“Stryker looks for two things when deciding whether to invest in a new technology,” CEO Kevin Lobo told an audience at the Cleveland Clinic Medical Innovation Summit this week. The Kalamazoo, Mich.-based company’s first criterion is whether a device meets a sizable unmet need. “If we have a market that has a huge amount of unmet needs, we are very excited right away. Then the second thing we look at is what’s the nature of the technology?” Lobo said, noting that Stryker looks for novel or disruptive technologies, products that can significantly lower the cost of care or are less invasive or less harmful to the patient, with quicker recovery time.
“Those are the lenses we look at. We really like differentiation,” he said.
For Stryker, the robotic approach to surgery is having smart operating rooms that can talk to each other.
“For us, we look at that as a way to standardize procedures and make things more consistent and be more leading-edge. That was a type of differentiation,” Lobo added. Sometimes a small difference is enough to pique Stryker’s interest, he said, citing the acquisition of CoAlign, which developed a hydraulic interbody device that greatly simplifies lower lumbar surgeries. It’s an example of a feature that provide an easier experience for the surgeon and the patient at a lower cost, Lobo said.
Finding those examples has gotten more challenging as the bar on innovation has been raised significantly over the last few years, Lobo said.
“If you look five to 10 years ago, Stryker was very much a features and benefit company. The surgeons said, ‘I love this device, could you just bend the angle a little bit more? That’ll be good for me.’ We’d say, ‘Sure.’ We’d go bend the angle a little bit more, we’d charge extra. That would work, but now the burden of proof of proving clinical or economic efficacy is raised significantly,” he said. “I actually think it’s a good thing. It makes sure that the money we’re spending on investment is really delivering value.”
Stryker isn’t looking too far beyond the acute care market, the CEO said, noting that Stryker is not a disease management company.
“I think I can step a little to the left and a little to the right. The danger is this is what we’re good at and I think healthcare will continue to move. I think the operating room is going to move to the ambulatory surgery centers and we’re becoming much more present in ambulatory surgery centers. It’ll eventually move to the home, but I think for now we’ve chosen to partner more with other companies. We’ll work with them together,” Lobo said.
“Our role is to really help in the areas where we’re the expert. I think we’ll stay pretty close to our core. You’re not going to start to see Stryker in your homes, probably for the next 10 to 15 years.”