Company develops surge protection for surgical equipment
BOULDER, Colo. -- Encision Inc. hopes a new face and a new place are the changes it needs to gain more sales of its safety-oriented surgical equipment.
The Boulder company, founded as Electroscope in 1991, makes surgical instruments and monitors, which are used in more than 400 hospitals for laparoscopic surgeries. Notable medical schools, including the University of Louisville's School of Medicine and the Texas Tech University Health Sciences Center, incorporate Encision's patented Active Electrode Monitoring tools.
Getting here hasn't been easy. After turning its first profits in recent years, Encision is in the red again this year after increasing its sales efforts.
Still, founder Roger Odell believes there is room to grow as hospitals, medical groups and surgeons learn about the protection Encision's devices provide to patients.
More than 4 million laparoscopic surgeries are performed each year nationwide, and while the number of injuries resulting from them is small, Odell says the significance of those that do occur is enough for practitioners to take notice.
"It's not a matter of if, but of when" the safety issues become widely known, Odell says. A new head executive and a new headquarters, both of which came this summer, should help Encision spread the word, he says.
Ensuring safety
Surgeons use laparoscopy for a variety of major procedures, including gallbladder removals, appendectomies, hysterectomies and gastric bypasses. Laparoscopy employs a scope, allowing doctors and nurses to watch a television monitor as they steer instruments -- with diameters the sizes of drinking straws and lengths between 35 and 45 centimeters -- through the body.
The technique requires much smaller incisions than open surgeries, speeding recovery times. Ultra-hot electrical currents may also be used for coagulating blood, which reduces blood loss and maintains a clear field of view for the surgeon. Electrical generators power the instruments.
Encision says the surgery techniques and the generators are fine.
The problem: There are no safety mechanisms to detect whether any tiny defects in the instruments are allowing stray energy to burn tissue beyond where the doctor intends. And since human tissue can conduct electricity, there's no way to ensure currents aren't unintentionally drawn from the instruments.
"The physician is playing Russian Roulette with (the instruments)," Odell says.
The potential burns, at a searing 1,200 degrees Fahrenheit, can lead to severe, life-threatening complications.
Encision's AEM Surgical Instruments contain shielding and extra insulation to help prevent the nicks and breaks that can allow electricity to escape.
In addition, a monitor attached to the generator tracks both the instruments' performance and instances where neighboring tissue begins to conduct. If either occurs, the monitor automatically shuts the generator down and sounds an alarm.
Odell likens Encision's products to the standard ground fault circuit interrupters used in home bathrooms and kitchens, which look and act like traditional electrical outlets, but shut down if a surge occurs.
"All we're trying to do is bring your hospital up to code with your home," he says.
Cresting wave
Hospitals and surgeons aren't required to use devices with installed safety mechanisms. But Odell believes that will change as the costs and risks become better known.
An August 2000 study released by the Physician Insurers Association of America showed more than $149 million in damages, plus another $40 million in costs, were paid nationwide dating back to 1991 for claims involving injuries from laparoscopic procedures.
In the past five years, the Association of Operating Room Nurses, along with other risk-management, surgical and engineering groups and publications, have made recommendations advocating the monitoring as an additional safety precaution.
Gerald Kirshenbaum, a general surgeon in Aurora who has used Encision's products for a decade, says that burn injuries rarely occur during laparoscopies, and that could be why more medical centers and surgeons haven't adopted the technology.
"It's a low percentage problem. But when it happens, it's a big problem," Kirshenbaum says. "And it's totally avoidable if you're willing to use this technology."
That kind of buzz will draw attention to Encision, Odell says.
"In our business, a lot of it is driven by word of mouth," he says.
Encision logged sales of $3.8 million between April and September. In that stretch, the company lost $347,351 from operations compared to income from operations of nearly $72,000 during the same stretch last year, when sales stood at $3.6 million.
Odell says the extra expenses stem mainly from the hiring of three direct sales representatives and several engineers to "get the sales and earnings slope back on line."
In June, the company also hired Jack Serino as its new president and CEO to replace James Bowman, who resigned those positions after four years but remains a shareholder. Serino has 15 years experience with medical devices. Serino estimates the overall U.S. market opportunity for the products at between $400 and $500 million, while the global market runs between $700 and $800 million.
"The wave is cresting," Odell says. "Our hope is, as the crest of the wave forms, that (our devices) will become a mandatory requirement."