Today’s Orthopedic OEMs are faced with some significant challenges:
The ongoing shift of US orthopedic joint replacement procedures from inpatient to outpatient facilities presents new challenges for the industry. Outpatient clinics are faced with lower reimbursement from payers and are therefore compelled to improve overall operational efficiency and provide high performance implants at a reduced cost for the healthier patients they see.
Surgeons rightly demand high service levels from their OEM implant makers. However, inefficient supply chains and reliance on traditional materials and manufacturing methods hindering automation require OEMs to maintain 12 months of inventory at significant cost. Large inventory builds required for launch also slow new product introductions.
Lower procedure reimbursement at outpatient centers and limited clinical differentiation among implants are driving industry pricing pressure. Further contributing to the profit margin squeeze are the higher costs of implants featuring high-performance materials.
We saw these OEM cost, performance and efficiency challenges as our opportunities. Mach Medical was formed to develop and connect key enabling technologies into a coherent manufacturing system, that we call high velocity, single-piece flow manufacturing, so that high performance, lower cost cementless implants that are size-specific to the patient can be made and delivered in time for the patient’s surgery. This approach can cut inventory requirements by 80% and reduce cost of goods by up to 47%. When combined with our unique design transfer to manufacturing process, that we call High Velocity Manufacturing Transfer, we can also decrease new product time-to-market by 1-2 years.
Revolutionary? Well, we think so. And solving for the outpatient surgery center problems also addresses cost and efficiency issues for inpatient hospitals as well as lower cost markets elsewhere in the world.