TDM USA: Expanding Via Value-Based Fracture Care

by Elizabeth Hofheinz, M.P.H., M.Ed., February 10, 2020

Like many orthopedic companies that are increasing their footprint across America, Salt Lake City-based TDM USA is aiming to leave their own unique mark on the orthopedic trauma and extremity market.

Indeed, Clay Smith, President and General Manager of TDM USA, says they are reducing inefficiencies and costs associated with the delivery of orthopedic trauma and extremity implants. Smith told OSN, “We are genuinely striving to be an agent of change in the healthcare sector.”

The company seeks to alter the landscape of the U.S. trauma and extremity markets via “value-based fracture care.” They are positively impacting the healthcare system by delivering high-quality, clinically-proven, value-priced extremity fixation implants – to the benefit of patients, physicians, surgical facilities, payors and their distribution partners.

Distal Radius Locking Plate with Screws
Fibula and Tibia Locking Plates with Screws

Clay Smith: “TDM USA is a subsidiary of Korea-based TDM Co., Ltd., which entered the orthopedic market in 2007 and now distributes over 40 product systems in 15 countries. When they brought me in to identify potential U.S. stocking distributors in 2017, I explained that it would be a difficult task because, unlike other countries, here in the U.S. distributors and their surgeon customers typically try new products under a consignment model…and that many surgeons want to work with a company with a local (U.S.) presence.”

“After showing TDM’s products to a number of surgeons and distributors, all agreed that the quality is second to none and numerous distributors were willing to pick up the line on consignment. However, they wanted the level of response and service that a U.S.-based office would provide. So, Youngdae Kim, one of the founders and CEO of TDM Co., Ltd., and I agreed that the best way for TDM to be successful in the U.S. market was to set-up and operate a subsidiary.”

TDM USA incorporated in January 2018 at a time when the Korean parent company already had six product systems undergoing the 510(k) submission process. Smith notes, “While awaiting FDA clearance, we secured and outfitted an office and warehouse, put a stringent quality management system in place, and identified potential sales agents/distributors. Meanwhile, Mr. Kim relocated with his family to Salt Lake City from Korea to ensure we received the support we needed from our Korean parent company. We imported and began marketing products in September and had our first cases in November 2018. The TDM USA team was able to launch a company from scratch and commercialize six product systems in less than a year with a lean but extremely efficient infrastructure.”

In just over a year TDM has tripled its initial product offering in the U.S., and now provides fracture fixation from “clavicle to toe.” And those solutions are part of Smith’s value-based approach.

“As more orthopedic surgeries are moving to ambulatory surgery centers (ASCs), we saw an opportunity to be part of the solution to our country’s high cost of healthcare.” states Smith. How? “Our vertical integration and favorable terms with our parent company coupled with our commercialization strategy, allow us to offer high-quality clinical solutions that have generated successful outcomes around the world and do so at a value price. Because all our products are intended for outpatient procedures and our model offers varying levels of service and price, we can go directly to ASCs,” notes Smith. “We work closely with providers at surgery facilities to determine their precise logistical and clinical support requirements, then price and service level are customized to the needs of each facility; and in the end, we have implemented value-generating solutions.” Why? “Surgery centers receive lower reimbursement, so naturally they want lower implant costs without sacrificing outcomes and quality. By tailoring our service and support levels to each individual facility, we can reduce implant pricing while maintaining outcomes; thereby, increasing value and being part of the solution.”

Do tell, Clay.

“My vision for the company is that we disrupt the orthopedic trauma and extremity implant market like ecommerce has done to the traditional retail shopping market. We can typically deliver quality products to surgery center customers thru traditional service at 65% of their current cost; alternatively, if we can work together within a non-traditional service format, we can deliver product at 35-40% of what they are currently paying. Time after time this non-traditional model has proven successful. We educate staff and surgeons on product and instrument trays and together develop an efficient implant replenishment process that seamlessly incorporates with that facility’s existing process. This eliminates much of the inefficiency and wasted service fees in the hope that by lowering the cost to the surgery center, patients ultimately benefit and have access to more and better quality services. Also, TDM’s products are designed for a surgery center setting; the tray footprints are small requiring minimal shelf space. This, combined with optimal instrumentation, helps reduce sterilization time. This approach to quality and efficiency coupled with value-based pricing resonates with ASC owners.”

For the most part, says Smith, distributors “get it” – and realize there is still upside opportunity for them. “The independent commissioned sales agents say, ‘OK, you are coming in at a lower price, I still get a commission, and I just have to pop into a facility every 6-8 weeks to provide periodic in-service, check trays, etc.’ While this mindset isn’t yet universally accepted, it’s inevitable that the traditional commissioned system will change, particularly for fracture management cases at a surgery center, because of skyrocketing healthcare costs, and most distributors would rather remain relevant by bringing value to their customers than become marginalized.”

And, TDM USA is keeping distributors relevant with plans to routinely bring new products to the U.S. market – like the  new 12 products introduced this January. Eight of which are standard headed and headless compression cannulated screws in various sizes that are meant to address the most common outpatient procedures. The four other new systems are for fracture management of the wrist, clavicle, ankle and small bones of the hand and foot. “These products were already developed and have produced successful outcomes across the world,” states Smith.

Smith: “We now offer a comprehensive system to address ankle fractures with notable low-profile, anatomic plates and our distal and proximal radius implants have, I believe, the lowest profile on the market at 1.5mm thin. In addition, we can offer a very competitive total construct price for a distal radius fracture.”

TDM USA also now has a standalone clavicle locking plate and screw system, including a unique anterior positioned plate, and a mini frag set featuring a comprehensive line of plates for small bones in the hand and foot.

With numerous market watchers convinced that ASCs are the future of orthopedic care, TDM USA’s hyper focus on these facilities means that they are definitely poised to realize Smith’s vision of disrupting the orthopedic trauma and extremity fixation market.

In the end, Clay Smith has thrown down the gauntlet: “Nobody can touch us on value.”

Any takers?

For additional information on TDM USA, please visit www.tdm-usa.com.

Josh Sandberg

Josh Sandberg is the President and CEO of Ortho Spine Partners and sits on several company and industry related Boards. He also is the Creator and Editor of OrthoSpineNews.

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