Brian Stewart, Tally Surgical - Retained Sponge Solution | LSI USA '24

Brian Stewart  0:00  
In 1999, a very noted publication came out called To err is human. One of the conclusions with that was we're killing over 100,000 people a year from medical mistakes, preventable mistakes in health care providers in the US hurting about five times more than that. But 20 years later, the American Medical Association, the journal for patient quality came out with a follow up, how are we doing 20 years later, we're not doing any better, we're likely doing worse or those estimates were low, estimated that over 400,000 people are being killed. That's more than all the armed conflicts in the history of our company combined, every year from preventable medical mistakes, and more than 10 times that being hurt. The most common in surgery, medical mistake year in and year out, as measured by the FDA reporting database and joint commission, about 4000 times you hear about 11 times a day. One of those guys are retained a sponge, the left hand side of the patient. So a surgical sponge made of cotton, small case, you might use 10, 15, large case around up to 200. You suck them with blood, you're circulating nursing, your scrub nurse are tasked with counting these by hand. And what do you know, To err is human. They're human mistakes get made? What happens when you leave a sponge inside when somebody first of all bad for the patient? Patients already been opened up with a some sort of issue. Best case scenario, catch it quick you treat a mild infection. Worst case scenario, you know what usually happens, they go back to the operative report, what does the operative report say, by definition, that team thinks the count is correct. So they don't check for retain sponge usually right away. Ultimately, that's caught on X ray. And hopefully it hasn't manifested itself into something worse, around a de facto 100%, temporary permanent, and a surprisingly high, almost up to 13% mortality rate from a piece of cotton being left in the patient. For the hospitals, you're going to get sued, these will settle out of court, depending on the state somewhere around right under $470,000. You don't get reimbursed for the original procedure, you don't get reimbursed to fix it. So a little over half a million dollars every time one of these things gets left behind. Things that aren't as measurable time, fines, reimbursable care and the reputation. So right now, if you are one of your loved ones is going on for surgery, you're gonna have people count these by hand. In 2024, a company called surge account medical launched a product that used unique identifiers on sponge in the form of a barcode, it would count them before and count them after using a unique identifier on each sponge. And what do you know a nurse with a barcode scanner counting uniquely identified sponges gets a more accurate count. I know because I started that company. We later went public through us back in 2008, oof mental health. And we ultimately exited that business to Stryker, solid first generation technology, safe to say that there that that technology was stale the day we invented that product. But it's it was a good step in the right direction that's been on the market for about 20 years. But then you've got a couple other first generation technologies, someone had a business somewhere acquired, safe to say, after being on the market for almost 20 years, got about 10% penetration in my old product. Medtronic has another product, solid first generation product. But after 20 years, you've got almost 8% of the hospitals in the US who are still counting by hand, right? And so use the people we spoke to No, not really. What do people tell you about sort of first generation technologies, they're cumbersome, you can imagine scanning a barcode, if you've been to a grocery store and done self checkout, harder to scan some stuff than others. Imagine doing that for a folded twisted up sponge, it slows clinical workflow. Some will say, my old product and a couple others just lacked the desired functionality. It might give you a good count, but it doesn't help you find something when it's missing. And not so much my old product but a couple other on the market sometimes fail. They don't work when they're supposed to. And that's a problem and cost, right. So I never thought after selling my business that I'd be thinking about retaining surgical sponges ever again in my lifetime, but came across a newer form of RFID ended up licensing a number of patent families, and together with people that I had worked with at my old company competed against other companies, people from my distribution partner at Cardinal Health, we raised some money or actually just put on our own and got together to pioneer what we thought would be a next generation product more reliable, easier to use cost less and does more. Right. So when we started doing sort of, hey, take a look under the hood, we've got something new, talking to hospitals, if you've got something better, faster, cheaper, does more you're gonna get that meeting and we have so we combined not only our own thoughts But we went out and talked to customers just like we did from day one. What do you want? Why aren't you using something? What do you like about this product? What do you not like about it? And we created tally. So it's a proprietary RFID based solution simplifies and speeds that count dramatically helps you find sponges when you're missing it, and does it at a lower cost. So there's what a surgical sponges with a little one of our barcode labels on the outside soft is pliable, you can twist it, it's fast. A relatively not quite but a generally off the shelf mobile device with the integrated RFID reader and a mobile app that does your counting and finding for you. We have to slow down the speed in order for the nurse to have a more tangible experience. But it's very quick, it helps find sponges when you're missing it and it's very affordable. We adapted RFID in a new proprietary way. But we intentionally tried to do it first with a technology or a form of that technology that was very inexpensive sponger to use ubiquitously throughout surgery in the US around 5500 acute care facilities, this doesn't include ambulatory surgical centers, which as some of you may know, is actually getting a surprising amount of shift in operative workload. around 36 million, I'll say relevant annual procedures, these are any procedure where the person is being opened up, something's going in them like a sponge that has an extra detectable element in it and supposed to come back out. Around the average number of sponges of different types used per case is around 25. So you've got about 900 million sponges used our market opportunities a little under half a billion here in the US and around three times that worldwide. Clinicians eyes look that happy, don't they? Anyway, so like I said, we've previewed this, you know, we think we know the space well, but we're not presumptive enough to think that we know exactly what customers want. So we involve many of our customers in the development process, we took it to people using my old product to see what they liked it. We took it to people who were using a competitive product to see if they would switch into ours. And we took it to people who weren't using anything who are waiting for something better. That's led to a growing pipeline of opportunity for us. The board of directors here is people who've been there done that already in the space and accomplished people who've driven exits in this space before. Cleared regulatory path, we actually got our FDA approval during the height of the pandemic, which was a surprise to us, but cleared regulatory path. We went out and started demoing the device for folks and I think we were over target with 90% of it. But we definitely got feedback on some things that we wanted to tighten up and add to the solution. We're just completing those product improvements now, having some discussions with partners to help us accelerate our growth trajectory and supply chain and got a lot of people excited to give it a shot or preparing for us launch. And that's a little bit about about tele surgical expect us to come back soft launch here this year. Full commercial launch later this year, likely announced some strategic partnerships, launched in the US look for us to innovate our product, leverage our footprint in the award to do more than just sponge counting with that one device and ultimately launch outside the US as well. That is it. Thank you