Health care innovation: Barriers and opportunities

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Intellijoint Surgical is a great Canadian success story. It all started when co-founder, Armen Bakirtzian, came up with an idea for a product to make hip replacement surgeries more accurate while he was an engineering student at the University of Waterloo.

“This was in response to a medical problem highlighted by my father, who is an orthopedic surgeon,” says Bakirtzian. “I teamed up with two colleagues, Richard Fanson and Andre Hladio, and pitched the idea at Ontario’s Next Top Young Entrepreneur Start-Up Pitch Competition in 2010. We ended up winning.”

For the pitch competition, Bakirtzian and his colleagues put together a straightforward problem statement: surgeons make mistakes, which is both detrimental to patients and costly to the health care system, and there’s a need for technology that makes surgeons more accurate. This idea formed the basis for Intellijoint Surgical’s flagship product, Intellijoint HIP, which has since received rave reviews from orthopedic surgeons and patients.

But there’s a hitch.  Despite Intellijoint HIP’s proven efficacy in enhancing joint replacement accuracy, and strong uptake in foreign markets, you’d be hard-pressed to find the technology being used in a Canadian hospital.

“We only conduct about three per cent of our surgeries in Canada,” says Bakirtzian. “There are two hospitals in Canada using Intellijoint HIP, but that’s because the federal government bought the product for them.”

The issue isn’t that doctors don’t want to use the product. Instead, the challenge is that Intellijoint HIP raises the cost of surgery. It’s a challenge for hospitals to pay for the added expense, even for those innovative technologies that might improve outcomes for patients, and save the health care system significant sums over time. “Administrators might truly want the best for patients, but there is a misalignment of financial incentives that doesn’t support that behaviour,” says Bakirtzian.

Intellijoint HIP has a low fee-per-use purchase model, and ensures accuracy for both replacements and revisions. Intellijoint HIP provides quantifiable measurements that enable the proper angle at which the artificial cup (one component of the hip implant) is positioned within the pelvis, equalization of leg lengths and offset, and identifiable hip centre-of-rotation. This removes the need for surgeons to use bones as landmarks, or to simply eyeball and guess.

This is a big deal, given that up to 62% of cups are not placed within a predetermined target range using manual techniques, and that instability and dislocation are the leading causes of revision surgery, which can be a direct result of implants not being positioned properly. According to the Canadian Joint Replacement Registry 2017 Annual Report, acute care costs for revision total hip replacement are over C$13,700, which is 56 per cent more than a hip replacement, and does not include physician fees or other services like rehabilitation required during a standard 90-day episode of care.

Because revision procedures are costlier than the initial surgeries, and add additional risk and inconvenience for patients, there should be an incentive to invest in a technology that improves accuracy and reduces readmissions. Unfortunately, Canada’s health system silos and reimbursement structures don’t currently incentivize investments that address issues such as this, despite the broader system savings and improved patient care it would provide.

“Everyone responds well and predictably to financial cues and incentives, and if we get those financial incentives right, we can really affect meaningful change,” says Ken Spears, Boston Scientific’s Canadian country director and regional vice-president. “The big takeaway from Harvard economist Michael Porter’s work is that organizing incentives around treatment outcomes that matter to patients is how we drive the kinds of changes that create a high-performing, fiscally sustainable health care system.”

The potential benefits to the health care system of Intellijoint HIP are significant. The technology not only makes redos themselves safer and more accurate, but can also reduce the need for revisions in the first place. Sadly, hospital readmission costs – and the personal distress caused by hip instability or dislocation, implant loosening, leg length inequality, and premature implant wear – aren’t taken into consideration at the time of purchase.

“There are a number of examples in Canada similar to Intellijoint’s,” says Spears. “Hospitals and procurement groups are operating within the same system as are technology firms. We all need the system to change in order to bring innovative new solutions to patients. That means creating new funding mechanisms that cut across silos and tie the cost of care to meaningful patient outcomes. Until that happens, purchasers and hospitals are limited in how much innovation they can facilitate access to.”

In Canada, Intellijoint is making progress with the Waterloo Wellington Local Health Integration Network, in part because they had an innovation department.

“They’re considering purchasing our technology because we have real-world evidence in surgery in other countries,” says Bakirtzian. “It’s a little backwards. You need to be successful outside of Canada to prove to Canada that you’re successful.”

Despite the lack of success in getting its technology adopted in Canada, all of Intellijoint Surgical’s research and development is still done here, and every piece of an Intellijoint product flows through its head office in Waterloo.

“If we don’t champion this in our own country, then who’s going to do it?” says Bakirtzian. “We have a passion for Canada. We’re trying to create an environment that supports the adoption of innovative medical solutions, and we feel strongly that our offerings and technologies significantly benefit patients and the health care system.”

The risk for Canada is that many innovative health care technology companies will be tempted to take the easy way out, and move to where they can be closer to their customers. Part of the difficulty lies with the fact that Canada has always seen health care as a cost area, eating into budgets, and not as an economic driver.

But it isn’t all bad news – some positive change appears to be on the way.

“We’re making headway in Ontario,” says Spears. “Ontario’s bundled care pathway for orthopedics is a great example of a program that will probably bring about positive change. For the first time ever, funding for hip and knee replacement surgeries cover 90 days post-discharge and take patient-reported outcomes into consideration. By getting hospital and community-based care providers under the same financial umbrella and coordinating their efforts, we might even create the kinds of incentives that lead to adoption of technologies like Intellijoint’s.”

Tim Wilson is a freelance writer who wrote this piece on behalf of MEDEC – the association representing Canada’s Medical Technology Companies.