The end of Big Ortho dominance
There are few circumstances that have the potential to dislodge Big Ortho’s dominant grip on our industry.
Let me share one specific blind spot that could be the Achilles heal for Big Ortho.
The top 10 orthopedic companies today are: Stryker, DePuy-Synthes, ZB, S+N, MDT, Arthrex, DJO, NUVA, Wright Medical, OFIX. They control the world market… most of the implants, instruments, capital equipment and disposables. Life is good for Big Ortho companies as they manage millions of products worldwide on a daily basis.
So what do these top 10 incumbents actually have that keeps them in power? (hint: it’s not technology or innovation, it’s scale.) It can be boiled down two areas:
#1 – Big Ortho provides a huge selection of product choices.
#2 – Big Ortho provides armies of sales people.
Today, Big Ortho has all of the leverage with hospitals and ASCs, because of their immense product selection, endless inventory and ubiquitous rep service. Surgeons are hooked on “inventory choice”. Hospitals are hooked on the service. The sales rep is the delivery mechanism for the equipment. The sales rep is also the technical help in the OR.
The Big Ortho business model engine works today because the surgeon has been conditioned to believe that he needs options. It all hinges on product choice options. This psychology is responsible for driving a massive inventory network of implant sizes, constraints and specific instruments simply to treat a specific patient.
The blind spot
What happens in the future when the surgeon expects a single implant produced for a single patient?
Think about the perfect implant with the perfect instrumentation for a single patient. 100% of the time. Just waiting for the surgeon in the OR.
There are no choices now.
You don’t need a sales rep to manage all those implant boxes and instrument trays. You don’t need a rep in the OR because the implant always fits. The device manufacturer doesn’t need people to handle materials. When choice is eliminated, the orthopedic company of the future becomes less a device company managing materials… and more a software company managing data.
So when will this happen?
Gradually and suddenly. As with all new technologies, our orthopedic comrades will not notice this slow technology sea change. Then one future day in March at an AAOS meeting, it will appear that this shift is obvious. It’s just human nature to underestimate long-term change brought by a disruptive technology, then whammo.
Will Big Ortho adapt or die?
Time will tell. See you at AAOS in the future.