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October 31, 2022
2 Min Read
Image courtesy of Robert Kneschke / Alamy Stock Photo
Hospital staffing shortages continue to be a major problem in the United States, significantly impacting patient care. For many medical device companies, this crisis has also impacted procedure volumes, which is directly tied to revenue.
Transcatheter aortic valve replacement (TAVR) procedures have taken a particularly hard hit from hospital staffing shortages.
Mike Mussallem, CEO at Edwards Lifesciences, told analysts during the company's third-quarter earnings call that he's heard it may take U.S. hospitals "a year or two" to improve their staffing situation. That said, he and other Edwards executives on the call emphasized that there is a lot of variability across the country with hospital staffing shortages impacting procedure volumes more severely in some places than in others.
In a study done earlier this year, the U.S. Bureau of Labor Statistics reported that more than 275,000 additional nurses are needed from 2020 to 2030. Employment opportunities for nurses are projected to grow at a faster rate (9%) than all other occupations from 2016 through 2026, according to the study.
The hospital staffing shortages have had a particularly heavy impact on TAVR procedures compared to other types of procedures because there is a lot more upfront work required before a patient even gets to the operating room, explained Larry Wood, the company's corporate vice president of TAVR. Patients are required to have a CT for sizing purposes prior to the procedure, and they often need an angiogram as well in order to screen for heart disease.
"So, when we talk about staffing issues, you know a staffing issue at any link in the chain can cause patients to move a little bit slower through the system," Wood said.
Edwards reported sales of $1.32 billion in the third quarter, which represented a growth of 6.7% on a constant currency basis, but this represented a shortfall compared to expectations. While U.S. hospital staffing shortages were largely to blame, a particularly bad surge in COVID cases in Japan was another driving factor, the company noted.
Scott Ullem, CFO and corporate vice president at Edwards, said the company now expects its full year 2022 sales to land at the low end of the company's previous forecast of $5.35 billion to $5.55 billion, and TAVR sales are expected to fall at the low end of the $3.5 billion to $3.7 billion forecast.
Despite the current hospital staffing shortages in the United States, Edwards still expects the global TAVR market opportunity to be valued at $10 billion in 2028, Mussallem said.
"It's important to remember the patients are out there, and they need to be treated, and the physicians are still very motivated to get these patients treated, and they're as frustrated as anybody else is," Wood said.
Hospitals also have a financial incentive to improve procedure volumes, he added.
"It's going to take time because you can't just create nurses from scratch quickly, but people are working really hard on getting this into a better place," Wood said.
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