{"id":24986,"date":"2017-11-15T19:49:22","date_gmt":"2017-11-16T00:49:22","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/digitalization-of-surgical-intervention\/"},"modified":"2017-11-15T19:49:22","modified_gmt":"2017-11-16T00:49:22","slug":"digitalization-of-surgical-intervention","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/digitalization-of-surgical-intervention\/","title":{"rendered":"Digitalization of Surgical Intervention"},"content":{"rendered":"

Over the next decade, robotic enabled surgical procedures will disrupt and displace market share of the largest surgical instrument producers.\u00a0 As the adoption of medical robotic systems grows due to improved surgical efficacy over manual techniques, their electronic instrumentation will help digitalize the current supply chain of surgical instruments in the hospital.\u00a0 These robotic instruments allow for hospital personnel to track the number of uses, location in the facility, and cleanliness of each surgical device in a way traditional medical device companies have not been able to.\u00a0 Johnson and Johnson (J&J) sold $25.1 billion of medical devices in 2016[i]<\/a> and commands 13.7% of the medical device market.[ii]<\/a>\u00a0 If J&J does not respond to the threat of surgical robotics and digitalized surgical instruments, it will lose its foothold in the operating room supply chain and medical device segment which fuels 37% of its total revenue.[iii]<\/a>[iv]<\/a><\/a><\/p>\n

\"\"<\/a>The largest robotic surgery company, Intuitive Surgical, has grown to $43.94 billion in market capitalization since introducing its first robotic platform in 2000.[v]<\/a>\u00a0 The majority of its revenue comes not from the capital equipment, which can cost upwards of $2.5 million each, but from the instrumentation the system uses to interact with patient tissue.\u00a0 Unlike manual surgical instruments, robotic tools contain RFID chips to track lifecycle depletion, storage in the hospital, and stage of reprocessing between surgeries.\u00a0 If there is\u00a0contamination to the patient, a robotic tool can quickly be scanned to determine the specifics of its cleaning process and isolate the source of the problem.\u00a0 After a predetermined number of procedures the device no longer allows the system to use it, triggering an alert to surgical staff and a purchase of a new surgical device by hospital inventory managers.\u00a0[vi]<\/a><\/a><\/p>\n

\"\"<\/a>As robotic companies have introduced electronically tracked tools, medical device giants J&J, Medtronic and Stryker have had differing approaches to responding to the threat these companies pose to their instrument businesses.\u00a0 Stryker acquired Mako Surgical for $1.65 billion[vii]<\/a> in 2013 for its total knee replacement robot, which is only compatible with Mako proprietary digitalized instrumentation.\u00a0 Medtronic, in contrast, is attempting to design and launch its own robotic systems to use its surgical instruments in 2018.\u00a0[viii]<\/a><\/p>\n

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Recognizing the importance of the robotic surgery sector, Johnson and Johnson has taken steps to enter the space. In the short term, it paired up with Google to create Verb Surgical, a joint venture aimed at digitalizing surgery.[ix]<\/a> This partnership will combine Google\u2019s expertise in data science with J&J\u2019s advanced instrumentation to create future robotic platforms with traceable tools.\u00a0 As of 2017, Verb announced early prototypes of their system: \u201cThe digital surgery platform included all elements of the company\u2019s five technology pillars \u2013 robotics, visualization, advanced instrumentation, data analytics, and connectivity.\u201d[x]<\/a>\u00a0 The platforms that Verb creates will automatically track tool usage and sterilization of the devices as well as integrate with operating room supply chain management software.\u00a0[xi]<\/a><\/p>\n

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In the long term, J&J has started purchasing companies like Neuwave Medical in 2016[xii]<\/a>, which has developed a minimally invasive soft tissue microwave ablation system with applications in the lung.\u00a0 This acquisition foreshadows robotic intervention in early stage lung cancer, which is the leading cancer killer in the United States.[xiii]<\/a>\u00a0 Many are betting that this application will be the next focus of the robotic surgery industry.\u00a0 If this is the case, next generation flexible devices built for these robotic platforms will track usage and hospital cleaning to stop defective devices from making it into the surgical suite.<\/p>\n

Johnson and Johnson has invested heavily to make up ground in the robotic surgery sector.\u00a0 In addition to the partnerships and acquisitions it has made, J&J should sponsor university affiliated robotics labs and hospital research groups in the field.\u00a0 Supporting research will promote new development in the space and improve visibility into developing technologies giving the company an edge over its competitors.<\/p>\n

Additionally, J&J should consider purchasing pre-product instrument tracking companies for their intellectual property (IP).\u00a0 The medical device industry relies heavily on patents to protect businesses and products.\u00a0 Building a robust IP portfolio could prevent market competition and prove useful in the design of its own systems.<\/p>\n

Lastly, the medical device giant should start building RFID tracking into its existing instrumentation.\u00a0 Providing information on the supply of manual devices to the operative environment could improve outcomes and provide analytics on current hospital practices.<\/p>\n

Two further questions in the context of this organization are as follows:<\/p>\n