By Kristen Schorsch
After years of hawking spinal implants, Joseph Jin knows there’s lots of money to be made from baby boomers and their aching backs. But it won’t be easy for his Chicago-based startup to break in.
The demand is driven in part by people who want to remain active later in life as well as rising obesity rates. Spinal fusion is among the most common and expensive surgical procedures in the nation, costing an average of about $28,000 per hospital stay in 2012, the most recent federal data available.
But more than 50 percent of the market is controlled by a few big players, including Minneapolis-based Medtronic and Kalamazoo, Mich.-based Stryker. Doctors who have logged hours learning the intricacies of certain products don’t like change, experts say, making it tough for new competitors.
“Choosing a large company is more ideal because they have more research behind the product, more people have used it and they have more evidence to show its effectiveness, which is very important for getting reimbursed for these very expensive procedures,” says Tara Shelton, a research analyst at Frost & Sullivan, a Mountain View, Calif.-based consultancy.
The industry had consistent high-single-digit to double- digit growth early in the past decade. But it was hit hard by the 2008 recession as patients put off pricy surgeries, analysts say.