In the previous section of this guide, we went in-depth about the financial issues surrounding 3D printing in hospitals, which includes discussions on reimbursement, revenue strategies, and cost analysis for 3D printing in hospitals. In this final section of this guide, we created a sample financial analysis spreadsheet, which you can use as a basic framework to construct a financial plan for setting up a 3D printing service. (29,30) The following is a discussion of two hypothetical scenarios to demonstrate how this spreadsheet works. Please be aware that the values used could vary widely and should not be used as reference numbers. For example, the construction of a dedicated area for a 3D printer is highly variable depending on the hospital, geography, type of machine, regulatory requirements, etc. Also, the pricing of machines, tools, and materials has also changed significantly as 3D printing is an ever-changing landscape that experienced exponential growth since the publication of the original book. While we update these guides regularly to reflect such changes, the numbers should be used as hypothetical, and not literal, values.

1. Introduction:  What is operational management?
2. Technical Background
3. Strategic Issues
4. Tactical Issues
5. Financial Issues 
6. Financial Worksheet
7. Acknowledgments/References

View this post on Instagram

A post shared by 💡Healthcare 3D Printing💡 (@3dheals)

In Hospital 3D Printing Service Financial Plan:

Downloadable version (Paid Members Only)

The Worksheet:

Revenue:

A community-based subspecialty hospital wants to justify setting up a 3D printing center for cardiothoracic surgeries. They want to expand this service to other specialties but want to start with the cardiothoracic department, using 3D printed models as part of patient education and pre-surgical planning.  For this service, they plan to charge $5000 per printing service. After accounting for all Medicare/Medicaid discounts, or insurance reimbursement, they are receiving $4000 per print in net revenue.  The hospital has determined that 30 patients out of 300 patients per year would benefit from the model and that the new service will attract two new patients as a result.  Thus, the hospital will start their planning calculations for the first year at 32 prints at $4000/print leading to $128,000 in revenue. The two new patients per year each increased an additional $40000 surgical revenue to the hospital.  The total net revenue is $168,000 for the first year.  

Capital Expense:

Next, they determine what equipment is to be purchased based on their application and needs.   Since this is used in pre-surgical planning, precision/accuracy, good resolution, and sterilizable material are all important. In cardiac cases, time is often of the essence where turnaround time needs to be in 1 or 2 days.  Thus, a high-speed printer is required. Multicolor is useful in showing complex anatomies including the vascular structures.  Options for a flexible material to create models with tactile features are also gaining popularity for pre-surgical practice in high stake cases. A typical machine that meets these requirements would be Stratasys Objet500 Connex 3, which costs roughly $300,000 including a maintenance contract.  

The hospital has a well-developed radiology team that is versed in 3D imaging.  To make the 3D print, a radiologist will spend on average 4 hours more than their usual time, at $200/hr to perform the detailed segmentation.  Approximately $26,000 will therefore be spent on radiologists’ time per year for 32 cases. 

The technologist requirement is estimated to start and remain at a one-half person for 10 years.  Their salary is estimated at $60,000 per year so the technologist’s cost is $30,000 per year. 

The installation fee (including transportation) is $1000.  Remodeling costs are estimated at $400 per square foot in a 150 square foot room, for a total of $60,000.  The cost of training is estimated at $5000.  It is assumed that any insurance needs are already covered by the hospital, thus no additional insurance is required. Again, these numbers are highly hypothetical and will vary significantly, depending on existing infrastructures.

Results:

The “results” spreadsheet looks at the cash flow over 10 years. First, the gross revenue is calculated by multiplying the number of procedures by the amount charged per procedure.   The revenue is then adjusted to take into account the mix of discounts and patients with Medicare, Medicaid, etc.   Added to this is an additional revenue generated, such as from new patients, over and above that from the new procedure.    This sum is the net revenue – the additional cash taken in due to the 3D printing.  In our example in the out-source model in Year 1, we have 32 procedures at $5000 per procedure for gross revenue of $160,000.  After discounts, our revenue drops to $128,000. However, we attract new patients who have additional procedures. That additional revenue of $40,000 brings our net revenue to $168,000.

Next, the costs are accounted for. As described earlier, there are fixed and variable costs, which are seen in the in-house model.  For the in-hospital model, there is a significant cost of acquisition, which amounts to $367,600. 

 The annual fixed cost is estimated to be 32,000, assuming an additional half-time technologist is needed. The variable cost is about 800 per print, assuming a total of four hours of post-processing time is needed from the radiologists. The total annual fixed cost is, therefore, again, 25,600.

The sum of the costs is the net expenses. In our Year 1 case, the costs are what we are paying to set up the 3D printing center and to hire a new technologist.  In addition, we have the additional cost of a radiologist’s time at $200 per print, assuming approximately 4-hour post-processing time from the radiologist.  The total of these costs is $425,200 of expenses.  

The net income is the difference between the net revenue and the net expenses. If the number is positive, you have a profit. If it is negative, there is a loss. Our example shows a loss of $257,200 for the first year.

The breakeven volume is the number of procedures needed to have no profit – where the revenues and the expenses match.  In this spreadsheet, the additional revenue comes from new procedures attracted due to the employment of the new technology. We assume two new patients will be attracted for year 1. We also assume a subsequent 10% increase in new patients in subsequent years. Obviously, patients come in integer, and 10% is more of an average annual percentage growth spread over a 10-year period.  The Year 1 breakeven is 125 prints. Since we only did 32 prints, we end up with a loss, even accounting for additional procedural revenue.

The net present value (NPV) is the value of the 10 years’ worth of net income in today’s dollars.  Due to inflation, $10 today is worth more than $10 a year from now. To determine the total worth of the project for 10 years in today’s dollars, the values for Years 2 – 10 need to be discounted.  The rate at which they are discounted is decided by the analyst. That rate is filled in on the Worksheet tab and is used to calculate the results.  Using a 2% discount rate, which is set on B57 on the “worksheet” section of Table VI, we see an NPV of approximately $ $1,359,600 over 10 years.

View this post on Instagram

A post shared by 💡Healthcare 3D Printing💡 (@3dheals)

Outsource 3D Printing Service Financial Plan:

Downloadable version (Paid Members Only)

A community-based subspecialty hospital wants to justify setting up a 3D printing center for cardiothoracic surgeries. They want to expand this service to other specialties but want to start with the cardiothoracic department, using 3D printed models as part of patient education and pre-surgical planning.  

Similarly, for this service, they plan to charge such that after all Medicare and various discounts, they are receiving $4000 per print in net revenue.  However, hesitant to invest significant capital upfront, they decided to use a third-party vendor to both design and manufacture the 3D prints. This vendor has a minimal turnaround time of one week for each procedure, therefore limiting usage to less emergent cases that would require a 1-2 day turnaround time. 

Subsequently, the hospital has determined that 20 patients out of 300 patients per year would benefit from the model and that the new service will attract two new patients as a result.  Thus, the hospital will start their planning calculations for the first year with 22 prints at $4000/print leading to $88,000 in revenue. The two new patients per year each increased additional $40,000 surgical revenue to the hospital, assuming each surgery will generate 20,000 in revenue.  The total net revenue thus is $128,000 for the first year.   

The hospital will pay  $4000 per print with the outside vendor. 

Results:

The “results” spreadsheet looks at the cash flow over 10 years. First, the gross revenue is calculated by multiplying the number of procedures by the amount charged per procedure.   The revenue is then adjusted to take into account the mix of discounts and patients with Medicare, Medicaid, etc.   Added to this is an additional revenue generated, such as from new patients, over and above that from the new procedure.    This sum is the net revenue – the additional cash taken in due to the 3D printing.  In our example in the out-source model in Year 1, we have 22 procedures at $5000 per procedure for gross revenue of $110,000.  After discounts our revenue drops to $88,000 however, we bring in new patients who have additional procedures. That additional revenue of $40,000 brings our net revenue to $128,000.

Next, the costs are accounted for. As described earlier, there are fixed and variable costs, which are seen in the in-house model.  For the outsourcing model, there is no cost of acquisition. The sum of the costs is the net expenses. In our Year 1 case, the costs are what we are paying a vendor for the prints, which totals $4050 per print.  In addition, we have the cost of a radiologist’s time at $200 per print, assuming approximately 1-hour of design time from the radiologist.  The total of these costs is $93,500 in expenses.  

The net income is the difference between the net revenue and the net expenses. If the number is positive, you have a profit. If it is negative, there is a loss. Our example shows a profit of $33,500 for the first year.

 The breakeven volume is the number of procedures needed to have no profit – where the revenues and the expenses match.  In this spreadsheet, the additional revenue comes from new procedures attracted due to the employment of the new technology. We assume two new patients will be attracted for year 1. We also assume a subsequent 10% increase in new patients in subsequent years. Obviously, patients come in integer, and 10% is more of an average annual percentage growth spread over a 10-year period.  The Year 1 breakeven is 23 prints. Since we only did 22 prints, we should have a loss. The additional revenue brought in gives us a positive result.

The net present value (NPV) is the value of the 10 years’ worth of net income in today’s dollars.  Due to inflation, $10 today is worth more than $10 a year from now. To determine the total worth of the project for 10 years in today’s dollars, the values for Years 2 – 10 need to be discounted.  The rate at which they are discounted is decided by the analyst. That rate is filled in on the Worksheet tab and is used to calculate the results.  Using a 2% discount rate, which is set on B57 on the “worksheet” section of Table VII, we see an NPV of approximately $523K.

 With these two hypothetical scenarios, a graph of return on investment over a ten-year period can be generated.

View this post on Instagram

A post shared by 💡Healthcare 3D Printing💡 (@3dheals)

Related Articles:

3DHEALS Guides (Collective) – This is where we dive deep into subjects that you will find helpful for your projects and career.

3DEALS Expert Corner (Collective) – This is where we invite field experts to write their perspectives in a first-person narrative. To write for this column, please email: info@3dheals.com

3DHEALS From Academia (Collective) – This section features recent, relevant, close to commercialization academic publications in the space of healthcare 3D printing, 3D bioprinting, and related emerging technologies.

The post Financial Analysis Worksheets (Downloadable) for 3D Printing in Hospitals – Guide 5/5 appeared first on 3DHeals.

In part one of this guide, we provided background information on why a beginner’s guide to 3D printing in hospitals is necessary, and how we are organizing our thought process around three main operational management issues. That is, strategic, tactical, and financial issues related to implementing 3D printing in hospitals.

1. Introduction:  What is operational management?
2. Technical Background
3. Strategic Issues of 3D Printing in Hospitals
4. Tactical Issues
5. Financial Issues      
6. Financial Worksheet
7. Acknowledgments

In this section, we focus on strategic issues related to 3D printing in hospitals.

A Review of Concept:

What are “strategic issues”?

Strategic issues answer the questions “what” and “why”.

Strategic thinking, planning, and actions depend on the following company’s abilities:

• Ability to understand the environment they operate within.
• Ability to recognize developing industrial patterns and trends.
• Ability to anticipate potential issues.
• Ability to predict outcomes and impact of planned initiatives.
• Ability to develop sound fallback plans to mitigate the risk of a miscalculation.

Strategic planning in particular deals with the mission and purpose of the organization, its value proposition, i.e., what value it delivers to the customer, as well as the company’s future direction and growth.

There are three main categories specific for strategic issues of 3D printing in hospitals:

1. Clinical trials
2. Organization and staffing (Which include multidisciplinary team design, and in-house/outsource discussion)
3. Regulatory (FDA), policy, and legal issues

A. Clinical trials:

A clinical trial should be an important part of the strategic consideration because more clinical evidence, especially in terms of clinical efficacy and outcomes, will strengthen arguments for reimbursement. Why is reimbursement so important? That is because unit economics is crucial to the sustainability and scalability of a medical practice.

What is a “clinical trial”?

According to ClinicalTrials.gov, NIH and NML maintain a registry for clinical trials, “a clinical trial is a research study in which human volunteers are assigned to interventions (for example, a medical product, behavior, or procedure) based on a protocol (or plan) and are then evaluated for effects on biomedical or health outcomes.”

Good clinical trials serve several major purposes, including: 

1. Informing consumers about the values of this technology.
2. Preparing data for new CPT coding and other reimbursement strategies from payers.
3. Inspiring creative innovations. 

Data on clinical outcomes is crucial. In recently published studies, researchers have been focusing on the following outcome metrics: operating room time, hospital stay, surgical outcome and complication, and post-surgical accuracy. Non-quantitative outcome metrics include patient/family satisfaction.

We have recently published several articles on this subject, and since we update theses articles separately, readers can refer to the following articles without us creating redundant sections on this guide:

In Healthcare 3D Printing Clinical Trials,  we discussed the significance of conducting clinical trials and also deconstructed the organizations behind several important registries for ongoing clinical trials.

In Completed 3D Printing Clinical Trials, Part I, we dived a little deeper into the status of currently completed clinical trials on clinicaltrials.gov. 

Please stay tuned for Part II of the above discussion to take a more detailed look at the design and execution of the completed trials.

B. Organization and Staffing:

The reality is that in-house 3D printing service almost always exists in an academic setting when there are enough clinical demand, skills, and research funding in exploring emerging technologies. However, except for rare institutions like the Mayo Clinic, even academic centers have limited manpower and existing resources. Many academic centers’ 3D printing center likely has less than a handful of technicians and clinicians. That’s why optimizing organization and staffing for a 3D printing service, either done in-house or outsourced, is important even before your first 3D printer.

1. Multidisciplinary design: 

3D printing is a very technical activity that most clinicians never received formal education. Vice versa, it takes months for a new biomedical engineer to learn clinical terminologies and relevant anatomy. With a steep learning curve for both, the most efficient way of utilizing talents is to figure out a way to work together and work smartly.

The creation and use of a 3D printed model, surgical guide, or an implant is a process that starts with a patient and ends with an operation.  The following graphic is a simplified version of our old swim lane.

I will walk through this swim lane for 3D printing in hospitals with two hypothetical scenarios based on two recently published papers, one focusing on a customized mandibular implant and the other focusing on personalized orthopedic surgery. [Ref, Ref] The main hypothesis behind these examples is that the location of file manipulation and 3D printing was in the hospital.

Example 1. Fabricating Mandibular Implant using Direct Metal Laser Sintering (DMLS)

Clinical Scenario

The background story of this first example is a patient with mandibular cancer. Conventional treatment after tumor resection is to reconstruct the surgical defect with fibula free flap (or another piece of bone in the body). However, the patient did not do well after repeated reconstruction. This is when the surgical team decided to seek out an alternative solution for this patient.

Imaging Acquisition

Starting from the top of the infographic, the clinical team must request the appropriate imaging studies. In this case, both pre and post-operative CAD/CAM images are available. This will also depend on the radiology technicians to perform the correct study. Radiologists may also play a role in this case by supervising the imaging process and interpret images obtained.

File Manipulation

3D Imaging Lab of this hospital or other 3D imaging engineer can then perform segmentation steps, converting DICOM images to STL. Subsequently, the technician edits the STL file for 3D printing using a mesh generating software. The technician can also calculate the mechanical properties of the final model during this step.

Once the 3D images or models are available, the clinical team can evaluate the images, making diagnosis and generate an initial surgical plan.

Multidisciplinary Meeting

Admin coordinates a multidisciplinary meeting among the engineers, radiologists, surgeons, radiation oncologists, and other care providers for the patient to discuss the best surgical approach and the most optimized implant design complementary to such an approach. A case manager and dietitian may also be involved in this discussion since the disease is disfiguring and intimately involves the digestive system.

Implant, anatomical model, surgical guide CAD design

Depending on the conclusion of the meeting, the CAD designer will use existing patient’s 3D imaging data and model to create a personalized implant and surgical guide. An anatomical model is also often useful for both patient education and surgical planning for the surgeon.

The radiologists and surgeons often intimately supervise the engineers in this step.

Manufacturing Process

Often, with a small budget, the CAD designer also plays the role of an additive manufacturing engineer. However, in this case with metal 3D printing, which has more strict manufacturing requirements, more than one engineer was probably necessary. In this phase, these steps include 3D printing, post-processing, and quality control/validation of the final product. One may also add sterilization and packaging into this step.

Product Delivery and Implant Surgery

Example 2 Personalized Orthopedic Surgery for Internal and External Fixation of Complex Tibial Plateau Fracture

Clinical Scenario

The second example is based on a recently published paper discussing the role of 3D printing in treating high energy complex tibial plateau fracture. [Ref] In these cases, it is often difficult to figure out precise injury of the knee joint, making surgical decision challenging.

Imaging Acquisition

In this case, the orthopedic surgeon would request high-resolution CT, which is ideal to demonstrate bony injury, especially the articulating surface of the knee. The remaining steps are similar to example 1.

File Manipulation

Most of this step is identical to example 1.

Once the 3D images or 3D models are available, the clinical team can evaluate the images, making diagnoses, and generate an initial virtual surgical plan.

Multidisciplinary Meeting

Admin coordinates a multidisciplinary meeting among the engineers, radiologists, trauma surgeons, orthopedic surgeons, and other members in the care team to discuss the best surgical approach of the fixation approach. A speedy team approach is necessary since a trauma patient may have other serious injuries that can affect his/her clinical outcomes.

Implant, anatomical model, surgical guide CAD design

Based on the conclusion of the meeting, the 3D Lab technologist or CAD designer will use existing patient’s 3D imaging data and model to create an anatomical model design highlighting the desired bony injury optimized for surgical planning.

The radiologists and surgeons often intimately supervise the technicians/engineers in this step.

Manufacturing Process

Often, with a small budget, the CAD designer also plays the role of an additive manufacturing engineer. In this case, a polymer-based 3D print with the adequate resolution is sufficient.

In this phase, these steps include 3D printing, post-processing, and quality control/validation of the final product. One may also add sterilization and packaging into this step if the models are to be used within the surgical field.

Product Delivery

The anatomical models can serve multiple purposes ranging from patient education to presurgical planning, to intraoperative guidance.

2. In House versus Outsource:

This is perhaps one of the most common questions:

Should we create a 3D printing lab or should we just outsource the hospital’s 3D printing needs?

Depending on existing hospital infrastructure, clinical caseload, and targeting applications, creating an in-house 3D printing center can be expensive and challenging on multiple fronts. Often, it is not a viable initial option for smaller hospitals.

Except for imaging acquisition, outsourcing 3D printing service allows the hospital to bypass the initial financial risk, technical deficiency, and operational challenges. Over the past several years since the book was originally written, there are now many new medical 3D printing service bureaus all over the world, in addition to services available from larger companies like 3D Systems (USA) and Materialise (Belgium). Interested readers can explore our regularly updated directory to find these companies. The end result is more options to the consumers.

View this post on Instagram

A post shared by 💡Healthcare 3D Printing💡 (@3dheals) on Oct 5, 2020 at 10:11pm PDT

These service bureaus often not only offer 3D printed anatomical models, but also surgical guides and implants. However, the cost of these services is still on the scale of hundreds if not thousands of dollars. That said, while the cost appears high, in high-risk, rare, and complex surgical cases, the return on investment of adding a 3D printing step can make sense to clinicians. Additionally, turnaround times are also less than ideal, ranging from days to weeks.

On the other end of the spectrum, however, a larger academic center may be ready to heavily invest in a centralized 3D printing center. The Mayo Clinic was one of the first medical centers to make this kind of investment. It has been a definite leader of 3D printing in hospitals, setting great examples of making it work. [Ref] Almost all the surgical departments, from pediatrics, neurosurgery, orthopedics, are now routinely using their 3D printing service. The widespread acceptance of the technology within the Mayo Clinic has significantly increased the case volume and helped to justify the cost.

The following questions are common when hospitals are making the decision on creating an in-house 3D printing lab versus using outside vendors:

1. What is the existing infrastructure that could be used for 3D printing in hospitals? 
2. What is the required turnaround time for the applications?
3. What is the necessary equipment for a successful 3D printing center in the hospital? 
4. How much does the clinical team want to get involved in the 3D printing process? 
5. What to look for when selecting for an outsourcing vendor for pre-surgical 3D printing in the hospitals?

What is the existing infrastructure that could be used for 3D printing in hospitals? 

Existing personnel and software may be available to be part of the new service.

For example, larger hospitals like Stanford, UCSF, Children Hospital Boston have existing funding for innovative projects such as simulation programs, 3D imaging,  that can be leveraged to create 3D printing services. Some are already equipped with a 3D printer even before officially establishing a 3D printing lab.

Medical centers with comprehensive imaging services are often equipped with high-quality imaging hardware that can generate high-resolution medical images required for 3D printing. Over the last five years, many major imaging equipment manufacturers (e.g. GE, Siemens) are now equipped with 3D printing protocols from various popular prosthetics or device companies, as well as dedicated 3D printing software upgrades.

Additionally, many hospitals have already purchased licenses for popular 3D visualization software packages such as Vitrea (Vital, USA) or OsiriX (Bernex, Switzerland). These contain many similar DICOM to STL conversion and modification features to other more 3D printing specific software options.

Highly-trained technicians who are already familiar with post-acquisition imaging processing have many of the skills required for file manipulation for 3D printing. The learning curve for these centers will be significantly less steep than a center such as a community hospital.

View this post on Instagram

A post shared by 💡Healthcare 3D Printing💡 (@3dheals) on Oct 9, 2020 at 10:00am PDT

What is the turnaround time required for the applications?

Turn around time is a critical factor to consider as many hospital surgical cases are emergent urgent. Any delay in care can cause increased patient mortality and morbidity rate.

Therefore, time factor is important.

The hospital needs to identify the bottleneck among the production steps and investigate if the most time-consuming step can be performed faster outsourced when compared to in-house production options.

Good and effective communication between the requesting clinicians and the 3D printing team is the most important step to quickly conceptualize the best 3D printing strategy. It not only can be time-consuming but also is pivotal in decision making in subsequent steps. Because many surgical cases require a more timely response, major academic hospitals like Stanford have officially incorporated 3D printing as part of their Electronic Healthcare Records (EHR) ordering system.

Ineffective initial communication with either in-house or outsourced 3D printing services will prove costly in time and money.

The next most time-consuming and labor-intensive step is segmentation and image post-processing. If in-house 3D software expertise is already available, then it is much easier to keep this step in-house, since communicating with a multidisciplinary team can be more effective when the engineering step is completed in-house.   

On the other hand, some external vendors have experienced engineering teams who are familiar with clinical needs, often even specific clinician’s needs. They can communicate with the care team in an equally effective fashion. Some vendors offer faster printing and shipping/transportation strategies. They may more quickly scale and modify production to shorten turnaround time and meet the demand.

View this post on Instagram

A post shared by 💡Healthcare 3D Printing💡 (@3dheals) on Oct 5, 2020 at 10:12am PDT

What is the equipment needed to achieve successful 3D printing in the hospital?

Software and hardware requirements will highly depend on the goals of the 3D printing center.

For example, the resolution and material requirements for creating a pre-surgical educational model for the patients or medical students will be much less than a model intended for a pediatric cardiothoracic surgeon, who wants to simulate the intra-operative environment for complex congenital heart disease. Flexible materials cost significantly more may be needed for complex vascular surgery. 

The size of the model required will also help determine what hardware is needed. For example, a pediatric heart model is small enough to fit inside the popular desktop 3D printer but an actual sized adult pelvis will not fit.

How much does the clinical team want to be involved in the printing process? 

In general, when extensive multidisciplinary communication among different clinical and engineering teams is needed, an in-house 3D printing service is more efficient and convenient. These include conversations ranging from initial design needs to the correction of errors in the production process. The cost and time of re-designing and reproducing a model can increase significantly with outsourcing. 

Again, the depth of the clinical team’s involvement is variable and individual-based. For example, in complex maxillofacial cases where the surgeons often want to see a variety of surgical strategies, it may make sense to keep the design/segmentation steps in-house and outsource the final printing with an outside vendor. Models intended for educating patients (patients’ families) and students/residents usually do not require extensive in-house multidisciplinary discussion and can be outsourced easily.  

What to look for when selecting an outsourcing vendor for 3D printing in hospitals?

Over the past years, more and more 3D printing companies are now interested in providing services to healthcare providers. A variety of new business models have also surfaced, demonstrating the agility in the industry. These models ranging from placing vendor hired biomedical engineers in contract hospitals, to leveraging machine learning to automate production steps.

Being a separate entity and often at a distance from the hospital, it is important for outsource vendors to understand and respect the sensitive nature of a medical record. It is imperative to prepare a HIPAA compliant data transfer process. Some hospitals use lifeIMAGE (MA, USA) as a way to transfer images to and from a third party. However, given the continuous expansion and emphasis on the interoperability of EHR (electronic healthcare record) and HIS (Healthcare Information System) compatibility, data transfer will be less of an issue in near future.

For complex cases, the ability to effectively communicate with the clinicians requires the vendor to have certain healthcare familiarity or clinical experience. Even with experienced vendors, occasional unsatisfactory products may still be produced and it is important that the vendors can provide adequate customer service to either effectively rectify the mistakes or design backup plans in case of such failure. For example, making multiple versions of the prints with a different design or structural emphasis is one such strategy.

View this post on Instagram

A post shared by 💡Healthcare 3D Printing💡 (@3dheals) on Sep 27, 2020 at 6:38pm PDT

C. Regulatory (FDA), policy, and legal concerns

This part of the guide will likely change more frequently, check back for updates.

1. FDA Updates

Over the past five years since the book was first written, the FDA has made several major improvements to the regulatory landscape of 3D printed medical devices. The medical devices include 3D printed anatomical models, surgical guides, and implants. The agency also further clarified governing bodies of pharmaceuticals and biologics using 3D printing as the core technology.

These FDA entities focusing on medical applications using 3D Printing inlcude:

• Medical devices regulated by FDA’s Center for Devices and Radiological Health (CDRH),
• Biologics regulated by FDA’s Center for Biologics Evaluation and Research, and
• Drugs regulated by FDA’s Center for Drug Evaluation and Research

For the purpose of discussion of 3D printing in hospitals, the most important regulatory updates include:

1. 3D Printed anatomical model is now regulated under the division of the radiological health of CDRH. For a majority of cases in a hospital, the intended use is regarded as a diagnostic process.
2. FDA finalized its guidance on “Technical Considerations for Additively Manufactured Medical Devices”
3. US FDA recently announced its modernization plans for 510(K) pathway to drive technological innovation in medical device manufacturing. Some of the proposals include using newer or more recently cleared medical devices (less than 10 years) as predicate devices to demonstrate substantial equivalence and the creation of a new alternative 510(k) pathway that will allow approval based on objective safety and performance criteria.

View this post on Instagram

A post shared by 💡Healthcare 3D Printing💡 (@3dheals) on Sep 13, 2020 at 11:38pm PDT

2. Global Regulatory Updates (CE/CFDA/TGA)

A discussion of the regulatory landscape of 3D printed medical devices will be incomplete without including other major global medical device regulatory agencies.

In early 2019, Khalid Rafi, who is the AM lead for ASTM (American Society for Testing and Materials) International, wrote a nice Expert Corner blog on the global regulatory landscape, titled “A World of Regulation: Updates on 3D printed Medical Devices.” This blog succinctly covered recent updates from CE, CFDA, TGA, Canadian medical device market regulator Health Canada, Brazil’s medical device regulator (ANVISA), in addition to those of FDA’s.

Later in the same year, Rui Coelho wrote a separate Expert Corner blog, focusing on CE regulatory updates regarding 3D printed medical devices. One important change from the European Union came from the new Medical Device Regulation MDR (EU) 2017/745, which states that 3D printed implants are no longer considered custom made medical devices under the CE mark.

In MDR 2017/745, a custom-made product is a medical device that has “specific design characteristics” that make it suitable “for the sole use of a particular patient exclusively to meet their individual conditions and needs”. The new regulation goes on to exclude two categories of medical device product from the custom-made definition:

1. Mass-produced medical device products which are adapted to the specific requirements of a patient
2. Mass-produced products manufactured as per a written prescription

Therefore, “custom-made” can only be applied to products made from scratch. [Ref]

The result of such change is new regulatory uncertainty for the manufacturers of 3D printed medical device, be it a hospital or an outsourcing vendor. However, manufacturers are advised to follow existing medical device manufacturing standards. It is also very likely future CE Mark requirements will be parallel to its U.S. counterpart.

3. Legal Concerns

As the adaption of 3D printing in healthcare grows, hospitals and manufacturers should consider potential legal implications, albeit truly history-defining lawsuits have not happened outside of the intellectual property arena, which is a good thing. However, as with many highly regulated industries such as healthcare and manufacturing, regulation is necessary because the risk of harm is high.

As with many other emerging technologies in highly regulated sectors, 3D printing in healthcare piqued many intellectual discussions from legal experts, predominantly on issues involving product liability, intellectual property, HIPAA, and cybersecurity/data management. For the curious minds, additional in-depth discussion from ReedSmith LLP is worth reading and free to download here. [Ref]

Larger institutions with bigger budgets default to FDA-cleared software for preparing 3D printing files. The most popular FDA cleared software marketed for 3D printing anatomical models are from Materialise and 3D Systems. The concern with non-FDA cleared software is potential inaccuracies and therefore liabilities. However, there has been no ruling against any practitioner or hospital for using non-FDA-cleared software for 3D printing to date. This is not to say clinicians should not exercise caution and care when producing a 3D printed model. To me, this means smaller and newer software companies simply may not have had enough time and budget to get FDA clearance. Additionally, the assumption that FDA cleared 3D printing software providing higher quality end product is also to be proven. At the end of the day, the clinicians and the hospital still bear a majority of responsibility for providing the highest care to the patients.

View this post on Instagram

A post shared by 💡Healthcare 3D Printing💡 (@3dheals) on Sep 21, 2020 at 11:32am PDT

In the manufacturing process itself, safety guidelines for managing 3D printing material, operating 3D printers, and post-print processing must be followed to OSHA standards. We will cover material management in a later section of this paper. For patient care, more stringent requirements need to be met as the 3D printed product is used in close proximity and sometimes direct contact with the patient. Currently, a limited number of materials are FDA-cleared and can be sterilized sufficiently to be within the operating field. An even smaller number of materials can be used for implant production. Full understanding of the toxicity and biocompatibility of the 3D printing material used will be critical in compliance with future regulations in pre-surgical applications. 

Overall regulatory concerns have increased the complexity of setting up 3D printing in hospitals. A 3D printed surgical guide is one such example. A 3D printed surgical guide can be produced in-house within 24 hours. However, due to regulatory concerns, some healthcare providers choose to use outside medical device vendors with established regulatory clearance and workflow. This significantly increases the turnaround time from days to weeks, markedly decreasing the appeal of wider adaption such application.

In the next section of this guide, we will discuss the tactical issues of 3D printing in hospitals.

About the Author:

Jenny Chen, M.D.

Jenny Chen, MD, is currently the Founder and CEO of 3DHEALS, a company focusing on education and industrial research in the space of bioprinting, regenerative medicine, healthcare applications using 3D printing. With a focus on emerging healthcare technology, Jenny invests in and mentors relevant startups, especially companies pitching through Pitch3D. She believes a more decentralized and personalized healthcare delivery system will better our future.

Related Articles:

3DHEALS Guides (Collective) – This is where we dive deep into subjects that you will find helpful for your projects and career.

3DEALS Expert Corner (Collective) – This is where we invite field experts to write their perspectives in a first-person narrative. To write for this column, please email: info@3dheals.com

3DHEALS From Academia (Collective) – This section features recent, relevant, close to commercialization academic publications in the space of healthcare 3D printing, 3D bioprinting, and related emerging technologies.

The post Strategic Issues of 3D Printing in Hospitals – Guide Part 2/5 appeared first on 3DHeals.

Want to write a piece for 3DHEALS Expert Corner? Email us: info@3dheals.com

The concept of 3D printing (or additive manufacturing) in medicine is nothing new to physicians. Indeed, ever since computed tomography (CT) scans could be converted into 3-dimensional images in the early ‘80s, companies have sought to create 3D printed models of skulls and other anatomic structures. Surgeons, in particular, have been ordering custom anatomic models for decades now and services have expanded from creating simple skull models to customized patient-specific implants and virtual surgical planning.

A movement is now afoot to bring the factory into the hospital. With the explosion of 3D printing technologies, commercial-grade 3D printers have become more affordable than ever. As a result, doctors and other medical providers now have the potential to control the process of medical modeling themselves, without the need to outsource this work to commercial entities.

There are some clear benefits to bringing these capabilities in-house. The obvious one is the cost. Commercial entities currently charge hospitals thousands of dollars for these services – frequently more than surgeons get paid for the surgery itself. The ability to create these models in the hospital could decrease these costs dramatically, by 50% or more. Speed and convenience are also significantly enhanced. Models can be created at our institution as quickly as within 12 hours versus a minimum of 3-4 days and more typically 2 weeks from commercial sources. Finally, the risk of hospitals also is decreased. By necessity, medical providers must provide PHI (protected health information) to vendors. In the current era where major companies are hacked regularly, decreasing the number of external vendors also optimizes the protection of patient health information.

One would think that with such clear advantages present, hospitals all across the nation would be furiously working to start their own 3D printing labs. In reality, however, few such labs exist across the country and those who have attempted to start such services have frequently encountered surprising resistance to doing so. So why is this? 

The answers are not always clear and may differ at each particular institution, but there are definitely a number of key factors which pop up as recurring themes.

Business Plan

“Show me the money.” – Jerry Maguire

The reality is that all corporations, including hospitals, are in the business of making money. As a result, no enterprise in additive manufacturing will ever become successful without a reasonable business plan. Unfortunately, clinicians (who are frequently the advocates of this technology) are not well-versed in these types of discussions and arguments such as “it improves patient care” and “it’s the right thing to do” literally have CFOs seeing red.

Start-Up Costs

As with the start of any business, getting started isn’t necessarily cheap, or easy. While one might be able to purchase a low-grade FDM (fused deposition modeling) printer on Amazon for less than $500, professional quality machines start at the $30-50,000 level and top-of-the-line PolyJet/MultiJet machines with multi-color capabilities extend to the hundreds of thousands of dollars. Commercial software can also cost somewhere around $20-30,000 per workstation per year and experienced technicians or engineers to manage the printers continue to add to the costs of upkeep.

Lack of Expertise (and Training)

Even with enthusiasm on the part of institutions to proceed, medical 3D printing is such a highly-specialized, nascent field that few individuals have the qualifications to start a hospital- or clinic-based 3D printing lab from the ground up. Who is qualified to get this started? A clinician? A radiologist? An engineer? A 3D printing technician? The reality is that each of these individuals may have a subset of the skills necessary to develop a functional lab but few have possessions of all the skills necessary to do so. Moreover, even when there is a strong interest in training in this field, few companies provide the resources necessary to get started. 

Bureaucracy

“No good deed ever goes unpunished.” – #285 in the Ferengi Rules of Acquisition, Star Trek Universe 

Finally, bureaucracy may not sound overly menacing, but I have experienced a few factors which can serve to be insurmountable on a daily basis. Hospitals, like many large institutions, have a well-developed middle management process. One cannot help to feel that at many organizations, there is a culture of “no”. Middle management does not get rewarded for moving projects along or bringing good ideas to fruition. Rather, they get paid whether your project lives or dies. Your outstanding idea, therefore, may simply translate to more work on their part. In a sense, they are literally incentivized to kill your project and make you go away. Turning such people around to get on your side may be the greatest challenge of all. 

The Answers

So what are the answers to these challenges? Needless to say, one should take heart for all is not lost. Having developed two 3D printing labs at separate institutions (St. Louis Children’s Hospital/Washington University School of Medicine; Rhode Island Hospital/The Warren Alpert Medical School of Brown University), the answers differ to some extent based upon the specifics of each institution.

To cut to the chase, however, one must speak to hospital administrators in the language of dollars and cents. This may require some research into the business models of hospital finance. In general, hospitals get paid based on DRG (diagnosis-related group) codes, meaning that they often receive a flat fee for specific procedures, regardless of the costs incurred. As a result, custom models are often not directly reimbursed and can significantly cut into the profits of these institutions. Demonstrating a clear cost saving for models ordered for some of these procedures can translate goodwill into concrete financial benefits.

A close evaluation of financial records will demonstrate to most institutions that they are currently spending on the order of hundreds of thousands of dollars for custom models for surgical planning. Moreover, common sense dictates that patient-specific, 3D printed models will only continue to grow in popularity among physicians as more and more become convinced of their benefits. Logic, similarly, would dictate that supporting an in-house manufacturing lab would not only allow the printing of models for a fraction of the cost of commercial entities but that this would serve as an important cost-containment device for the future, as this technology is forecasted to grow exponentially.

Support from the top is frequently critical to get such processes underway. Middle management is often eager to please when they realize that key figures in the organization are invested in your success. Once the financial backing is obtained, full-time technicians may need to be hired to run and maintain these machines. As noted, few individuals exist with the full set of skills necessary so most training is on-the-job. Thankfully, support and advice are frequently from a small but enthusiastic cadre of labs like ours who have started from the ground up.

Most importantly, few undertakings ever get accomplished without passion. The greatest challenge, then, is simply finding that individual with the right spark to get the fire going. Could this be you?

About the Author:

Albert S. Woo, MD, FACS is a board-certified plastic and reconstructive surgeon who specializes in the treatment of cleft and craniofacial anomalies. This work has led to a particular interest in three-dimensional imaging and printing of complex surgical models. He is an Associate Professor of Surgery, Pediatrics, and Neurosurgery at The Warren Alpert Medical School of Brown University and serves as the Chief of the Division of Pediatric Plastic Surgery, Director of the Cleft and Craniofacial Center at Hasbro Children’s Hospital, and Director of the new Lifespan 3D Printing Laboratory.

Besides medical 3D printing, Dr. Woo’s clinical interests include the surgical treatment of patients with craniosynostosis, complex and syndromic craniofacial abnormalities, and cleft deformities. In particular, he is internationally recognized as an expert in cleft palate repair, after having developed a new surgical technique for this procedure. He is also nationally recognized for his expertise in Endoscopic Craniosynostosis Surgery, with numerous papers and national presentations on the subject. With more than 60 peer-reviewed publications, numerous chapters and a book, Dr. Woo remains committed not only to clinical excellence but also to advancing research in the treatment of craniofacial anomalies.

Dr. Woo currently is a member of numerous societies including the American College of Surgeons, the American Society of Maxillofacial Surgeons, the American Cleft Palate-Craniofacial Association, the American Association of Plastic Surgeons, and the American Society of Plastic Surgeons. He is the recipient of numerous awards, including recognition by Best Doctors in America since 2011 and Castle Connolly’s Top Doctors.

Dr. Woo was a speaker at our 3DHEALS Boston event last year (2018).

The post Challenges Facing 3D Printing in Reconstructive Surgeries appeared first on 3DHeals.

Hui Jenny Chen, MD and Michelle Gabriel, MS, MBA

(This blog is adapted from our A Roadmap from Idea to Implementation: 3D Printing for Pre-Surgical Application: Operational Management for 3D Printing in Surgery)

Printer/material selection:

For comprehensive lists of printing process/printers and materials used for healthcare 3D printing, the readers can refer to our book or return to see an updated list later this month.

1. Printers:

Key performance characteristics in selecting printers include the followings [36]:

– Speed

– Resolution

– Autonomous operations

– Ease of Use

– Reliability

– Repeatability

– Material/Multi-material capability

Of this list, speed is the most important issue for pre-surgical use since the need for the model may be urgent but printing usually takes hours and sometimes days. Improvement methods vary by process and include changing the printer head movement from a Cartesian to a Delta configuration (which allows for shorter paths from one point to another), optimizing the movements of laser, and using higher quality components. The multi-material and multi-head capabilities are also of particular interest. For example, models of the heart with color-coded parts such as veins, arteries, etc. can be made faster if the sections are not made piecemeal. Models for surgical practice often require materials with different haptic properties and would be made much faster if, once again, the complete model could be made at once and not in a piecemeal fashion.

2. Materials:

There are only a handful of 3D printing materials that are biocompatible and can be readily sterilized. [47] A variety of materials with different strength, elasticity, color/transparency will provide additional benefits for pre-surgical 3D prints. In addition to added materials, new sterilization techniques that do not require high temperature or toxic chemicals, and techniques that require less time will all prove useful in the future.

Currently, different 3D printer manufacturers also produce 3D printing materials presumably optimal for their printers. Therefore, the ultimate purchase decision should start with the current and potential future applications for which the printers are intended.

Three questions need to be answered:

1) Primary applications of the 3D printing — the requirements in terms of resolution, color, and texture of a model for conceptual purpose or device prototyping are significantly less than a model intended for hands-on practice before a complicated surgery. If the model were to be extensively used in close proximity to the surgeon intra-operatively, then selecting a system that avails more options in sterilizable material selection would be important.

2) Size of the print — this could be related to the specialty for which the setup is intended. For example, the print size capability of a system dedicated for craniofacial reconstruction will be very different from a system dedicated to Orthopedics. A printing system shared among different specialties will require a large enough platform for everyone, and therefore, it will be more expensive.

3) Other future healthcare-related 3D printing activities — other than pre-surgical applications, there are a variety of existing and future healthcare applications, from medical training, rapid prototyping, research, to patient-specific implantable devices. If one was to invest in a 3D printing system, calculations for potential future revenue stream may be necessary during the selection process. A 5- to 10-year revenue strategy may be necessary. We will elaborate more on this in the financial section.

Software selection:

1. The cost to use — open vs. commercial software.

“Free” may not be “cheap”. The cost of using free open source software includes lack of documentation or instruction, lack of technical support in case of dysfunction, lack of continuous development or updates. Although this is a viable option for users with a small 3D printing budget and technological savvy, be prepared to invest a great deal of time at the beginning to learn to use the software. Lack of time is often prohibitive for busy clinicians to learn the software themselves. Commercial software like Mimic (Materialise, Belgium) has very expensive annual licensing, discouraging many who only want to experiment with 3D printing. Nonetheless, these commercial options have more intuitive designs and great technical support and often offer personalized education/instruction time for users to fully grasp 3D printing within a very short period of time.

2. Future trend — automation and streamlined workflow.

Segmentation is the most time-consuming step of DICOM to STL conversion. Anecdotally, one radiologist can spend up to 13 hours to segment a complex heart model. Others have spent less time but still often in hours of magnitude. Automated segmentation will be a significant future development in the software area and will prove to be extremely valuable for cost-saving improvements. Additionally, more streamlined workflow from imaging acquisition to 3D prints from a software perspective is also what many users are hoping for. According to recent interviews with field experts, many larger PACS vendors are now developing DICOM to STL conversion capability with their newer software versions. Segmentation tools are also included in these newer versions. Many existing 3D printing companies are also actively developing products that are more user-friendly especially to the healthcare industry. Examples of these include Autodesk (CA, USA), and 3D System (NC, USA).

https://3dheals.com/idea-to-implementation-in-house-cost-consideration-for-3d-printing-for-surgical-applications-part-1/

The post Idea to Implementation: Tactical Issues — Printer and Material Selection appeared first on 3DHeals.

Hui Jenny Chen, MD and Michelle Gabriel, MS, MBA

(This blog is adapted from our A Roadmap from Idea to Implementation: 3D Printing for Pre-Surgical Application: Operational Management for 3D Printing in Surgery)

To demonstrate a financial analysis, we have created spreadsheets, which you can use as a basic framework to construct a financial plan for setting up a 3D printing service (Link). [29,30] The following is a discussion of two hypothetical scenarios to demonstrate how this spreadsheet works. Please be aware that the values used could vary widely and should not be used as reference numbers. For example, construction of a dedicated area for a 3D printer is highly variable depending on the hospital, geography, type of machine, regulatory requirements, etc.

In Hospital 3D Printing Service Financial Plan (Link):

Scenario (“Worksheet” part):

A community based subspecialty hospital wants to justify setting up a 3d printing center for cardiothoracic surgeries. They want to expand this service to other specialties but want to start with the cardiothoracic department, using 3D printed models for as part of patient education and pre-surgical planning. For this service, they plan to charge such that after all Medicare and other discounts, they are receiving $4000 per print in net revenue. The hospital has determined that 30 patients out of 300 patients per year would benefit from the model and that the new service will attract two new patients as a result. Thus, the hospital will start their planning calculations for the first year at 32 prints at $4000/print leading to $128,000 in revenue. The two new patients per year each increased additional $40000 surgical revenue to the hospital. Total net revenue is $168,000 for the first year.

Next they determine what equipment is to be purchased based on their application and needs. Since this is used in pre-surgical planning, precision/accuracy, good resolution and sterilizable material are all important. In cardiac cases, time is often of the essence where turnaround time needs to be in 1 or 2 days. Thus, a high speed printer is required. Multicolor is extremely useful in showing complex anatomies including the vascular structures. A typical machine that meets these requirements would be Stratysys Objet500 Connex 3, which costs roughly $300,000 including a maintenance contract.

The hospital has a well-developed radiology team who is versed in 3D imaging. To make the 3D print, a radiologist will spend on average 4 hours more than their usual time, at $200/hr to perform the detailed segmentation. Approximately $26,000 will therefore be spent on radiology time.

The technologist requirement is estimated to start and remain at one half person for 10 years. Their salary is estimated $60,000 per year so the technologist cost is $30,000 per year.

The installation fees (including transportation) is $1000. Remodeling costs are estimated at $400 per square foot in a 150 square foot room, for a total of $60,000. Cost of training is estimated at $5000. It is assumed that any insurance needs are already covered by the hospital, thus no additional insurance is required. Again, these numbers are highly hypothetical and will vary significantly, depending on existing infrastructures.

Results:

The “results” spreadsheet (Table VI) looks at the cash flow over 10 years. First the gross revenue is calculated by multiplying the number of procedures by the amount charged per procedure. The revenue is then adjusted to take into account the mix of discounts and patients with Medicare, Medicaid, etc. Added to this is any additional revenue generated, such as from new patients, over and above that from the new procedure. This sum is the net revenue — the additional cash taken in due to the 3D printing. In our example in the out-source model in Year 1, we have 32 procedures at $5000 per procedure for a gross revenue of $160,000. After discounts ,our revenue drops to $128,000. However, we attract in new patients who have additional procedures. That additional revenue of $40,000 brings our net revenue to $168,000.

Next the costs are accounted for. As described earlier, there are fixed and variable costs, which are seen in the in-house model. For the in-hospital model, there is significant cost of acquisition, which amounts to $367,600.

The annual fixed cost is estimated to be 32,000, assuming an additional half-time technologist is needed. The variable cost is about 800 per print, assuming a total of four hours of post processing time is needed from the radiologists. The total annual fixed cost is therefore, again, 25,600.

The sum of the costs is the net expenses. In our Year 1 case, the costs are what we are paying to set up the 3D printing center and to hire new technologist. In addition, we have additional cost of a radiologist’s time at $200 per print, assuming approximately 4-hour post processing time from the radiologist. The total of these costs are the $425,200 of expenses.

The net income is the difference between the net revenue and the net expenses. If the number is positive, you have a profit. If it is negative, there is a loss. Our example shows a loss of $257,200 for the first year.

The breakeven volume is the number of procedures needed to have no profit — where the revenues and the expenses match. In this spreadsheet, the additional revenue comes from new procedures attracted due to employment of the new technology. We assume two new patients will be attracted for year 1. We also assume a subsequent of 10% increase in new patients in subsequent years. Obviously, patients come in integer, and 10% is more of an average annual percentage growth spread over 10-year period. The Year 1 breakeven is 125 prints. Since we only did 32 prints, we end up with a loss, even accounting for additional procedural revenue.

The net present value (NPV) is the value of the 10 years’ worth of net income in today’s dollars. Due to inflation, $10 today is worth more than $10 a year from now. To determine the total worth of the project for 10 years in today’s dollars, the values for Years 2–10 need to be discounted. The rate at which they are discounted is decided by the analyst. That rate is filled in on the Worksheet tab and is used to calculate the results. Using a 2% discount rate, which is set on B57 on the “worksheet” section of Table VI , we see an NPV of approximately $ $1,359,600 over 10 years.

To be continued…)

Download Financial Spreadsheet for In-House 3D Printing Service here.

The post In House Cost Consideration for 3D Printing for Surgical Applications Part 2 appeared first on 3DHeals.

Hui Jenny Chen, MD and Michelle Gabriel, MS, MBA

(This blog is adapted from our A Roadmap from Idea to Implementation: 3D Printing for Pre-Surgical Application: Operational Management for 3D Printing in Surgery)

Capital costs are one-time, fixed set-up costs incurred on the purchase of equipment or construction after which there will be only recurring operational or running costs. Operational costs include fixed costs, which recur every year, and variable costs, which are volume dependent. All of these costs must be examined when reviewing a proposal for creating an in-house 3D printing facility.

Accumulation of high-quality data on costs is difficult since without a CPT code there are multiple reimbursement pathways and no reliable, repeatable process to collect costs. For example, sometimes, the cost can be bundled in an outsourced pre-surgical process by medical device companies, with a significantly elevated price tag. (Figure 1) However, more often, researchers, providers, surgical centers, and some industrial partners have to absorb the costs of creating the 3D print. Methods to collect and document costs for every case should be employed, as each case can be considered a potential data point in a future larger scale (and possibly multicenter) clinical trial.

Capital Costs

The cost of providing 3D printing service can range from a few hundred dollars to millions, depending on the goal of the medical/surgical center in providing such service. Modest setups for simple models for patient education could have a capital expenditure under $10,000. On the high end of the spectrum, the authors have seen a proposal for a Veterans Association facility requesting $1 million for a fully equipped in-house 3D printing service with high-capacity printers and software. This facility would be performing in-house prosthesis work with significant cost savings that would offset this high initial cost.

Although it may be simple for a hobbyist to set up a printing machine at home, in a medical facility there are many factors to consider. Utilization of this technology is relatively new. Thus, there are many potential environmental, regulatory, and legal issues yet to be properly addressed. For example, certain steps of the 3D printing process may potentially involve or create hazardous materials or work environments. Thus, upgrading facilities to handle power requirements, and ventilation and chemical handling for post-processing operations may cause a significant increase in capital funds required.

Capital costs include the hardware, software, and built out facilities. For a frame of reference, some sample costs to be included in a proposal for capital funding are provided:

3D printer

● Imaging software

● Segmentation software

● CAD/CAM software

● Standard computer for administrative functions

● High powered computational computers

● High resolution monitors

● Fume hood/Ventilation setup

Funding is required to pay for these capital costs. Most academic hospitals can allocate existing research grants to create 3D printing service without expecting any near-term return.

Fixed Costs

Fixed costs remain constant within a range of activities but vary per unit. For example, a technician’s salary is fixed for the year. If there were two technicians, the salary fixed cost would double. The salary is not changed if the facility makes 100 or 1000 3D models.

Fixed costs to maintain a 3D printing facility include personnel salaries, equipment maintenance contracts, facility costs, training costs, cost of material, and the labor involved in creating a final clinical acceptable print.

Ongoing costs of maintaining a 3D printing facility include personnel salaries, equipment maintenance contracts, facility costs, training costs, cost of material, and the labor involved in creating a final clinical acceptable print.

The following are sample fixed costs:

● Technician and Engineer salaries

● Equipment maintenance and vendor service agreements

● Training

● High bandwidth network for file transfer

Variable Costs

Variable costs change in direct proportion to volume.

For 3D printing, the materials are variable costs. The choice of material is huge, and the costs vary widely also. The amount of material used will also vary with each application.

If specific clinician time is charged to a project, that expense can be considered to be variable. If hourly labor was used to make the print vs. a salaried technician, it would be considered a variable cost.

In the next post, we will reveal our initial attempt in generating a financial spreadsheet that will help our audience with their own financial planning for a 3D printing service.

To be continued:

https://3dheals.com/idea-to-implementation-in-house-cost-consideration-for-3d-printing-for-surgical-applications-part-2/

The post In House Cost Consideration for 3D Printing for Surgical Applications Part 1 appeared first on 3DHeals.

Hui Jenny Chen, MD and Michelle Gabriel, MS, MBA
(This blog is adapted from our A Roadmap from Idea to Implementation: 3D Printing for Pre-Surgical Application: Operational Management for 3D Printing in Surgery)

Healthcare is a highly regulated industry. Understanding local healthcare market and reimbursement strategy is essential to the survival and growth of any new medical technology. In order to be eventually viable financially, most U.S. 3D printing service providers need to answer two questions:

How is the service paid now?

There is currently no established stand-alone reimbursement process for pre-surgical planning 3D printing service. Occasionally, services provided by established 3D printing companies such as 3DSystems/Medical Modeling (Denver, U.S.A.) can get paid indirectly by their contracts with a medical device company, who bills third-party payers for the cost of the medical device which includes 3D printing services.

For example, craniofacial reconstruction surgeons will use the pre-surgical planning 3D printed models and/or cutting guide made by Medical Modeling, Inc. (3DSystems, Denver, U.S.A.), who has a contract with Stryker. Stryker bundles 3D printing services under a single medical device fee, and the hospital bills third-party payers for it. (Figure 1)

Figure 1. An example of current 3D printing reimbursement process (arrows represent direction of payment)

The result of such bundled billing is a lack of cost transparency. As the interest in 3D printing for surgical planning grows, however, more providers are now willing to pay out-of-pocket either at full price or at a negotiated price with 3D printing companies directly for similar services, bypassing any third-party (Figure 2). There is a trend towards more existing commercial 3D printing service providers venturing into the pre-surgical 3D printing arena. For example, Anatomics (St Kilda, Australia), 3D Ops (Tennessee, USA), and Whiteclouds (Utah, USA).

Figure 2. An example of future 3D printing reimbursement process (arrows represent direction of payment)

Additionally, a growing number of larger healthcare organizations and academic hospitals, such as the Harvard hospitals, Mayo Clinic, and Cleveland Clinic have dedicated significant internal research and development grants to develop in-house 3D printing centers. However, payers currently do not reimburse expenses for 3D printing at all if performed “in-house” or “in-office”. Thus, currently, 3D printing service appears to add costs to the overhead of health care facilities. Some have suggested potential cost savings for the hospital to provide 3D printing service as part of the surgical care, but these remain to be anecdotal [27].

How will the service be paid in the future?

For either “in house” and “outsourced” 3D printing services to be paid consistently, future work must be done to a have a procedural terminology (CPT) code created and the associated professional and facility fee assigned. The reimbursement for the physician and hospital services would then need to be negotiated with payers, insurance groups and the Centers for Medicare and Medicaid Services (CMS). [27] To achieve such “code-able” status by the AMA (American Medical Association) [48], the procedure must be officially recognized as part of patient care, which has demonstrated sufficient clinical evidence that the procedure improves patient outcomes.

Although many recent papers have documented significant improvements associated with multiple outcome metrics including reducing operating time and surgical accuracy [13], the results are still too early and too little to convince the payers. Another added challenge also includes lack of an advocacy entity for this purpose. However, this will likely change as the field matures.

https://3dheals.com/idea-to-implementation-in-house-vs-outsourced-3d-printing-for-surgical-applications/

The post Idea to Implementation: Reimbursement, the Elephant in the Room appeared first on 3DHeals.

Hui Jenny Chen, MD and Michelle Gabriel, MS, MBA
(This blog is adapted from our A Roadmap from Idea to Implementation: 3D Printing for Pre-Surgical Application: Operational Management for 3D Printing in Surgery)

Clinical trial design should be an important part of the strategic consideration because more clinical evidence, especially in terms of clinical efficacy and outcomes, will strengthen arguments for reimbursement. According to ClinicalTrials.gov [52], a registry for clinical trials maintained by NIH and NML, “a clinical trial is a research study in which human volunteers are assigned to interventions (for example, a medical product, behavior, or procedure) based on a protocol (or plan) and are then evaluated for effects on biomedical or health outcomes.”

Good clinical trials serve several major purposes such as:

a) Informing consumers about the values of this technology.

b) Preparing data for new CPT coding and other reimbursement strategies from payers.

c) Inspiring creative innovations.

Data on clinical outcomes is crucial. In recently published studies, researchers have been focusing on the following outcome metrics: operating room time, hospital stay, surgical complication, and post-surgical accuracy. Non-quantitative outcome metrics include patient/family satisfaction.

There are two public clinical trials registered on clinicaltrials.gov for pre-surgical applications (Link). The first one is a recently completed randomized controlled clinical trial (Link) from Cleveland Clinic, “Acetabular Shell Positioning Using Patient Specific Instruments” which has shown a statistically significant increase in anteversion accuracy when using a 3D printed surgical guide over traditional planning methods in total hip arthroplasty (THA) [31]. A limitation to the study is a modest sample size of 36 patients although it is larger than most recently published studies. A second drawback of the study is the lack of information on other clinical outcomes, including hardware loosening and failure as a result of inaccurate placement. This latter issue will require long-term, continuous follow up with the patients.

The second study is currently enrolling (Link). It is focusing on 3D printed patient-specific simulations for endovascular aneurysm repair as a pre-surgical training tool.

https://3dheals.com/ideas-to-implementation%e2%80%8a-%e2%80%8awhat-are-the-major-operational-management-challenges-in-using-3d-printing-for-pre-surgical-application-today/

The post Idea to Implementation: Clinical Trials For 3D Printing Applications appeared first on 3DHeals.

Idea to Implementation: Talent Allocation in 3D Printing for Pre-surgical Applications

Hui Jenny Chen, MD and Michelle Gabriel, MS, MBA
(This blog is adapted from our A Roadmap from Idea to Implementation: 3D Printing for Pre-Surgical Application: Operational Management for 3D Printing in Surgery)

Currently, most medical centers rely on individuals who are 3D printing enthusiasts. These staff members are motivated and capable of learning new skills, often on their own time without additional compensation. Over time, as the demand for 3D printing increases, many centers will find themselves exhausted of manpower. Ultimately, letting hobbyists man the 3D printing center is not viable for a professional operating facility. To provide reliable 3D printing services consistently, talent allocation needs to be addressed. Typical skills necessary for staffing such center include the following:

a. Basic medical imaging knowledge: Knowing if the quality of the images acquired is adequate for 3D printing is crucial. This will require staff to understand the imaging protocol and why certain images cannot be used for printing

b. Good CAD/3D software understanding: Training staff to use basic (and sometimes open-source) 3D printing processing software is time-consuming. Familiarity with 3D visualization software will make the learning curve much lower.

c. Understanding of 3D printing hardware: Basic maintenance is often required when working with 3D printers. Although an engineering degree is not necessary since most commercial printers are fairly user-friendly, understanding the basic mechanics is necessary for troubleshooting.

d. Basic medical knowledge: Having a basic understanding of the clinical case is important to produce high-quality prints, with more attention to clinically relevant aspects of the case. This should also lead to better quality control of the final product.

Within the medical community, radiologists and radiological technicians are currently equipped with these professional characteristics and have the lowest barrier to entry to staff a 3D printing center. Due to the high cost of hiring a dedicated physician, the best choice to staff these centers is a highly trained and experienced radiological technician who is well versed in 3D software.

Many larger imaging centers have dedicated imaging post-processing labs (“3D labs”), where the technologist’s main role is to use various visualization tools to create 3D images for various clinical purposes. These staff members are ideal for future 3D printing centers because of their experience with existing post-processing software. If the volume for 3D printed models does not reach a level where a full-time technologist is needed, many of the same staff members can also be productive in other areas of the department.

Idea to Implementation: Clinical Trials For 3D Printing Applications

The post Idea to Implementation: Talent Allocation in 3D Printing for Pre-surgical Applications appeared first on 3DHeals.

Hui Jenny Chen, MD and Michelle Gabriel, MS, MBA
(This blog is adapted from our A Roadmap from Idea to Implementation: 3D Printing for Pre-Surgical Application: Operational Management for 3D Printing in Surgery)

Depending on existing infrastructure, creating an in-house center can be very expensive and require hard-to-find expertise. Often, it is not a viable initial option for smaller medical centers. Except for imaging acquisition, outsourcing is an option along each of the remaining six steps of the 3D printing workflow. Outsourcing these steps allows the medical center to bypass the initial cost/risk and associated operational challenges of creating an in-house service. Currently, several established companies like 3D System(NC, USA) and Materialise (Belgium) provide such services beyond their core businesses, including services on DICOM conversion, segmentation, and printing all-in-one services. The cost of these services can often amount to thousands of dollars. Although the absolute dollar value appears high for such services, in high-risk, rare, and complex surgical cases, the relative cost of adding a 3D printing step is actually tolerable to most healthcare providers.

However, on the other end of the spectrum a larger academic center may be prepared to heavily invest in creating a centralized 3D printing center. The Mayo Clinic was one of the first medical centers to demonstrate its investment (51) It has made significant strides in exploring the innovative use of the technology, creating quality standards, and generating global influence in this field. Almost all the surgical departments, from pediatrics, neurosurgery, to orthopedics, are now routinely using their 3D printing service. The widespread acceptance of the technology within the Mayo Clinic has significantly increased the case volume and helped to justify the cost. It is now one of a few go-to institutions for educating clinicians and 3D printing industries about medical 3D printing, which acts as additional revenue stream.

Providers should consider the following questions when making the decision on creating an in-house 3D printing service versus using outside vendors:

What is the existing infrastructure that could be used for 3D printing?

Existing personnel and software may be available to be part of the new service. For example, several larger hospital systems including Cedar Sinai and the Kaiser Permanente groups have existing funding for innovative projects such as simulation programs that include 3D printing services. Medical centers with comprehensive imaging services are often equipped with high-quality imaging hardware that can generate high-resolution medical images required for 3D printing. Some newer scanners (e.g. GE) are already equipped with existing 3D printing protocols from various popular prosthetics or device companies. Additionally, many imaging and medical centers have purchased licenses for popular 3D visualization software packages such as Vitrea (Vital, USA), which contains many similar post-processing functionalities to other 3D printing specific software. Some of the larger companies like GE and Siemens, are already adding 3D printing functionality into their newest software. Highly-trained technicians who are already familiar with post-acquisition imaging processing already have many of the skills required for 3D printing. The learning curve for these centers will be significantly less steep than a center without experienced personnel in 3D visualization software.

What is the turn around time required for the applications?

Turn around time is a critical factor to consider as many surgical cases are urgent and need to occur in a timely fashion. The medical center needs to identify the slowest point among the production steps and investigate if the most time-consuming step can be performed faster if outsourced. Good and effective communication between the requesting clinicians and the 3D printing team is the most important step to quickly conceptualize the best 3D printing strategy. Because many surgical cases require more timely response, a few major academic hospitals, like Boston Children’s Hospitaland the Mayo Clinic, have officially incorporated 3D printing for surgical planning as part of their Electronic Healthcare Records (EHR). Ineffective initial communication with either in-house or outsourced 3D printing services will prove costly in time and money. The next most time-consuming and labor-intensive step is segmentation and image post-processing. If in-house bioengineering and/or 3D software expertise are already available, then it is much easier to keep this step in-house, since communicating to a multidisciplinary clinical team can be more effective when the engineering step is completed in-house.

On the other hand, some outsource vendors have experienced design/engineering teams who can offer faster printing and shipping/transportation strategies. They may more quickly scale and modify production to shorten turn around time and meet the demand.

What is the equipment needed to achieve the end point?

Software and hardware requirements will highly depend on the goals of the 3D printing center. For example, the resolution and material requirements for creating a pre-surgical educational model for the patients or medical students will be much less than a pre-surgical model intended for a pediatric cardiothoracic surgeon to simulate the intra-operative environment for complex congenital heart disease. Flexible materials which cost significantly more than typically used resins may be needed for pre-surgical models for complex vascular surgery. The size of the model required will also help determine what hardware is needed. For example, a pediatric heart model is small enough to fit inside the popular desktop SLA printer Form 2 (FormLabs , USA) but an actual sized adult pelvis will not fit.

How much does the clinical team want to be involved in the printing process?

In general, when extensive multidisciplinary communication among different clinical and engineering teams is needed, an in-house 3D printing service is intuitively more efficient and convenient for rapid prototyping and correction of errors and defects in the model. The cost and time of re-designing and reproducing a model will increase significantly with outsourcing.

Again, the steps where clinical team involvement can occur are variable depending on individual cases. For example, in complex maxillofacial cases where the surgeons often want to see a variety of surgical strategies, it may make sense to keep the design/segmentation steps in-house and outsource the final printing with an outside vendor. Models intended for educating patients (patients’ families) and students/residents usually do not require extensive in-house multidisciplinary discussion and can be outsourced easily.

What to look for when selecting for an outsource vendor for pre-surgical 3D printing:

Given the promise of the healthcare market, more and more 3D printing companies are now interested in providing services to healthcare providers. Because of isolation from the healthcare facility, it is important for outsource vendors to understand and respect the sensitive nature of the medical record. It is imperative to prepare a HIPAA compliant data transfer process. Currently, some hospitals use LifeImage (MA, USA) as a way to transfer images. For complex cases, the ability to effectively communicate with the radiologist and treating clinicians requires the vendor to have certain healthcare familiarity or clinical experience. Even with experienced vendors, occasional unsatisfactory products may still be produced and it is important that the vendors can provide adequate customer service to either effectively rectify the mistakes or design backup plans in case of such failure. For example, making multiple versions of the prints with different design or structural emphasis is one such strategy.

Table V summarizes the pros and cons for in-house and outsourced solutions. Many facilities will start with a combination of in-house and outsource services. Depending on the clinical needs, medical centers now have many choices in combining the two services to achieve optimal results. There is also a new growing trend of collaborative works between specialized 3D printing companies with large healthcare systems. (53)

Table V. In House vs. Outsourcing: Pros and Cons

https://3dheals.com/idea-to-implementation-talent-allocation-in-3d-printing-for-pre-surgical-applications/

The post Idea to Implementation: In House vs. Outsourced 3D Printing for Surgical Applications appeared first on 3DHeals.