David Uffer 00:03
Dave, hi, welcome to LSI Europe 2024. My name is Dave Uffer, the general partner at Trinity Life Sciences, where I lead the med tech practice. I welcome you to the session talking about alternate sites of care, joined by a panel of four. I'd like to give an introduction to each of them. I'm sure everybody's had a good opportunity to see them throughout the week. Throughout this panel, we're going to discuss the migration we see in the US, which is the world's largest med tech market, of different sites of service outside of the acute care hospital. We'll get into the topic in just a minute, but Amos, if you want to start us off with an introduction about yourself and your company.
Amos Ziv 00:50
Thank you. So first of all, thanks for the opportunity to talk about this really important topic, which is right on the spot. What we're doing at CardiaCare is a wearable device that not only monitors patients but actually treats patients with nerve stimulation. What we're doing is balancing the autonomic nervous system and reducing atrial fibrillation, which is the most common cardiac arrhythmia, and we're doing this at home for the patient. We have excellent clinical trial results recently, and it's spot on for this discussion.
Addie Harris 01:28
I'm Addie Harris, and I'm the CEO of HAVENTURE. HAVENTURE is an incubator of medical device companies, specifically those in robotics, computer-assisted surgery, and digital surgery. It's based in Grenoble, France, and I work in an advisory or board member role with the company center incubator. I also work in similar roles with several companies worldwide, mostly in the digital space, but also in maternal health.
Tim Fitzpatrick 01:59
Great. Hi everyone, I'm Tim Fitzpatrick, CEO at IKONA. IKONA is a learning company that develops education and training products for patients and staff in frontline care settings in complex areas. Our first commercial product is a virtual reality-based product for patients who are considering home dialysis. Home dialysis is an area we spend a lot of time in, and I think it’s very apt for this discussion.
Osman Khawar 02:23
Thank you, Tim, and thanks, Dave, for inviting us. I'm Osman Khawar, CEO of Diality, a medical device company in the dialysis space, and we're building a dialysis machine. We're trying to maximize clinical flexibility. We do that by combining the power and prescription flexibility of a large dialysis machine with the usability of more consumer-type products to simplify and support dialysis in alternative sites of care, such as the home. More recently, we got our 510(k) clearance for the device outside of the home. Great. Well, thanks.
David Uffer 03:01
At Trinity Life Sciences, a consulting and data analytics firm, we have to keep our pulse on the market all the time. If we're not bringing value to our clients, we started publishing on alternate sites of care and actually tracking and looking at this shift. You can look at all the data and analytics you want, but I want to get into the whys. Why don't you start us off? Why do you think we're seeing a shift in sites of care? Now you're building something in dialysis, but we see this across surgical technologies, cardiac care, respiratory chronic disease, and even acute care management. Talk about your experience and why you see this shift in care.
Osman Khawar 03:43
I think generally, what I'm seeing across the spectrum, including dialysis, is two advantages: clinical advantages and economic advantages. When both of those come together, it becomes relatively powerful to move the sites of service outside. In dialysis specifically, there's been a push to move outside of traditional spaces like a dialysis unit or a hospital to the home. This has been driven by a lot of different areas. One is the payer market and the government. CMS has been driving this through policy. CMI has been doing this with models such as ESCOs and CKCC, which are models to take risk on the full patient. In that case, people are trying to reduce hospitalizations and drive patients home. When you look at surveys of patients and providers, there is a big drive from all of them to try and get more patients home. Generally, patients who are well-educated, as Tim can talk about, would predominantly choose dialysis at home. Physicians also say that if they had the appropriate resources around them, supporting them in that ecosystem, they would try to place a majority of their patients in the home environment rather than a traditional space. So I think there's a big push from all sides, particularly in the dialysis space.
David Uffer 05:03
So in dialysis, Tim, while Osman is focused on end-stage renal disease, you're across any type of renal care in disease states, whether it's CKD or down to ESRD. Tell me what you're seeing in this migration as well.
Tim Fitzpatrick 05:21
Yeah, sure. I think just on Osman's point, when we first looked at where our patients that we can support are, Osman mentions the friction in transitions of care. If more than half, or up to 60% of patients are crashing into the hospital in the first place, they end up at outpatient dialysis. We know that 90% of patients on dialysis today in the United States are in one of these outpatient centers. There is a transition of care from one of those centers, about 8,000 around the country, to home. The friction comes when you ask patients, are you aware of your options? Typically, the answer is no. The second barrier is, are we able to help you get over the fear hurdles to get home? There are a lot of really difficult challenges, even when you are able to provide options and help them understand that there are other settings for care, like home. Getting them there is really tricky, and keeping them there successfully is even harder. There are all sorts of barrier points across the dialysis patient journey in particular. The second point I would mention is just if we think about practices, ideally, you have a patient who has CKD stage four or five, who is before kidney failure, thinking about needing treatment at some point. Ideally, they start at home, in the right therapy for them. In many cases, that is home. I know Osman has done this as a nephrologist, and that conversation is great when it works well, but it's difficult to get right when you're talking about doing something in a new setting that's scary and overwhelming. That's where we come in and want to help.
David Uffer 06:57
Amos, we're not going to advocate doing TAVR and CABG at home, but we look at both chronic and acute care. I'm sorry, conditions that you can monitor and then treat as well outside of the hospital.
Amos Ziv 07:17
I think that part of the force driving this shift, first and foremost, is the fact that many of these chronic disorders demand a lot of attention. With AFib, patients feel the symptoms; they don't feel well. It's an alarming condition, and they visit the ER often whenever they have bouts, especially in the beginning after diagnosis, leading to a lot of physician office visits. You were asking why? Well, first and foremost, I think connectivity in general, IT allows it. This has become almost a commodity. Everybody has a phone, everybody can use a wearable. So technically, this has become much easier over the past, let's say, 10 years. In terms of the needs for us, it's monitoring patients with a chronic condition that has acute bouts. We're trying to deal with both of these situations by delivering therapy on a predetermined treatment regimen. Let's say they do three neuromodulation sessions a week. Additionally, when we see that there's an upcoming event, we have a set of sensors on the device. If we see an upcoming event coming, we alarm the patient to add additional treatments to prevent that event. We're trying to do both acute and chronic management of this disorder. Coming back to your why question, I think scalability and reach are important. We have projects now in Indian areas that will never get access to ablation therapy or similar treatments. This allows for expanded outreach for these technologies to treat patients.
David Uffer 09:03
Addie, let's even shift one further step outside of chronic disease management and chronic patient care to acute care. Somebody needs a TKA, you're going to get a new knee, a new hip, or you're going to have spine surgery. We're seeing such a migration of even the movement of surgery outside into ASCs for a host of different reasons. Is technology chasing that, or is technology responding or helping to build that?
Addie Harris 09:32
Yeah, so, I mean, there's a huge push to treat these patients in ASCs. The push is multifold. One reason is from the hospitals. Hospitals are becoming more crowded, and there's a shortage of healthcare workers. For patients that don't need very acute care and are capable of going home without comorbidities, it makes sense for the hospital to not want to take those patients into ORs that are busy with patients who need to be there for cardiac care or other more acute issues. We have to remember that the majority of orthopedic procedures are actually considered elective procedures, which could be debated because if you don't treat an orthopedic issue, that patient becomes less mobile, less healthy, and may end up with renal or cardiac issues. It is very important to treat these patients, but the majority of them are healthy enough to go home the same day. That's really why there's been a push for care to the ASC, both by the hospitals and by the payers. The majority of insurance systems want those patients treated at the ASC. It's a lower cost point for them, and it's a more efficient setting. Patients themselves want to be treated at the ASC. If they're otherwise fairly healthy, they have a knee that isn't working well, they can't do the activities they enjoy, and they don't want to be in the acute care setting of a hospital, which signals to them that they are sick. All of these reasons are really pushing patients into the ASC setting. We're seeing technology respond to that. Some technology transitions easily, while others require quite a bit of technical or nurse support to use. The big push right now is for these technical solutions, such as robotic systems and software systems, to enable the ASC environment. They need to work efficiently without requiring extra staff, which is often what hospitals do. They need to be so usable and seamless that they integrate with the procedure and reduce the need for extra staff.
David Uffer 12:10
So we've talked about the rationale and why we see some of this migration. We're at a conference here where we have a lot of companies developing technology, and investors are looking to fund that. You work with an incubator model. Are you seeing technology respond to being developed in different ways? What are the considerations for building technologies appropriate for these alternate sites of care? For example, you brought up robotics. Do we have to have different systems? I might not have force circulating nurses that can integrate within the equipment that I'm using. It might not be appropriately sized. It might not integrate with the infrastructure that I have in a hospital.
Addie Harris 12:52
Historically, we've seen a lot of digital devices, robotic devices, software devices, and navigation systems developed for single clinical procedures or narrow sites of care. For example, a system that's used for sports medicine and sports medicine only. I think we're seeing a shift in companies realizing they need to treat more than just one procedure area because this ASC may have a sports medicine doctor on Wednesday, a hip doctor on Friday, and a spine doctor on Monday. They need to think about who is addressing what and can they get more applications onto one big piece of hardware. One reason is storage is limited, and you don't have all those circulating nurses. You'll have different staff in there day by day. So it really needs to be one system. They need to be trained on it, and they should know they can pull this one piece of equipment, not multiple different devices depending on the procedure. It’s too much for these very efficient, small settings.
David Uffer 14:27
Osman, over to dialysis. I've been in hospitals where they'll wheel somebody down for that day of dialysis if they're going to be in critical care for a few weeks. You go to the dialysis centers, and you see different types of equipment for their needs. How has that impacted how you've had to develop and design what you're building?
Osman Khawar 14:48
We thought about this quite early, David. We really wanted to have a device that was all-encompassing for all sites of care from the beginning. When we first started on this journey, we looked at places where this was done successfully. Cardiac defibrillation can be done anywhere now, and infusions at home are very simple. You can see the usability space where getting the ultimate alternative care, which for me is the home, if you can get a layperson to utilize your device, that's great. We have a very life-saving therapy for a sick patient with a complicated disease. The ultimate case is taking something complicated and supporting it at home. When we approached it, we thought about two things. The first was usability. If you can get a consumer to utilize your device, then that would be a success, not only in the home but in any other site of care, because we think about sub-acute spaces and other areas too. We designed, from a usability perspective, a consumer-type focused device for dialysis. The second thing we considered was automation. There are lots of tasks to do in current incumbent machines for dialysis that rely on a high level of training, and there's room for mistakes. The more clinical tasks we could automate and take the burden off the user and onto the device, the more supportive we could be. Later, as we progress, we want to start to implement other ways to support the patient in that space, such as remote monitoring and data, which creates an ecosystem of support for complex treatment at home.
David Uffer 16:29
Thanks, Osman. Tim, you have a lot of different constituents to serve across the entire spectrum. How does this impact what you're building?
Tim Fitzpatrick 16:39
Yeah, I think it's pretty central, Dave. For us, we are a broad learning company. We have sets of stakeholders we have to think about, as well as the devices. At the end of the day, we want to be the glue connecting the stakeholders and the devices. On the stakeholder side, we have increasingly patients and care partners who are having to care for themselves, operate new devices, and learn new techniques. Overcoming fear is the number one hurdle. If you look at patient-level barriers, they also need support in the home. What does that look like? Things like self-cannulation or vascular access are complex procedures that sometimes patients will have to do on their own. How do we ensure that we can build the education solutions that get them up to speed confidently and give some measure of success and confidence to not only the provider but also the manufacturers and the families themselves? That's one side: educating providers, care partners, and patients. For devices, we also think about ensuring that every single device has the ability to instill confidence in patients so they can use it. We're always thinking about the need for innovation on the device side because we will increasingly rely on families to perform this care. We want to ensure confidence in the competency and skills needed, and the upskilling of families in this shift to other settings, especially outside the hospital.
Amos Ziv 18:10
I think the other piece from what Tim is talking about is that education on devices is generally episodic. You come in, meet your trainer, get trained, and go home, hoping you remember it. You have a 1-800 number to call. But in the space where Tim is, you have ongoing, continual, real-time access to the same educational material—not just a booklet to go through. That kind of innovation is needed if we want to get complex devices into alternative service.
David Uffer 18:39
It's a great transition over to Amos as well. You mentioned AFib. You've got your EP saying, "I'm going to do this in the hospital," your cardiologist monitoring you and making the recommendation to go to that or not to go to an ablation. How do I monitor somebody when they're at home? When it kicks off, who's going to engage with that person?
Amos Ziv 19:02
I just want to echo a little bit. I know we heard from Art, Adie, and Osman. One key thing we're trying to focus on, due to delivering care at home, is empowering patients to take care of their own health. The fact that they are involved in the process is very real for us. They take measurements, see the results, activate the treatment, and see the results after the treatment. They know they have a physician who can see the ECG and get all the data, and they have a dashboard. We're trying to create a solution that is not a one-size-fits-all. Some patients are more apprehensive and need more communication with the physicians, while others are more independent. The overall solution, by the way, is through an app. The app is very comforting for the patient. It asks how they feel before treatment and gathers data. The FDA is also very interested in symptoms related to symptom changes. Empowering the patient to take care of their own health is crucial. In terms of the physicians, you're correct. The atrial fibrillation patient journey starts when they feel something is wrong. They might go to the ER or to their primary physician, who will refer them to the electrophysiologist. In terms of ablation therapy, which has become the gold standard, it is pushing forward to earlier stages due to massive studies showing that earlier intervention leads to better outcomes in terms of mobility or mortality data. However, many patients still do not receive ablations. The ratio between the number of new AF patients and those receiving ablation is still high. There are still patients who don't want ablations, and many general cardiologists say, "Let's try this before we go to ablation." This doesn't work for everyone. We have a 70% response rate, and those who respond see a 50-70% reduction in AF burden. Not everyone responds, so there's always the option for the physician and the EP to say, "Let's try this. If it works, great. If it doesn't, we can progress to medications or innovation." It also depends on regions and states. Some patients want to get ablated and get it done, while others are more cautious. The overall patient journey dictates the communication between them and their physician. Primary care physicians may see these patients initially, send them for an ECG, an echo, or an ECG patch. These are our targets. The device itself will be a physician-prescribed device. We're a de novo 510(k) device delivering energy to the body, so it's not a consumer device. We're targeting general cardiologists and EPs. The first studies we've done are on early paroxysmal patients, and we're now looking at releasing a study next month to treat patients right after ablation to reduce atrial activity after the procedure and inflammation. If we reduce that, we increase the success rate of the ablation. We're trying to expand to both indications and populations.
David Uffer 23:03
So, talking about clinicals, let's finish up on just the pre-commercial stage. We're looking at new inputs that we have to have from different clinicians. Previously, you'd go to the academic centers, the KOLs, the early adopters, who we've defined in different segments. They're all different individuals. How does this shift inside of service mean we have to engage more patients or different clinicians than we would have in the past?
Addie Harris 23:34
When you're doing your formative usability, some different regulatory pathways require usability versus encourage it to be part of your submission. I think doing a formative usability study is incredibly important. In that study, you should bring in who is going to be using the device in different sites of care. For example, when I was leading the team that developed Velis, we wanted the system to work very well for the outpatient surgery center. A number of our KOLs had their own outpatient surgery centers, so we brought in groups of nurses and did a study with one of the doctors, Dr. Green. Our usability team went there and conducted a pretend operation where one of our usability engineers pretended to be the patient. She had an incredible perspective on how the skeleton staff that works in the ambulatory surgery center was using the device and where they were having friction with it. This led to innovations in training and the design of the device to make it easier to use in that care setting.
David Uffer 25:03
If we could change gears a little bit, I think we've got about 15 minutes left here. Let's talk about the commercial stage. You have different people that you're going to need to engage in decision-making. In the acute care hospital, if you need an OR, you get to the surgeon. They're having a little less user preference now, so you have to go to the value analysis committee. Sometimes you go down to the basement and purchasing or the CFO level for capital equipment, GPOs, all that. What's changed, and who do you need to engage for actual decision-makers in this new set of services that have changed and disrupted how you looked at going to market in the past?
Osman Khawar 25:45
The decision-makers in the acute setting are still the same. Value analysis committees and the work you need to do are still there. The same principles apply. When you have an alternate site of care, you still need to prove that there is value in what you're creating. The stakeholders may change. In the dialysis space, there's an intermediary between the manufacturer and the patient, which is a service organization. You need to prove the value, which may be in terms of safety and effectiveness, but also HEDIS work and other issues where you can show that there is value, particularly in the renal space. There's been a big shift towards value-based care recently. Right now, probably 60% of dialysis patients in the United States are in full-risk managed care rather than fee-for-service. There are new stakeholders wanting to know how to take care of these complex patients better. As a device provider, we need to show that there is a HEDIS discussion and get that data to demonstrate that this is something that needs to be done in the home. In dialysis, particularly, the value on total cost of care is very high in the conversation, more than in other care settings because this has been a conversation with CMS for the last decade and continues to progress.
David Uffer 27:09
Amos, you've seen completely different protocols and evaluation. Who is making these decisions?
Amos Ziv 27:16
You're touching on the challenges of point of care. I want to add that there are challenges in almost any arena. First, for us, we're a clinical-stage company, so we know we're doing pilot studies and not moving into pivotal studies. Conducting clinical studies at home is a challenge. It's not like a patient comes in every week or month to a clinic with a nurse practitioner watching them. We have to ensure that everything at home is taken care of, with no glitches because there's no one to look at it. There's an operational clinical challenge here. Second, regulatory changes. When you come to the FDA for the first time, they may say that ablation isn't considered a disabling disorder like stroke. They only know about devices for AFib in the context of ablation, which is done in the hospital. We're saying we want to treat this population at home. That was a huge challenge, showing the FDA that this can and should be done. In terms of payers and commercialization, we're trying to adopt novelty and models. We've seen a couple of examples, like a pharmacy benefit category, which is more like a rental model. The reason that's nice is that payers say that as long as the patients are using the device and you're collecting data to show efficacy, and they continue to use it, they'll pay for it on a repeated model, whether it's three months, six months, or whatever we decide on. We're trying to fight through these challenges, and this has been our approach. I think in terms of commercialization, we're checking if that's going to be the right angle.
David Uffer 29:14
It brings up a good topic. People can come to me for any part of the spectrum, from pre-commercial to post-commercial. One of the greatest areas that we're still trying to understand when you get to the end of the journey to go large-scale commercial is market access. Sometimes reimbursement is still the biggest challenge. People want your technology and are using it. How would they get reimbursed? We have all kinds of models. Are we chasing reimbursement in some instances? Addie, I've seen some hospitals build surgery centers for orthopedics just because outside the acute care setting, they're paying much greater fees, even if it's in an office-based procedure. How do we deal with the reimbursement issues here? Or are they taking advantage of them in some points in a negative way?
Addie Harris 30:04
That can probably be argued both ways. The overhead that an ambulatory center has to manage when they don't have the support of the hospital is greater. That can be part of why reimbursement is greater in that setting, because they know that center relies on a lot less support than they would typically have in the hospital, so they don't have some of the efficiencies. For robotics specifically, what's interesting is there is no reimbursement for robotics and navigation procedures. There is a code, but it's rarely reimbursed. If it is, it's in the tens of dollars, while these devices often cost anywhere from $100,000 to $2 million. The real drive to have those devices in the ambulatory setting comes from both the patients and the efficiencies they can offer to the surgeon. There's a lot of direct-to-consumer marketing. I think Stryker really pioneered this pathway, where patients come into their orthopedics and say, "Hey, I want a robot to help with the procedure." Early on, there wasn't necessarily data to show that the robot helped, but there was a perception from patients that if you have this robot, it will surely help with my knee procedure, hip procedure, or spine procedure. The robots have improved, and a lot of their technology has improved, so they do provide benefits. However, the reimbursement conversation continues to be absent, and it hasn't been for a long time. I think that's a very different conversation than some of these other therapies, but we are seeing more direct-to-consumer interest, and consumers with the financial means are willing to pay for a premium level of care.
David Uffer 32:13
Tim, are you seeing patient and DTC models with some type of contribution, or are you trying to build around a value-based healthcare model that you can show a reduction in cost of care? What reimbursement impacts are you considering important for your business?
Tim Fitzpatrick 32:30
Absolutely. We kind of went a different profile for the company. Over the last several years, we've been in the market generating revenue. We provide a product to the service providers that Osman mentioned, and they use that product to help more patients understand and choose home dialysis and get on to home effectively. That's an annual license where we create content, manage content, and provide analytics, along with a wrap-around service with a VR kit that goes to one of these dialysis clinics. That is a measurable ROI in terms of allowing more patients to get home. There are plenty of challenges we could discuss regarding the dialysis bundle and reimbursement. Even in cases where reimbursement exists within education, which is quite rare, there's something called the kidney disease education benefit, which is paid for. You get a certain number of sessions if you're a patient with CKD stage four or five who is considering treatment modality options. Its utilization is under 2%. The reason is that providers have to manage a lot of back-office tasks associated with actually getting that benefit. They also have to measure learning, which is a challenging task on an individual patient level. It probably requires surveys and complex processes that they won't add to their workflows. Even when there is reimbursement, we think about other additional services that layer data onto the product. It's an implementation and change management question more than anything else for us as a product that has been in the market, serving patients and trying to understand where we can add value. What does that ROI look like? Whether it's staff training, more efficiency, getting people home faster, or helping to address the bottleneck of the number of patients who want to go home but face a several-month wait just to get signed up for training, we need to get them through training faster and home faster. The leaky bucket at the end is that half of patients who do go home end up back in center because something happens and they weren't adequately trained on a device. We have a lot of education and training problems, and each will have its own ROI that we have to map out.
David Uffer 34:34
So for ESRD, which is one of the most costly patient populations in the world, you would expect home care to deliver much more economically efficient therapy. Are they matching that with the reimbursement or the coverage here, or are they not allowing you to survive in this element?
Osman Khawar 35:04
You're 100% correct. We should be, but like a lot of stuff in American healthcare, we're not. The ESRD space is a bundle, like Tim mentioned, so you get a singular payment for the dialysis treatment, dialysis-related medications, labor, and devices. There's a lot bundled in there. There's been a movement, but it's been moderate. There are TADA and Tiffany's, which is this add-on payment for two years for innovative new devices in the renal space. That's great, but most people in the renal space think that the bundled payment is broken, and we need to figure out how to fix it because it stifles innovation. Home care is paid the same way as center care. There's a bundled payment for the monthly services, and finding ways to improve that is crucial. Certainly, CMS wants more patients going home; they just haven't figured out how to pay for that. As we move more to value-based care, where providers take full risk on the approximate $120,000 per patient it costs to care for a dialysis patient, that's a place where we can have innovative models to drive patients home. But it's outside the traditional reimbursement model. We hope CMS starts to listen soon.
David Uffer 36:34
I don't want to neglect our audience members. If anybody has a question, I'll open it up to the panelists. If you want to raise your hand, we have microphones around.
Osman Khawar 36:49
While we're waiting, I just wanted to congratulate you on being on a panel today. We got two kidneys and one heart.
David Uffer 36:59
Fantastic. Let me open it up to the panelists. Any other points that you want to make?
Amos Ziv 37:06
The question I think is, where is this all going? My answer is our story. When we founded the company in 2018, we had to choose between a prototype that was a clinic-based device for patients with cardiac arrhythmias who were supposed to go into the clinic and do these sessions for 12 weeks of therapy, or the wearable. This was before the wearable hype. Eventually, we decided to gamble on the wearable, and I think that's been proven to be the correct decision. This is where it's going. The acute care will stay where it needs to stay. Chronic care and chronic management will involve much more home care, much more monitoring, and much more involvement of the patient and communication between the patient and the healthcare system. This will continue to expand.
Addie Harris 38:10
I would agree on that point. The days of acute care settings holding patients for long periods or treating patients who aren't as acute are reducing. We've seen that reduce over the decades, and I think it's only going to continue to go that way. Other care centers will become more and more the standard instead of an option. As technology gets better, it requires a total shift in how medical care is delivered. It goes from a person delivering that care to devices that can be in a room in the hospital or a building near the hospital, to the patient or a patient's family member being able to deliver it themselves.
David Uffer 38:59
Great. Well, I think that's a wrap for our panel. I want to give many thanks to Scott, Henry, and the entire staff at LSI for giving us this opportunity to talk about the topic, as well as bringing together this amazing med tech ecosystem. I encourage everybody to keep attending and keep driving med tech. Thank you very much, panelists.
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