On August 30 Caesarea, Israel-based Mazor Robotics Ltd announced a $40 million investment by Medtronic into Mazor. That purchase brought Medtronic’s stake in the high tech robotics company to $72 million, representing approximately 11% of Mazor’s overall equity. Ultimately, Medtronic’s investment in Mazor could rise to over $125 million.
Doug King, who is Medtronic’s senior vice president and president of Medtronic Spine division, noted that, in fact, robotics is an extension of Medtronic’s long history of providing surgical navigation tools to spine and neuro surgeons. “Mazor Robotics’ technology and Medtronic’s navigation capabilities and implant systems provide spine surgeons with complete procedural solutions that advance the standard of care and will help surgeons maximize predictability and efficiency.”
Since Medtronic and Mazor started their strategic relationship in May 2016, 59 Mazor X systems have been ordered. At roughly a million dollars a pop, that’s an impressive launch and speaks volumes to the management capabilities on both sides of the deal.
The “New” Medtronic Spine
Medtronic Spine, which is the largest supplier of spinal implants, instrument sets and intelligent surgical assist devices in the world, is not the same company it was before Doug King and his team took the reins.
The Mazor partnership is only the latest in a series of interesting moves made by this management group. Earlier this year Medtronic Spine reported that its sales growth was ahead of the admittedly low industry average. But for such a large international company to have reversed a multi-year pattern of market share decline is remarkable.
On the occasion of the upcoming North American Spine Society (NASS) meeting in Orlando and this major commitment to intelligent, advanced surgical assist devices—otherwise known as robotics—we sat down with Doug King to ask him about the new Medtronic Spine and, more specifically, these new intelligent technologies.
OTW: Doug, before we start talking about Mazor can we ask you a couple questions about Medtronic Spine’s transformation these past few years? Medtronic Spine is now growing faster than the overall industry and gaining share. What did you and your team do to turn the ship around?
Doug King: I grew up in the spine business dating back to Sofamor Danek days. When I took over the role as President of the spine business it was obvious we were not making a concerted enough investment in some of our core technologies and had fallen behind in some of the major platforms (i.e., pedicle based platforms, interbody implants, minimally invasive systems and enabling technology you might use for fusion).
So, we returned the focus back to innovation.
Our overall strategy was to balance biologics and spine with an emphasis on thinking about spine surgery differently, moving from a single implant focus to how surgeons approach the pathology of the patient. By considering the full procedure and the pathology of the patient, we believe we can create solutions that transform spine surgery.
Medtronic, with a strong brain therapies business, is in a unique position to develop new therapies and ensure they are fully integrated with our enabling technology (such as adding power to spine-specific drills and navigation capabilities to Midas.)
Now that we made the changes, we’re in the execution phase of that strategy and we’re seeing dividends.
We have new technologies like Voyager and Elevate (expandable cages). We also made investments in bigger platforms like Solera and posterior cervical systems to address the entire market needs. We have also focused heavily on new procedures such as MIDLF and OLIF.
OTW: Medtronic Spine really pioneered via StealthStation the field of intelligent assist devices for the OR. How does this new generation of so-called surgical robots differ from StealthStation?
Doug King: There is a new generation of surgical robots moving forward. I think they are the perfect complement to surgical navigation.
It’s not about a single technology. It’s actually about seamlessly integrating images from an O-Arm, developing a preoperative plan, utilizing a surgical assist arm under the surgeon’s direction to navigate, and executing to the surgical plan to create a consistent, predictable and reproducible outcome.
Our mission is to transform spinal outcomes and we are in a unique position to do this.
OTW: How comfortable do you feel about people calling these “robots?”
Doug King: Our industry has labeled these as “robots” and that’s fair. Mazor refers to theirs as a surgical assist arm and yet in the next sentence I will read something about Mazor “robotics.” We look at it as a combination of this surgical assist arm with information fed from imaging to develop and navigate your optimal plan.
I think it’s the combination of this data that helps perfect the ability of a surgeon to perform spinal procedures and improve outcomes in the future.
OTW: In general, when a hospital is evaluating whether to add a robot assist device for spine/neuro surgery, what are the best questions they can ask in order to make sure they not only make the best purchase decision but, if they do purchase a Mazor system, it meets their objectives?
Doug King: To start with, we are banking on Mazor’s proven history and experience combined with our decade of knowledge and leadership in imaging and surgical navigation to make the case with our customers that these systems will help deliver high quality care and more predictable outcomes; potentially with less variability in the way procedures are done today. We will ultimately help surgeons drive workflow efficiency and reduce overall costs. I think those are all factors which any hospital evaluating these systems should consider.
OTW: These are expensive machines with high maintenance costs. How much of the purchase decisions are being driven by ROI (return on investment) requirements and how much is a marketing decision?
Doug King: It really depends on who you talk to at the hospital. But yes, overall administrators think about these as important and strategic capital purchases.
Medtronic, of course, wouldn’t be engaging in these systems if they didn’t believe that they would drive economic and clinical value.
Medtronic is on the leading edge of looking at the entire healthcare system and being part of the solution. We focus on ways in which we can enhance quality and reduce costs as part of the equation. There seems to be an overwhelming amount of interest in what robots can offer today. So, it’s not a purely financial decision. No one wants to be responsible for a capital purchase that gathers dust in the corner. We must drive real utility and value for all stakeholders who acquire these systems.
OTW: In its current form and cost structure, where do surgical assist devices like the Mazor system fit in well and where do they NOT make sense?
Doug King: We ask ourselves that same question.
Intuitively you’d say that any hospital system whose volume of patients is on the medium to high end would be a candidate. What is surprising to see in the case of navigation are the number of academic centers who make the investment and use the system as part of their teaching.
A resident/fellow who is trying to learn pedicle screw trajectories, for example, can use navigation to visualize and verify.
In addition, there is a whole subset of hospitals that are looking to grow, attract more patients and while they may be smaller in terms of beds or patient volumes, they see it as an opportunity to expand their programs and demonstrate a commitment to cutting-edge innovation.
OTW: Surgical assist devices, aka robots, are new to healthcare. But they are, in fact, old hat in manufacturing. While about 4,600 “robots” are in hospitals, over 1.6 million equally complex robots are used in industry. Maybe some of your manufacturing people could teach surgeons and hospitals how to integrate humans with these intelligent systems. How is Medtronic tackling integration of people with “robots”?
Doug King: Everyone is wondering why robots have not been more widely adopted in healthcare.
Due to the regulatory climate and the human interface there must be harmony between the two—don’t want technology to outstrip the capabilities of the human interface/patient doctor interaction.
Clearly there are things a robot can do with refined motions and techniques that even in the best of hands probably can’t predictably do 1,000 times in a row.
Ideally, these systems will make it more efficient for the surgeon, more optimal for workflow and can gather multiple data points to enhance a particular procedure—but always in the service of the surgeon and the patient.
I am dumbfounded when surgeons say ’Doug, you want a robot to deliver a guide wire or a pedicle screw.’ I chuckle because that just scratches the surface. Why have an environment where a pedicle screw is not placed optimally when you have navigation and a surgical assist arms that can pinpoint it within a millimeter of accuracy? We are in the infancy of what is possible.
OTW: In five years, how will the technology evolve? Ten years?
Doug King: We have not defined the ten-year roadmap yet.
Our focus today is about what a surgeon can do for a particular patient.
Our commitment in the near term is to drive utility, value and improved outcomes.
Think of a future where every patient’s anatomy is specific to them…and the ability of our systems to map bony anatomy and differentiate neural from vascular structures…is incredible to think about…and that informs the movements and capabilities you can potentially perform with a surgical assist arm.
Think about the number of passes made with instruments—in and out of the operative site and this is where we get excited about workflow and efficiency in the OR.
The possibilities are endless.
OTW: Will these systems deliver lower costs and greater productivity to hospitals?
Doug King: Let me first start with another cost consideration. As we execute our plans and Mazor produces higher quantities you would assume that costs of production improve.
In the marketplace I think pricing will largely be driven by value…what can this do for me and my patients? There will be opportunities for cost improvement over time, but there may be more value in what you could be avoiding in terms of complications and revisions, and raising procedure predictability.
Now, looking at hospital productivity, we do think they help to improve workflow and improve overall costs.
OTW: Will these system lead to more outpatient surgeries?
Doug King: I think so.
We are seeing a tremendous amount of interest from doctors and hospitals in ambulatory surgery centers (ASC) and specialty hospitals. The complexity of procedures will dictate the type of enabling technology needed. In conversation with doctors we have learned that they want robots as part of their ASC.
We need to determine the role robotics will play in these settings and create efficiencies to justify the cost.
OTW: Would it allow an ASC to tackle more complex spine surgeries?
Doug King: It could. If we can demonstrate (and Mazor is working on clinical evidence of this) that clinical outcomes using the Mazor system are comparable to an open technique, then it could.
OTW: Will these systems ultimately lead to a surgery without surgeons?
Doug King: I doubt it.
Human judgment is needed for patient selection and full consideration must be given to each patient’s condition. Surgeons will develop a plan preoperatively then use this technology to help execute the surgical plan with greater reliability.
OTW: Thank you very much Doug. This all very exciting. Look forward to seeing you and all these new systems at NASS in Orlando.
