ClearCount Medical aims to control surgical sponge detection market
David Palmer
David Palmer thinks ClearCount Medical Solutions’ technology will push it over the top in the burgeoning surgical-sponge-detection market.
ClearCount, which uses embedded radio-frequency ID chips to track and detect sponges, has the backing of Draper Triangle Ventures as it wrestles with two major competitors for control of the market. After raising $3.4 million last year in a Series A round, ClearCount is looking for more.
ClearCount has already received federal regulatory approval to market two versions of its sponge counting and detection system, and is investigating branching out into other markets, such as metal surgical instruments. Palmer said the company is looking to increase 2010 revenues by as much as six-to-eight times over last year, though he wouldn’t share specifics.
ClearCount’s foray into the market comes at an opportune time, as Medicare in 2008 halted payments for so-called “never events”–serious, avoidable and costly medical mistakes, such as leaving a sponge inside a patient after surgery. Still, the 22-employee company’s success (or that of its competitors) is far from assured. A simple–and obviously cheap–counting procedure detects 82 percent of sponges left behind in surgical procedures, according to a May 2009 article in Surgery, raising questions about how necessary sponge-detection technology really is.
Nonetheless, ClearCount, which was founded in 2004, appears well-positioned if and when the market takes off. Palmer joined the company in 2006 after working for about three years as operations chief for influential economic development group Pittsburgh Life Sciences Greenhouse. Prior to that, he worked for about 10 years in hospital administration at UPMC, a $8-billion health system in Pittsburgh.
Palmer spoke with MedCity News about what separates ClearCount from its competitors and what it hopes to do with its next round of venture funding.
Q: How does your technology work and what problem does it solve?
A: Our first product offering is focused on patient safety in the operating room. The issue we’re addressing is retained surgical sponges, and we do that by leveraging RFID technology. We place an RFID chip inside of surgical sponges and that allows us to not only count and account for every sponge, but it also allows us to detect every sponge if one is missing from the count. Retained sponges represent both the most dangerous and most frequent retained surgical items, and are estimated to occur one in every 1,500 intra-abdominal surgeries in spite of rigorous manual-counting procedures.
Q: Talk a little bit about the competitive landscape of the surgical-sponge-detection market.
A: There are two other solutions in addition to ours that are currently on the market. One utilizes barcoding technology (SurgiCount Medical–Editor). The other utilizes what is called electronic article surveillance technology, known as EAS (RF Surgical Systems–Editor).
There are clear differences between us and both of those. The barcoding solution is a counting-only solution and doesn’t offer detection benefits. The EAS solution is detection-only and because of technical limitation isn’t capable of counting. So we’re the only solution that can handle counting and detecting. Having both elements is critical in preventing the problem.
Q: How much investment funding has ClearCount received to date, and from whom? Do you expect to seek any more in the near future?
We’ve to-date raised just under $11.5 million. We will be seeking additional capital this summer for expansion and growth for a Series B round. I’d prefer not to say how much. The primary source of our venture funding is Draper Triangle Ventures.
The proceeds of our Series B would be for working capital to meet market demand for our product, plus building inventory and manufacturing. We don’t anticipate increasing the headcount in the company significantly over the next year.
Q: What are one or two key milestones you hope ClearCount hits over the next year or so?
We’ve recently announced a strategic sales and distribution partnership with Medline Industries. We’ll be leveraging their talented sales force, and it’ll be important for us to continue to develop that relationship.
Also, tracking and counting surgical instruments is one of the other things we’re pursuing from an R&D standpoint. We received a $1.1 million NIH grant focused on instrumentation a couple years ago, so we’ve made progress related to an instrument solution. One of the challenges associated with instrumentation is the ability to have a metal-encapsulated tag that would withstand repeated sterilizations.
Q: Are you aware of any state or federal laws that require sponge or surgical instrument counts in operating rooms? Do you think something like that would be beneficial to patient safety, or would it be unnecessary?
A: The Association of periOperative Registered Nurses, which is a large trade organization for operating room nurses, currently publishes recommended guidelines for counting surgical sponges in the operating room. There are strong recommendations related to procedures for counting. Historically those have been focused on the manual process, but we anticipate the revised policy will encourage the evaluation of technologies to eliminate errors. They revise their polices every three years, and they should be releasing an update in the next four-to-six weeks.
I’m not sure a government mandate will eliminate the problem. These are clearly accidents that usually occur when other disruptive events are going on in the operating room. Our solution automates what has typically been an error-prone manual process, and I think technologies like ours are clearly the future of a safer operating room.
Categories: MedCity News eNewsletter, SYN, Top Story
To begin with, Mr. Palmer fails to state whether he has any paying hospitals in which he has his systems installed despite having FDA clearance a number of years ago. Something is amiss when RF Surgical Systems reports that they are in over 100 hospitals and are adding more each month, but his system has failed to gain any traction.
He also fails to discuss the cost of his system for a Hospital per surgical case. I believe his system is significantly more expensive because his RFID chips and tagged sponges are more expensive than those of RF Surgical Systems.
The standard of care is to manually count sponges. Why count them twice when you can use the efficient and less expensive RF Surgical System Detection System to detect any retained or missing sponges in a matter of seconds 100% of the time. To my knowledge, RFS has never had a retained sponge in thousands of cases over the last three years. There is simply no need to add RFID counting when the detection system works – and that is what seems to be the case with their competitor, RF Surgical Systems Inc.
Lewis L Bruggeman MD
by Lewis L Bruggeman MD on May 1, 2010 at 12:10 pm
The comment above sounds like an ad disguised as a comment for a competitor product :)
by George on May 2, 2010 at 3:38 am
Comments made under the cover of “I believe” and “to my knowledge” indicate that Dr. Bruggeman either isn’t aware of the facts as he should be to make these assertions or he definitely has an ulterior motive that George referred to. Dr. Bruggeman also has posted comments on the article announcing the Cardinal/Surgi Count deal, another competitor! What a coincidence!
by Samuel on May 5, 2010 at 3:13 pm
Both the Bar Coded sponges RF Systems will be an additional unnecessary cost to the OR since the physical count would need to be done as well. If the physical sponge or Instrument Count is off, the wand may be helpful if it could detect instruments or radiopaque sponges.
I am going to present to Covidan a counting system that will make life much easier for the scrub person and the RN circulator in facillitating the counts, a swell as measuring the blood loss.
I have been an RN in the Operating Room for over 40 years.
by Margaret Stackhouse, RN OR Staff on Jul 17, 2010 at 12:18 am