14 Contrarian Opinions on the State of our Industry.

Howdy, ortho world! This is going to be a series of short videos on my contrarian opinions on the state of the industry. So I'm no smarter than anybody else, but I'm independent. I talk to a lot of people and I see these shifts happening. You can feel the shifts in your bones right now. And I'm going to share a few hard truths about the industry. You can also read about this on, on OrthoStreams if you are a subscriber. So first, so today is actually the best day to launch a new orthopedic venture in the history of orthopedics. It may not seem like it, But there are thousands of unmet clinical needs that need to be solved. Surgeons reach out to me all the time. They can't go to the big orthos to develop these ideas, and they just sort of linger. There's not that many people that are really good at executing ideas. And so anyway, that said, there are just— there's 1,000 unmet needs that aren't being worked on. It's also, there's great talent out in the industry. A lot of people on the sidelines right now looking for something meaningful to do. There's endless virtual business tools that are available. You can create global teams for the first time ever. And so I think today is the best day to launch an orthopedic venture in history. So not everybody thinks that. So that's number 1. All right. Contrarian belief number 2, traditional sales models are outdated and highly inefficient. So we, we're all seeing this, but we don't really know why. Uh, the reliance on local reps, exclusive contracts, geography over real merit, uh, and incentives. Fragmented systems, just doesn't work anymore and it needs to be reinvented. A rep in every OR handling inventory just adds cost and doesn't help the customer or the device company. So we've gotta figure out how to do that. So that's number 2 is traditional sales models are out, dated and highly efficient. I don't know the answer, but somebody has got to reinvent this. Okay, contrarian belief number 3, and a lot of people are not gonna like this, especially the clinical data people. All clinical data is biased. So every clinical data study is crafted to create some narrative that somebody wants to say their product is better than another, their procedure is better than another, they are usually industry-sponsored or hospital-sponsored, and there is biases in every— in the way the studies are built, the way the data is collected, there is biases in the reporting, the analytical data at the back end, So all clinical data is biased, and probably more importantly, surgeons don't even make their buying decision based on clinical data any, any longer. They usually ask if there's clinical data involved, but the main thing they want to know is who else is using this product, not what their clinical results are. So number 3, all clinical data is biased. Number 4, contrarian belief. This is— I've written about this for years, but big ortho has completely abandoned innovation, and they've given up their R&D teams in exchange for control, safety, and a more predictable, like, 5% growth for their shareholders. The large firms are more interested in creating moats of access rather than innovating. Their R&D strategy has 100% become acquisitions now. And so I like to say they go to the racetrack, they watch which horse wins the race, and then they buy the horse. That way they don't have to invest in the care and feeding and training of a racehorse. They just buy the winner and they have so much cash on hand that's not, not an issue. So number 4, Vega Ortho completely abandoned R&D and we see this, we've been seeing this for years. Okay. Contrarian belief number 5, sales has really become the hardest part of building a new orthopedic company. It used to be the technical side, the regulatory path, building the team. Those kind of things, raising money. No, those things are easy compared to winning out in the marketplace. The little guys have no leverage. They have no contracts, no access. They can't afford a sales team. They usually start with 1 or 2 or 3 friendly customers and then they sort of hit the wall on scaling. I mean, the small companies reach out to me constantly asking for, you know, how do you build a sales force? We have a better mousetrap, but we can't really find customers. So anyway, number 5, sales has become the hardest part of building an orthopedic company from scratch. Okay, contrarian belief number 6, mergers and consolidation are stifling competition and breakthroughs in orthopedics. So as the big guys swallow up the little guys, there's less and less innovation that's happening. There's less competition. There is the dominance by the top 5 companies really controls everything. And there's no, it's similar to number 5, there's just no R&D happening any longer. They're selling, their existing products, figure out how to get those into the system. Meanwhile, they're looking at startups and figuring out which ones to buy, which is their R&D strategy. So this happens in every industry. Mergers and consolidation kills innovation, at least for now. Okay, belief number 7 is And this is— nobody likes to talk about this, but the unethical ties between surgeon and industry has just undermined trust. There's, you know, there's a history of kickbacks and royalties and under-the-table money. And it just never seems to go away. The DOJ swoops in and prosecutes companies every now and then. But The penalties are really not deterring anybody. And so, uh, number 7, these unethical ties between surgeons and industry really just is killing trust. The only shining, uh, part of the cloud here is that surgeons are not making the buying decision much longer. Like, 70% of surgeons are employees now. So this is probably going to go away. But it's still happening, especially in the smaller companies, and nobody likes to talk about it. So anyway, that's number 7, unethical ties between surgeons and industry. Okay, contrarian belief number 8, and this is one that I haven't heard other people talk about other than me, is GLPs. GLP-1s are a It's a miracle, it's really a miracle drug. It solves so many problems for patients, not only weight loss. And so what we're seeing is that patients on GLP-1s have better outcomes. They will, I think in the future we'll start to see elective surgeries going down because if you can drop 15% of your weight, you may not need a hip or knee replacement. Now shoulder is a different thing, or wrist, or elbow, but load-bearing joints, even maybe back fusions, should start to erode as I think 15% of Americans now are on GLP-1 and it's growing dramatically. So I really see this as a demand shrinker for the industry. So anyway, that's number 8, is GLP-1s can shrink orthopedic surgery demand. All right, this is contrarian belief number 9, that tariffs and supply chain issues are slowing growth and innovation. So this is like a second or third order effect, but I'm seeing this, uh, more with Anything made outside the US is having a big effect on cash flow of small companies like, companies like Max Ortho who make all their implants in India. It's completely killed their cash flow and profitability and they may have to give up on the US market. And then hospitals even, we heard from Joe Colonna who's, one of the leaders at the largest hospital system in Georgia, Piedmont. We talked with him on Bon Chat number 93. You can go back and look at that. But he's got, he literally has to find $30 million of tariff costs that he's going to have to find a way to offset in 2026. That's a big nut to crack. Even though they buy over $1 billion worth of supplies in their 22 hospitals, $30 million in tariffs is a lot. So I think this is going to have an effect on everybody, anybody that's buying things from outside the US. And it's not going to be permanent. It's a short-term thing. But everybody's got to work through this. And it's probably going to affect innovation, definitely going to affect profitability. So that's number 9 is tariffs. Okay, contrarian belief number 10, an overreliance on surgery and devices ignores natural healing or systematic causes. So, you know, I hear this all the time that when you're a back fusion surgeon, everybody that comes in the room looks like a back surgeon patient. When you're a total knee surgeon, every knee that walks in the office looks like a total knee replacement. This, I think the specialization of surgeons has blinded them to all of the, I mean, there's 50 to 100 possible therapies, regeneration, techniques, minimally invasive things that can be done to avoid burning bridges with a major, like a major joint replacement or back fusion. I actually, this is a huge trend in the US and I started a little side project called holdtheknife.com and we're trying to help patients who have been told they need a total knee replacement find other options. So number 10 is overreliance on surgery and devices that totally ignores natural healing or systematic causes. This one's not going away. Okay, contrarian belief number 11, product choice is overwhelming our customers and it's killing the industry. We give the, and I'm saying we, the medical device community is giving surgeons and hospitals way too many choices. There's too many sizes, too many implants, too many instruments, too many trays, and we're paralyzing our customers. Our customers' biggest challenge is labor and time and lower reimbursements. And at the same time, we're bringing in robots and, you know, 5 trays and You know, there's a new device every year that does the same thing. And so I'm on the bandwagon to help orthopedic startups to come up with simple, elegant solutions that have less surgery, I mean, less implants, less instruments, less steps, less material handling, less training for the hospital, less training for the reps. So, I believe that the simple, elegant solutions in the future will be just, have so few parts and so few steps that people will say, "Why didn't we think of that?" So anyway, number 11 is product choice is just overwhelming and killing our customers. Okay, contrarian belief number 12 is, Industry-driven innovations lack evidence and they prioritize profits over results. This has been going on forever. Every company brings out shiny new objects like robots and AI without any proven superiority. And, you know, it's just, once again, we're just killing, it's similar to number 11, we're just killing our customers with complexity. Without any evidence that anything is better. I blame the industry on this partly, and I blame surgeons for always wanting the new shiny thing. So, love to see, love to see better thought-out products that reduce complexity, at the same time have better clinical results. So, That's number 12. Industry innovations lack evidence and prioritize profits over evidence. Okay, contrarian belief number 13 is, you know, we've all heard that raising money has gotten really hard for the little guys. So, however, raising seed money and raising Series A is actually pretty easy. If you have a really good story. On the flip side, growth capital Series like B, C, D is just almost impossible. So little guys, it kind of goes back to number 1, it's the best time in history to start a company because the seed money and the Series A is there. The flip side is if you don't execute, you will not get any more money. You've got to do what you said you're going to do spend the money wisely and hit your milestones or you end up in the valley of death and you will not get more funding and you will dilute your company just to keep it alive. So anyway, that's 13. Seed money and Series A is easy. Everything else is really hard. Okay, last one is number 14. Contrarian belief number 14. Nobody can reduce the revision rate in total joints. I don't know what's going on, but I started in orthopedics in the '80s and revision rates haven't changed. We've got 40, 50 years of practice and clinical results with different designs and materials and minimally invasive approaches, anterior approaches, robots, nothing moves the needle with, in total joints. So nobody likes to talk about this. Everybody underreports their revision rates because a lot of times the patients get frustrated and they go across town to another hospital. So it's not tracked very well in the US. In places like, you know, Scandinavia and the UK, they have national registries that track this, and it's not changing. And so this is sort of a plea to fix the darn revision rates. There's no reason why we can't have 95% success in total joints, but we're nowhere close to that.