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BoneChat #4 - Cutting Corners Costs More A Medical Startup Lesson - Dr David Kay

7 Apr 2024 · 1 min

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Dr. David Kay explains why medical startups cut corners on materials to hit per-item costs, even when it breaks patient care. Nylon sutures snap and microneedles fail to save $50,000 against hundreds of millions in revenue. The real pitch should be total cost of care, not line-item discounts.

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So if you're going to have equal outcomes, then you better be lower cost. So if you ask somebody who's financially very savvy, they're going to want to know about the total cost, not just the line item cost. The problem is you're going to be dealing with materials managers who are paid and bonus based upon line item costs. The nylon suture would break and wounds would dehisce because the suture would actually break. The microneedles, the suture which was wedged on would fall off. Every single surgeon Agreed. And it was only to save $50,000 a year out of, you know, something that's generating hundreds of millions. And that's where the sell process comes in. You've gotta look at what is the total cost of care, and that's what you've gotta sell on.