How will COVID effect the US orthopedic industry?
Short Answer: There will be a temporary economic downturn followed by a boom. Meanwhile there will be a big disruption to how we all work, with some permanent changes.
People don’t understand exponential math or log scales. Based on algorithms, the coronavirus will reach half of the people in the US this year. It is doubling every 3 days in the US. It is very contagious and it has a long incubation period so people who feel great can spread it unknowingly. Most models predict a peak deaths in the US in late April.
Here is a quick video lesson on viruses and exponential math.
REDUCTION IN WORKFORCE – Elective surgeries are being postponed indefinitely across the globe. Many Orthopedic companies have proactively planned for their worst case scenarios and reset their expense line to protect employees, customers and investors. Companies who want to cut payroll expenses will use one of three tools – layoffs, furloughs and salary reductions (usually 20% salary reductions). Read – The early COVID impact on Orthopedics companies
MEETINGS – One of the biggest effect on the orthopedics industry, will be the way we conduct business. We will all learn physical distancing. We will work for some period. There will be very few face-to-face meetings. All ortho conferences and most large gatherings will be cancelled. Proactive ortho conferences will go online. Example: I just attended the COVID-19 Virtual Summit April 2-3 with 4,000 online attendance.
SERVICE – OK, here is the big one… Sales reps will be banned from attending surgeries in many hospitals/ASCs. “We will let you delivery product through the back door, but you cannot attend surgery.” Most hospitals will have separate COVID sections that will be strictly controlled. Hospitals will screen EVERYONE who walks in.
Personal story: During the SARS epidemic (another coronavirus strain), I remember traveling to London Ontario in early 2003. I received permission to enter a single door at Victoria Hospital since I was the technical support for a surgery with a brand new device. There was only one way in or out. I had to complete a questionnaire about my travels upon entering, but I passed. The surgery was performed in an empty hospital. Victoria Hospital only allowed critical doctors and nurse inside. No family allowed in. It was an eerie experience.
SURGICAL TRAINING – Training in large groups will disappear for a while, but there will continue to be some small surgical training by some device companies. VR surgery training companies will become very useful starting in 2020.
SUPPLY – Not really an issue. Fortunately most orthopedic manufacturers do not rely heavily on Chinese supply companies. Even if they do, this is temporary blip in supply chain. Chinese manufacturing will come back on line in late spring/summer.
WORK – Tens of thousands of orthopedic industry professionals will work from home for the first time and we will discover that there is no real loss of productivity. Tools and advice are here.
HIRING – Growing orthopedics companies still need talent, but hiring will slow down. Many will go through the motions of interviewing. There will be a permanent trend towards more video interviews.
Surgical Procedure Impact
Regarding surgical procedures, people still need to have many musculoskeletal surgeries and and, of course, emergency trauma surgeries. Most true “elective” musculoskeletal surgeries are postponed. There should be a Q3/Q4 boom in elective surgeries after we pass through the ICU usage peak in April. The rescheduling process will start in late May.
The ortho companies best positioned the weather the economic dip are those whose customers are ASCs and trauma centers, and those companies who make single-use sterile packed kits that can be shipped directly to the hospital OR.
For the Big Orthos, this is a double whammy – lower sales + lower stock price. Financially, company revenues will be hit in Q2 and Q3 as procedure volumes will dip. Analysts are predicting sales will be down 4%-18%. Any postponement in elective procedures will be an uptick at a later date. Opportunistic companies will have a record Q4.
In some ways, this epidemic will make the surviving ortho device companies even healthier. Orthopedic companies will learn to deliver services with less human touch. Orthopedic companies will finally get serious about how to conduct day-to-day business remotely. More meetings will be conducted over video or audio calls. Employees will learn to work effectively from anywhere. Ortho sales and service will learn to better service hospitals/ASCs in a more streamlined way. VR surgical training will get a boost. Virtual Home PT will get a boost. Hospitals will become extra protective of not passing infections from one patient to another during this time period. We will all learn better hygiene. Hospitals/ASCs will learn to support cases without the sales rep attendance and many will permanently ban the reps. Startups like Avail with remote rep support will become very useful.
This is temporary. Let’s all suck it up, learn physical distancing, wash our hands and work remotely when we can, get creative to stay competive in the COVID era. For opportunities, read New Thinking in a COVID World. Get ready for the future boom!
How is the virus effecting your business? firstname.lastname@example.org
***Actionable Advice ***
written by: Dr. James Robb, a former pathologist at UC San Diego.
1) NO HANDSHAKING! Use a fist bump, slight bow, elbow bump, etc.
2) Use ONLY your knuckle to touch light switches. elevator buttons, etc.. Lift the gasoline dispenser with a paper towel or use a disposable glove.
3) Open doors with your closed fist or hip – do not grasp the handle with your hand, unless there is no other way to open the door. Especially important on bathroom and post office/commercial doors.
4) Use disinfectant wipes at the stores when they are available, including wiping the handle and child seat in grocery carts.
5) Wash your hands with soap for 10-20 seconds and/or use a greater than 60% alcohol-based hand sanitizer whenever you return home from ANY activity that involves locations where other people have been.
6) Keep a bottle of sanitizer available at each of your home’s entrances. AND in your car for use after getting gas or touching other contaminated objects when you can’t immediately wash your hands.
7) If possible, cough or sneeze into a disposable tissue and discard. Use your elbow only if you have to. The clothing on your elbow will contain infectious virus that can be passed on for up to a week or more!
What has Dr. Robb has stocked in preparation for the pandemic spread in the US
1) Latex or nitrile latex disposable gloves for use when going shopping, using the gasoline pump, and all other outside activity when you come in contact with contaminated areas.
Note: This virus is spread in large droplets by coughing and sneezing. This means that the air will not infect you! BUT all the surfaces where these droplets land are infectious for about a week on average – everything that is associated with infected people will be contaminated and potentially infectious. The virus is on surfaces and you will not be infected unless your unprotected face is directly coughed or sneezed upon. This virus only has cell receptors for lung cells (it only infects your lungs) The only way for the virus to infect you is through your nose or mouth via your hands or an infected cough or sneeze onto or into your nose or mouth.
2) Stock up now with disposable surgical masks and use them to prevent you from touching your nose and/or mouth (We touch our nose/mouth 90X/day without knowing it!). This is the only way this virus can infect you – it is lung-specific. The mask will not prevent the virus in a direct sneeze from getting into your nose or mouth – it is only to keep you from touching your nose or mouth.
3) Stock up now with hand sanitizers and latex/nitrile gloves (get the appropriate sizes for your family). The hand sanitizers must be alcohol-based and greater than 60% alcohol to be effective.
4) Stock up now with zinc lozenges. These lozenges have been proven to be effective in blocking coronavirus (and most other viruses) from multiplying in your throat and nasopharynx. Use as directed several times each day when you begin to feel ANY “cold-like” symptoms beginning. It is best to lie down and let the lozenge dissolve in the back of your throat and nasopharynx. Cold-Eeze lozenges is one brand available, but there are other brands available.
I, as many others do, hope that this pandemic will be reasonably contained, BUT I personally do not think it will be. Humans have never seen this snake-associated virus before and have no internal defense against it. Tremendous worldwide efforts are being made to understand the molecular and clinical virology of this virus. Unbelievable molecular knowledge about the genomics, structure, and virulence of this virus has already been achieved. BUT, there will be NO drugs or vaccines available this year to protect us or limit the infection within us. Only symptomatic support is available.