Like any industry, hospitals spend a lot of time comparing cost with each other. Just as the insurance and spine industry shares information at meetings and discuss strategies, hospitals are doing much of the same. It's a war of survival! What a hospital pays in Maricopa County is no longer a secret to someone in Miami. To paraphrase Tom Friedman, the spine market is flat, hot and crowded. We will pay for our sins! The Spine Cartel has the ability to negotiate better pricing by leveraging other areas of their portfolio. An example is Stryker, an organization that has been know to slash pricing in exchange for "pull thru" business that they offer in med-surg, sports medicine, total joints, biologics or trauma. In addition to Stryker, companies like Biomet, DePuy, Synthes, and Zimmer have set the bar. We don't have to worry about socialized medicine because the industry and distributors will price the smaller companies out of the market, and if it isn't the Spine Cartel, it will be the distributors.
TSB would be interested in having its readers share some of the pricing challenges that they are facing on a daily basis. Let's face facts, we have commoditized the market! How many companies offer Cervical Plates, Cervical PEEK, Pedicle Screws, Anterior Lumbar Plates, ALIF, PLIF and TLIF's? Why is one company's product any better than another's? There is no one "Ferrari" when it comes down to the aforementioned products. Yes, maybe some of the instruments make a difference, but if you are savvy and responsive anyone can make modifications to an instrument to appease the surgeon. Today, the industry has sixteen dynamic stabilization systems with numerous waiting in the wings and counting. This week alone we heard of a few new dynamic stabilization systems. How many lumbar and cervical discs are there? Everyone claims that there device is better?
The challenge that most of the early-growth stage companies have is forecasting future revenue and the type of capital that they will need to bring their IP to the commercial market. The only caveat that we offer is that the investment community holds the keys to the emerald city, and its now going to cost you more in equity to get the capital you need. TSB wants to know what our readers think?