Masimo & At-Home Continuous Monitoring | In Practise

Masimo & At-Home Continuous Monitoring

Former Strategic Director at GE Healthcare

Learning outcomes

  • How OEM's integrate Masimo and Nellcor
  • Obstacles for hospitals adopting continuous monitoring hardware and software
  • A hospital's typical wireless monitoring setup
  • How Apple could compete with Masimo in continuous monitoring

Executive Bio

Daniel Halstead

Former Strategic Director at GE Healthcare

Daniel has been working within pulse oximetry for the last 40 years. He started in the operating room as an anesthesiologist and saw the transition from non-pulse oximetry to pulse oximetry plus the improvements Masimo’s SET technology had on the industry. He then spent 7 years running Product at Ohmeda, one of the original developers of pulse oximetry, and then spent 14 years at GE Healthcare, which had purchased Ohmeda. Daniel now advises hospitals and OEM’s on at-home monitoring and pulse oximetry. Read more

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Disclaimer: This interview is for informational purposes only and should not be relied upon as a basis for investment decisions. In Practise is an independent publisher and all opinions expressed by guests are solely their own opinions and do not reflect the opinion of In Practise.

Daniel, could you begin by giving a short introduction to your background, please?

I began my work with pulse oximetry in the operating room. I worked with a group of anesthesiologists in the 1980s and saw the introduction of pulse oximetry. I saw that transition from a non-pulse oximetry anesthesia environment, with the introduction of pulse oximetry, first here in anesthesia and then migrating to other critical care areas within the hospital. Following my clinical work, I transitioned to Ohmeda, one of the original developers of pulse oximetry technology and then Datex-Ohmeda and, subsequently, General Electrics’ healthcare division, which had purchased Datex-Ohmeda.

While at GE, I worked with a multitude of different vendors of pulse oximetry technology and had an opportunity to work with all of the potential introductions that were coming down the road and see how they might work clinically, integrating into the critical care environment, as well as into other areas such as homecare and home healthcare, where you might see pulse oximetry becoming much more of a standard of care, as it has done in the hospital.

How did the pulse oximetry market change and, more specifically, how did it change when Masimo entered with their SET technology?

We really look back at the 1980s as a transition from a box environment. The original cost of pulse oximeters, here in North America was between $8,000 and $10,000. As the pricing for that box was reduced, we then saw the transition to the sensor. The focus became much more on the technology and its offerings, especially in its consistency in producing information and its ability to integrate that information into monitors within the hospital environment.

Throughout the 1990s, pulse oximetry technology was very focused on sensors and usually, on those single patient use sensors, so that we could assign a sensor to the patient and that sensor would follow the patient throughout the hospitalization. Typically, with the discharge of that patient from the hospital, that’s where that monitoring ended and it did not continue into the home environment.

As Masimo entered the market, we had leaps forward in the technology and its ability to reduce artificial problems, which are widely recognized today, within the hospital environment, as a key problem, especially on the nursing floors, where the technology may produce false alarms or fall off the patient. It’s a source of frustration as well as a documentation issue for hospitals. Masimo has really modified the environment of pulse oximetry monitoring within the hospital, by improving the technology, leading to clear and consistent and reliable monitoring.

You mentioned that you worked for GE, with many different devices. Were you integrating the SET technology, as an OEM, into your products?

Yes, GE did integrate several different manufacturers of OEM technology and offered those to a variety of different customers, in different physical forms, so that we could ensure we met the clinical needs of the customer, based upon their standardization within the hospital environment.

They were asking Masimo, effectively, for the SET technology?

Exactly. In many areas, it was the standard of care within the facility. We saw the Nellcor Covidien technology as a standard of care within many facilities so you wanted to ensure, with that standardization of the monitoring product, that you met the customer’s needs for standardization with pulse oximetry, in all of the clinical areas of the hospital.

How would you compare Nellcor and Masimo?

Nellcor certainly became the market leader as we look back to the late 1980s and 1990s because of the wide variety of different sensors, as well as their very aggressive OEM strategy. My personal belief is that Masimo recognized that strategy and really took advantage of it, in offering a multitude of OEM solutions, as well as technical improvements that were recognized by many people as clinical enhancements. I think Masimo really took the book that Nellcor had written, rewrote it to their own advantage and then had a very strong marketing push on a technology level, an OEM level and a clinical level, that has positioned them very well in today’s market, for that high-end hospital customer.

A narrative that we’ve heard about Masimo taking Nellcor market share is that, first of all, Joe Kiani, the Masimo CEO, I believe went to Congress and eliminated some of the kickbacks that Nellcor was throwing into the mix. The other factor was that the technology seemed to win out for Masimo versus Nellcor and it seems as if Nellcor has been a bit of a hot potato, passed around different owners. It appears that Masimo, with its more focus and not being part of a conglomerate, have really been able to invest in the category more than Nellcor did. Are those accurate ways of thinking about how Masimo began to take share in this market?

I would definitely agree with that assessment. I believe Nellcor, essentially, stalled out in their technology development. As we look back at the late 1990s and early 2000s, as Masimo entered the marketplace, Nellcor went through a series of different owners and they lost their focus. With the acquisition by all of those different companies, it became a much smaller portion of the product line of all of those medical device companies. We just didn’t see the investment, both in the technology, as well as the marketing of those devices. I think they fell behind with their OEM placements, as well as the technology itself.

Masimo, took a multi-pronged approach, from a technology perspective, a clinical perspective and, in many ways, an ease-of-use perspective in their approach to the clinician, ensuring a good quality signal. For many clinical areas within the hospital, the simple issue of consistent and reliable readings is absolutely critical because it’s very time intensive to continually return to that patient, find a new sensor location and ensure that you are not providing alarms. As we look back at where both Ohmeda and Nellcor began, it was in the operating room, where the introduction of pulse oximetry was first recognized as a significant clinical value. Of course, the majority of those patients aren’t moving. As we transition to other areas of the hospital, patient movement and the dislocation of the sensor both became a problem and Masimo capitalized on that and their technology overcame many of those clinical issues that the customers were facing on a daily basis. They were a source of frustration for the nursing staff, respiratory therapy and many others that literally produced problems throughout the hospital. As we look at things like electronic medical records, that loss of consistent and reliable documentation of that information was a critical issue, recognized not just by the clinicians, but throughout the facility, as things such as reimbursement, billing and accurate medical records became much more important.

Masimo has capitalized on a number of areas. Technically, from a vendor perspective, with their very broad OEM relationship base, and from the clinical perspective, they’ve done an excellent job and I expect that would continue.

Nellcor had this huge position in standard of care and I’m trying to understand, from the hospital and the sales person’s point of view, at what point do they say, we’ve been using Nellcor for seven, 10, 15 years and our contract is coming up; we’re going to switch to Masimo, even though it’s a little bit more expensive; they have the clinical support. Do you have any insight into how that decision is made from the hospital’s perspective?

From the hospital’s perspective, a transition in pulse oximetry technology is often based on that decision to update their monitoring systems. Typically, we see the traditional ECG, blood pressure and pulse oximetry monitor at the bedside upgraded or completely replaced about every seven to 10 years. In the majority of situations, hospitals are basing their decision on new pulse oximetry integration along with that monitor replacement. What you will see is that the vendors will work together. Philips, GE, Spacelabs and others will, essentially, partner with both Masimo and Nellcor to ensure that they meet whatever future decision is made by that hospital.

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