You know what a hospital operating room looks like—at least from TV shows. There’s the surgeon, of course, maybe a surgical resident, nurses, a scrub tech, the anesthesiologist, maybe a few aides; some students, if it’s a teaching hospital.
But an actual modern hospital operating room probably has someone you never see on television: a medical device company representative. The device might be a special saw or probe or other tool for the surgeon to use; it might be a device being implanted, such as an artificial hip, knee, or mandible; a pacemaker—even, lately, internal braces to stabilize someone’s spine.
The toolkits for some of these devices might include dozens of wrenches and screws. The surgeon may be using the device and the kit for the first time. The medical device company representative quite probably knows more about the device and its insertion than anyone on the surgical team.
Obviously, in the time of the coronavirus, it’s a plus to have as few people in the OR as possible. But even in non-Covid times, it’s inefficient to fly these company reps around the country to observe and advise an operation that might only take an hour. And so, in a handful of ORs, you’ll see something else—one or more cameras, mounted strategically, and a flat-panel screen on a console, connected to a remote console. The medical device rep—or a consulting surgeon—can be a thousand kilometers away, controlling the cameras, looking at an MRI scan, and making notations on their tablet that can be seen on the one in the operating room.
It’s telemedicine for the OR, and it’s the brainchild of my guest today.
Daniel Hawkins is a serial inventor with well over 100 patents to his name and a serial entrepreneur with several startups to his résumé. His latest, is the one whose system we’re taking about today, Avail Medsystems.
Daniel, welcome
Daniel Hawkins Thanks for the opportunity, Steven. Happy to be here.
Steven Cherry Daniel, I didn’t know anything about these medical device reps. I gather they’re often part of the marketing or customer support teams at their companies, but they undergo some real surgical training before they start advising doctors.
Daniel Hawkins They do, in fact, Steven, typically the training regimens are several weeks, if not several months long, and then after they complete those training regimens, they’re required to travel with somebody very experienced in the operating rooms and they get what was initially a didactic training in the classroom setting or possibly even cadaveric lab setting, then converts to real-world settings in operating rooms where their teacher, if you will, has been on the job for an extended time period. And does a teacher mentor kind of a training session on an ongoing basis for several weeks, if not a few months, with a representative before they are turned loose.
Steven Cherry This isn’t just Zoom for operating rooms. The cameras, for example, aren’t like the webcam in my computer.
Daniel Hawkins No, they’re not. These are, in fact, 30x optical-zoom cameras. I can confidently say there’s not a camera on the planet that we haven’t tried! And have ultimately chosen a pair of cameras that have incredible clarity, color-balancing, and appropriate low-level-light image-capture capability. Because in operating rooms you need all of those things. The remote individual being a sales rep or a trained physician in an open surgery needs to have crystal clear images of the tissue that they are operating on. And color and color balancing, white-balancing, and tissue-plane identification are really relying on high-end optical clarity.
Steven Cherry The cameras were just one of the engineering challenges you faced.
Daniel Hawkins We are requiring high-definition audio and a high-definition video at a local source, meaning the operating room. We’re transferring that via a HIPPA-compliant, fully-encrypted Internet connection, bouncing off the cloud and then down to a remote participant, being the industry representative or possibly an advising surgeon could be across town and across the country or across the globe. And our system is designed to have latency of less than half a second. Now, of course, we’re dependent on the quality of the local and the remote Internet connections. But before we install a system, we care for the local issues with provisioning of the network in the hospital.
Steven Cherry Another challenge was the business model. There’s a hundred thousand dollars worth of equipment here, but your solution doesn’t involve customers shelling out that money.
Daniel Hawkins That’s right, I’ve been, Steven, twenty-six years in the medical device business and one of the first capital equipment businesses I was involved in with within health care is actually The Da Vinci surgical robot produced by Intuitive Surgical. That’s a two-million-dollar robot. Be it two million dollars, two hundred thousand dollars, or even two thousand dollars requires extensive approvals inside of hospitals to go through a capital acquisition process and model. And that really would delay our commercialization if we required that to get our systems placed. We decided instead to pursue a very aggressive model, inasmuch as we’re not charging at all for that hardware. We’re not charging a capital cost, we’re not charging a lease. We’re not even charging for the upkeep and maintenance or technical support. It’s fully free of charge to the hospitals from a capital perspective. What we do instead is market the utilization of the these systems in a fee-for-service based on time.
Steven Cherry In some sense, your customer is also the medical device manufacturer.
Daniel Hawkins Yes, we’re really a two-sided network. The first side, of course, is placing the consoles in hospitals or ambulatory surgery centers where we generate our revenues from the fees paid by the remote participant. And in the vast majority of cases, that is, in fact, the medical device manufacturer, that is the Johnson and Johnson or Medtronic or an Abbott or Boston Scientific. The variety of medical device companies have an aggregate of over 100 000 sales reps and clinical specialists. Those are folks that are somewhat like sales, that they don’t have a sales quota. Their whole job is to support procedures. There’s 110 000 just sales reps and probably something similar in the clinical specialist field force. These people need access to operating rooms every day. They waste an extraordinary amount of time driving between their different customers from one hospital to the next and waiting for a procedure once they arrive at the hospital waiting for the next procedure. The estimates are about 50 percent of their time is wasted in logistics. You can have a significant increase in the efficiency of time spent supporting your customers, those customers being the surgeons who were conducting the operation.
Steven Cherry We think of the remote experience as being inferior, but it seems there are some advantages here. For example, being able to look at scans more easily.
Daniel Hawkins That’s a great way of thinking about it. There are really a number of advantages. In an operating room, when you go as an industry representative to help a surgeon through the specifics of using some type of a device that you’re representing, you have to observe what’s called a sterile field—kind of an imaginary bubble that extends probably six or eight feet around every dimension of the operating table. That means you need to stand back. If you’re standing back, it’s kind of hard to see the operating field itself. And you can’t point to anything unless you use a laser pointer, which is a common tool in many reps bags.
And you also can’t really annotate or draw on a screen—if you kind of imagine there being a screen is displaying part of the procedure, could be from a moving X-ray called an angiogram if it’s an angioplasty placing a stent in the heart, or it could be a screen with a full video image, if it is a minimally invasive surgery procedure; it’s called laparoscopic surgery. And you might want to actually point something out to the surgeon. You can’t really do that with a tool that would allow you to draw and really point something out. Those are two examples of things that we solve with the Avail system. But because of the nature of our cameras and our console, you can actually get a better view of the operator field using our system than you could get if you were physically in the room. Our cameras, one of them is on a boom arm, is positioned over the operating field and you were able to see directly down under the operating field and zoom down and quite literally count the eyelashes on the patient if you wanted to do that. The level of of visual acuity is quite impressive. We also get an ability for somebody remote to draw on the screen, almost like you might see on Monday Night Football.
Steven Cherry So is there an increased interest in your system because of the pandemic, or maybe less so because so much in hospitals is on hold while they deal with that one overriding problem?
Daniel Hawkins That’s a great question. The fundamental issues that we’re solving have existed for forty years. Medical devices, have always been supported, trained, and introduced in person. And that’s a challenge. In fact, somewhere between 25 percent and 100 percent of cases require physical presence from industry. Some procedures like angioplasty, about one in four times, there’s a physical person in the room from a medical device company. For pacemakers, they’re actually not implanted unless there’s somebody in the world because the medical device representative is integral to the procedure. The pandemic shone a spotlight on the issues of access and needing that access. And interest levels, Steven actually went up. The awareness of the need for those people in the room against the restrictions of being able to come into the hospital made it very, very apparent that a remote capability was needed.
Another thing happened that was really interesting. What was otherwise an assumption—that health care needed to be delivered in person—that presumption has been shattered in dozens and dozens and dozens of medical device companies have approached us and we are under contract with several dozen right now.
Steven Cherry Daniel, you have something like one hundred and fifty patents. Your last startup, which I guess you’re still an adviser to, took some medical techniques that were well-known in kidney stone treatment and applied them to arterial plaque. None of this seems like the kind of thing that somebody would come up with if their degrees were from Wharton and Stanford in business and management.
Daniel Hawkins So I have been, in many respects, a medical device junkie for a few decades here, 26 years in total. But really, my interest stems even prior to that. My father was a physician. I grew up around medicine. I also grew up around entrepreneurship. What I really sought was a way to combine the two and didn’t know much about the medical-device industry. But what I did understand is I really thought the tools that surgeons used were pretty interesting.
When I was an undergraduate, I actually attempted to pursue a joint undergrad Wharton and premed degree. And thankfully, the deans of the schools made a different recommendation for me and suggested I take one. I knew I didn’t want to actually be a physician, but I did know that I wanted to be involved in health care. And after business school, I got involved in health care immediately. Really, I didn’t have any patents at all until 20005, I believe it was.
I joined a couple of engineers in an incubator of sorts and our task—we were sponsored by actually venture firms—our task was to create new medical technologies for disease states that were underserved. And they showed me how to invent is probably the best way to describe this, Steven. And after that, I was hooked. It was it just became something where I would observe there’s an issue. And by the nature of that process of incubation, I was the idea guy. I was the one who was trying to find the unmet needs. I would see those. And that means but what I would hear from the engineers I was working with is so many different types of solutions that could be brought to bear in. The beautiful part about that was actually that I was just informed enough to ask the question and just ignorant enough to not stop myself from wanting to pursue it.
Steven Cherry My grandmother was a doctor and, like your father, her office was downstairs in the house I grew up in, but I don’t have scores of medical-related patents, so I knew there was more to this story. You are also an executive at Intuitive Surgical, which makes The Da Vinci surgical robot. In some ways, the Avail system backs away from robot-aided surgery. Why did neither of your recent startups go further down the robotic path?
Daniel Hawkins Really, robotics is a … it’s fascinating … It’s absolutely fascinating. And I think it’s frankly undertapped. There’s a level of expertise that is needed in robotics that I simply don’t have. Having said that, I am an adviser to a brand-new robotic surgery company that is really just incredibly interesting, what they’re working on that—not at liberty, to talk too much about it.
Steven Cherry Getting back to Avail, it would seem helpful for a rural community, say maybe where there’s no surgeon at all, but a doctor or even a nurse practitioner needing to perform a procedure for which they need trained guidance. Is their interest outside of big hospitals in big cities?
Daniel Hawkins There absolutely is. Rural applications, I think, are very relevant. As are military surgery centers. And, you know, there’s many different use cases. And in some ways, I’d encourage you to think of what we’re doing as a telecommunications platform. We are connecting expertise from outside of the procedure room and delivering it to insert the procedure room. And that means really anyone who is an outside expert can clinically contribute to a surgery where somebody might have incrementally less expertise.
It’s also relevant for ambulatory surgery centers where there tend not to be five or six or seven surgeons in a practice group all working the same day at that same location. If there’s a case in a large hospital that a surgeon is working on and they have a question that they think one of their colleagues might be able to help out, they’ll ask a circulating nurse or a technician to call doctor so-and-so. And that physician, if they’re otherwise available, might put on a mask and a pair of gloves and come in and have a look. And they might consult for five minutes or 15 minutes. That’s incredibly valuable and it happens all the time.
Steven Cherry I can imagine the expertise flipping around. This seems like a good tool for observing an operation, if you’re a student at a teaching hospital. Better than being maybe dozens of feet away in the theater.
Daniel Hawkins Absolutely true. In fact, we’re working with a couple of medical universities where they’re actually interested in revamping their curriculum to solve exactly that problem. The issue being that there might be a dozen and a half or two dozen surgeon trainees and they’re circulating around an operating rooms trying to observe what they can. But as a practical matter, it really can only have two maybe at most three trainee surgeons, if you will, in an operating room at any given point in time to observe. Past that it becomes difficult to see and didactically a lot more challenging.
What about outside of medicine? I can imagine a complex engine repair on an oil rig in the Arctic, for example.
Daniel Hawkins Most certainly our technology is not really dependent on the content of what it’s doing. The capability is really universal for anything that involves audio and video. It has been proposed for that type of a remote repair setting that you just described. It’s actually been proposed to be used in hospitals in a similar fashion where the repair of an MRI machine would be consulted by the repairing … the manufacturer, if you will, would consult the biomedical engineer in a facility who’s pointed the cameras at the MRI machine and they can be walked through the steps. You know, for the remote that you just described out in the Arctic, one of the interesting use cases that we’re actively exploring is a military application where one of our units might be on a Marine vessel. As long as they’re able to get a satellite Internet connection. We’re talking about the military so that should not be an issue.
Steven Cherry Well, Daniel, that’s a pretty creative solution to a problem I think most of us didn’t even know existed. I’m sure hospitals and medical device reps are grateful for it. And I’m grateful for your joining us today.
Daniel Hawkins Thanks very much.
Steven Cherry We’ve been speaking with Daniel Hawkins, founder of Avail Medsystems, a startup that’s moving telemedicine from the doctor’s office to the hospital operating room.
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