruptions into opportunities. The skills required to create and develop future clinical and commercial success include digital expertise, and data management abilities or STEM subjects; [science, technology, engineering, and mathematics] and a knowledge of international markets. However, such capabilities are in short supply, and millennials [people born between 1981 and 1994/6] and older generation Z’s [people born between 1997 and 2015], who tend to possess such skills, prefer to work for giant tech companies, which have untraditional work environments.

A 2018 Forbes study describes the US as having, “a significant high tech STEM crisis”. Another recent study suggests that the greatest demand for STEM workers is from the healthcare industry, which is among the fastest growing sectors, and therefore is expected to face the greatest shortage of STEM talent. Thus, it seems reasonable to assume that, over the next decade, MedTech’s will be challenged to recruit and retain an adequate supply of appropriate talent to help them transform their businesses and this will oblige them to increase their search for capabilities among women and minorities.

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Diversity and inclusion as investment criteria

Currently, MedTechs have a predominance of White males in their workforces. 2020 data from the US Bureau of Labor Statistics show that US MedTech’s employ ~660,000 people, of which ~40% are women; ~77% are White, ~8.4% Black/African American, ~11.5% Asian and ~13% Hispanic or Latino, with women and minorities significantly underrepresented in leadership positions.

Company initiatives to promote diversity have recently gained impetus following the death of George Floyd. On 25 May 2020, Minneapolis police officers arrested George Floyd, a 46-year-old Black man, after a convenience store employee called the police and told them that Floyd had bought cigarettes with a counterfeit US$20 bill. Seventeen minutes after the first police car arrived at the scene, George Floyd was pinned beneath three police officers and was dead. This triggered condemnations from the CEOs of the biggest US banks and the world’s largest asset managers, and turbocharged their intention to make ESG assessments critical to investment decisions.

Reflecting on racial injustices in the US, Larry Fink, chairman and CEO of BlackRock, the world’s largest asset management firm, said that protests following George Floyd’s death, “are symptoms of a deep and longstanding problem in our society and must be addressed on both a personal and systemic level. . . . This situation also underscores the critical importance of diversity and inclusion within companies and society at large”. A similar reaction came from Jamie Dimon, chairman and CEO of JPMorgan Chase, the largest bank in the US and the forth largest bank in the world, who said, “we are watching, listening and want every single one of you to know we are committed to fighting against racism and discrimination wherever and however it exists”. This signalled a corporate shift to a more proactive stance, leading to policy initiatives focused on board refreshment, board gender diversity, and holding boards accountable to a higher standard of ESG practices.

Striking a different note, Omar Ishrak, a Bangladeshi American business executive, Chairman of Intel, and former CEO of Medtronic, stressed the importance of diversity of thought. According to Ishrak, it is not just important to have different people in your organization, but more significant is what you do with the difference. “What happens when you leave the room? How does diversity challenge your thinking and impact your customers?”, asks Ishrak. Such pressure from investors and key opinion leaders serves as a catalyst for change and a greater emphasis on ESG issues, which will become the new normal.

White men rule

Outwardly, all companies, generally agree on the importance of diversity across organizations, and executives promise to rebalance their workforces. However, it is not altogether clear whether such promises lead to tangible outcomes. For example, as of 2021, only ~7% of Fortune 500 company CEOs were women, despite the fact that there were ~77m women in the US labour force, representing close to half (47%) of the total labour force. Similarly in Britain where the 100 largest companies (the FTSE 100) have only six female CEOs, which is the same number as between 2017 and 2019. Also, Black individuals are particularly under-represented in the higher echelons of corporations. According to Equilar, a clearinghouse for corporate leadership data, ~30% of companies on the S&P 500 do not have at least one Black board member, and currently, there are only five Black CEOs in the Fortune 500.

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Available data suggest that women and minorities are significantly underrepresented when moving up the corporate ranks. Tracking such progress is difficult since corporations are not required to disclose information on the composition of their workforces. However, a 2020 report from Mercer, a human resources consulting firm, suggests that the problem of diversity in companies begins early, with minorities not advancing at the same rate as their White colleagues. ~64% of workers in entry level positions in large US corporations are White, ~12% are Black, ~10% are Hispanic, ~8% are Asian or Pacific Islander and ~6% are other races. The share of positions held by White employees increases with seniority. At the executive level, ~85% of positions are held by White employees, while Black and Hispanic employees make only ~2% and ~3% of these positions, respectively. This suggests that minorities face a significant promotion gap in US corporations.

Economic consequences

According to Haim Israel, a Bank of America (BofA) analyst, increasing diversity has significant commercial benefits. According to studies undertaken by Israel, diversity means higher sales and lower earnings volatility risk. “Companies focused on gender diversity at a board, C-suite and firm level consistently achieve higher ROE [return on equity] and lower earnings risk,” says Israel; while highlighting the fact that corporate executives, “don't forcefully step-up their diversity efforts”. S&P 500 companies with above-median gender diversity on their boards see ~15% higher ROE, and the ROE in companies with ethnic and racially diversified workforces is ~8% higher. Israel suggests that the continued lack of diversity inside corporate America, “could cost the US economy ~US$1.5tn in lost consumption and investment over the next decade". If US business and government leaders had decided more than 30 years ago to act on diversity and inclusion, about US$70tn would have been added to the nation’s economic output, says Israel.

Diversity and company performance

The BoA’s findings on diversity are supported by research from several global consulting firms. For instance, a 2018 McKinsey study suggests that there is a significant correlation between diversity in the leadership of large corporations and financial outperformance. More diverse companies outperform their more homogeneous counterparts. This is supported by findings of a 2020 report from the same consulting firm. The research shows that, “companies in the top quartile for gender diversity on executive teams were 25% more likely to have above-average profitability than companies in the fourth quartile - up from 21% in 2017 and 15% in 2014”. Findings were more compelling for ethnic and cultural diversity, where companies in the top 25% outperformed those in the bottom quartile by ~36% in terms of profitability. These conclusions support a 2018 study by the Boston Consulting Group, which found that companies with more diverse management teams had ~19% higher revenues.

Diversity and spine companies

It seems reasonable to suggest that spine companies have been behind the curve when it comes to attracting and promoting women, Black, Asian, ethnic minorities, and people with disabilities. Over the next decade, this could change; not because of imposed quotas, guilt, or shame, but because within these groups, there is a wealth of diverse experience, talent and thought, which could help companies adapt and change. Not only is greater diversity and inclusion expected to help spine companies develop optimum solutions to such issues as the convergence of the physical and digital worlds, but also help them to take advantage of the growing spine market opportunities in emerging economies.

Emerging market opportunities

For the past three decades US corporations have dominated the spine market, but this is beginning to change. American market rule can be attributed to suppliers’ ability to manufacture sophisticated surgical implants and devices relatively cheaply and market them expensively, predominantly in the US, EU-27, and a few other wealthy regions of the world, with highly developed healthcare infrastructures, generous reimbursement policies and well-trained physicians.

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and

Low back pain, spine surgery and market shifts

However, over the next decade, the US spine market is expected to slow, and the Asia Pacific (APAC) market is projected to grow at a much higher compound annual growth rate (CAGR). This is partly because the US has a shrinking working-age population to provide for the vast and escalating spine surgery costs required by the large and rapidly growing cohort of >65-year-olds with age related spine disorders. This has led to the tightening of previously benign reimbursement policies and more stringent regulations, which has squeezed spine companies’ revenues. APAC countries, on the other hand, have ageing populations and a consequent increase in the incidence rates of low back pain (LBP) and degenerative disc disorders, but they also have improving healthcare infrastructures and reimbursement scenarios, increasing numbers of trained clinicians, and increased affordability due to rising per-capita GDP.

Recent policies enacted by several Asian governments are positioned to support the growth of healthcare spending. China represents the largest and fastest-growing market in Asia-Pacific, having already surpassed the combined market value of most nations that make up the EU-27. China is seeing some of the fastest growth in healthcare spending, which support sales of spinal implants and devices, which are growing at a CAGR of 9%.

China has broadened its healthcare insurance coverage and is working on an ambitious programme of reforms, which include the government raising medical subsidies, and improving the quality and range of services of its ~9,000 tier 1, and ~11,000 tier 2 hospitals, which serve townships in rural areas and medium size cities throughout the country. Health expenditure in China has soared from <US$72bn in 2000 to >US$690bn in 2019. According to OECD data, in 2016 China surpassed Japan in total healthcare spending with US$574bn compared to Japan's US$469bn; and surpassed the US in hospital beds per 1,000 persons, with 3.8 for China and 2.9 in the US.

While such changing market dynamics are expected to exert further downward commercial pressure on US spine companies, they also present opportunities for American corporations with the capabilities to fully leverage the fact that by 2022, >30% of the global healthcare expenditure is expected to arise from emerging economies. To put it into a spine perspective; the global spinal surgery market’s competitive landscape is maturing and consolidating while serving an increasingly demanding healthcare sector. Spinal implants and devices represent ~US$14bn global industry projected to approach US$18bn by 2023. Industry leaders are tasked to achieve growth in developed markets and to capture market share in emerging countries. This will require a more diverse employee base with capabilities to develop cost-efficient products, with improved medical outcomes, tailored to local needs. To increase share of emerging markets over the next decade, it will not be sufficient for MedTech companies to simply duplicate what is already being sold in traditional developed markets, both due to cost, resource, and competence reasons in diverse market segments. The spine industry will therefore increasingly need to be agile enough to adapt solutions to local needs.

Takeaways

The bar for spine companies to demonstrate differentiated clinical and economic value has risen over the past decade and is likely to continue rising over the next decade. This new “value bar” increases the pressure on enterprises to rethink their legacy strategies and business models. ESG policies that increase diversity and talent pools could help them do this. The economic consequences for companies that are slow to adopt and pursue ESG policies and promote diversity could be significant.

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Low Back Pain and the global spine industry

by HealthPad

Low back pain, spine surgery and market shifts

Directory:

Tags:

If spine surgery fails to relieve low back pain why is it increasing?

Directory:

Tags:

Minimally invasive spine surgery and computer assisted navigation systems

Directory:

Tags:

Robotic surgical spine systems, China, and machine learning

Directory:

Tags:

Will a rear mirror mindset slow the adoption of technologies poised to influence the spine market?

Directory:

Tags:

Digitalization: the reinvention of spine companies’ supply chains and controlling the inventory-to-revenue ratio

Directory:

Tags:

The spine market and smarter diversity and inclusion policies

Directory:

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