I got the cue. We can start. All right, I get to officially launch J.P. Morgan. How is that? That's awesome. What a, Robbie, Robbie, thank you very much for having us, and what a privilege it is to be here on Monday morning and have everybody come join us. I'd love to see a show of hands if anybody remembers when we had the last meeting on Thursday, a few years ago, and who was in the room? See? And then we all participated. We swept the floor and shut the lights off and went home, so it's all good. Well, thank you all for joining us, and let's just get it going. We got the disclaimer. Everybody read that quick.
Put a little agenda together, 'cause we're gonna talk for 20-25 minutes, and then Robbie's gonna come up and ask more specific questions. But these are basically the topics we wanna get through, right? We wanna go through the year in review and talk about our revenue in the fourth quarter, which I'm sure you all saw this morning. We do have just a preliminary guidance to put out in our pipeline and the normal topics that y'all wanna talk about. Before we do that, though, the team back home put together a... I gotta make sure I don't stand too close to any mic. Put together a little video just to highlight what a great year we had in 2023, and we're so excited about it.
So we thought we would just take the opportunity and share it with y'all here.
Look what we've done to help 50,000 patients now. It's just the beginning. You get to talk to actual patients who had the Inspire, who can actually discuss their experiences. You see a difference in their face. That absolutely makes me feel like I'm making a difference in this person's life.
That's so cool. My buddy on that podium at that stock exchange is Jesse. He is the first kid to receive Inspire therapy. He's had Down syndrome. He used to have a tracheotomy for his whole life, and we were able to implant him when he was just 13, and then they were able to remove the trach. This happened to be on his birthday, and it was eight years after. This kid's 20-some years old now. He's a grown man, and he got to be up there to ring that bell, and just to see the look on his face is absolutely precious. But it's the definition of why we do what we do, and that really just kind of highlighted the year. Had a great fourth quarter and really happy about that.
Ended up with a range between $192.3 and $192.5 in revenue. That's the midpoint's gonna represent 40% growth, so very strong activity both in the U.S. and in Europe. I don't have the splits yet. Our earnings call will be coming up in just a few weeks when we'll have the splits. But what we do wanna talk about is, at Q3, we talked about the European revenue and the challenges we had with our EU MDR. Well, since we last spoke, we now have derogation approved in the Netherlands, in Belgium, and in Germany, so we are shipping products, so that's really the good news. We also are making very good progress with the derogation.
Expect to have that resolved quickly, but in the interim, we're able to take care of the majority of the, the patients, and that's really strong. So overall, it's a very good revenue year in the range of $624.6 million-$624.8 million. 53% growth in the midpoint over the prior year period. Very proud of the team at that. A, gross margin is gonna come in between 83%-85%, which is absolutely tremendous. We do wanna put out a little bit of a preliminary revenue guide. So you can see that we're setting up a revenue between $775 million and $785 million for 2024. It's gonna represent between a 24 and 20 percent, 26 percent growth over the current year.
So pretty excited about getting the year started. We continue to build a steady cadence of centers, and you'll see that, we're averaging about 70 new centers per quarter in the, in 2023. And now we're at the point of having 1,180 centers in the United States offering Inspire therapy. That number is gonna continue to grow, but also remember, our growth is really focused on same-store sales and really trying to drive the utilization, and that's what it's all about. Randy's in the audience back there. He runs our U.S. sales team, and, he right now has 287 territory managers, representing the therapy, which is absolutely tremendous. He's also building up our team of field clinical representatives that is so essential for case coverage, covering the cases, training sites on how to do their programming.
The key is the steady, steady cadence, and this goes back to the old slide we start, we show that says, "You can only grow as fast as you can protect patient outcomes." But you can see it's an accelerated growth to be able to keep us on our way. From a pipeline standpoint, for those who don't know, I always start on the right-hand side here. It's key to understand how Inspire works, and we have a sensing technology that can sense respiration. That's what you see as the black line there, right? Exhale going down and then inhale going up. So what we wanna do is we wanna track when a patient starts to inhale. That's when we provide stimulation to the hypoglossal nerve and hold the tongue forward as the patient breathes, thereby preventing obstructive sleep apneas.
You can see on the polysomnography how complex those things are. But really in the second half of that chart, when it really kind of shows the therapy on and the benefit the patient receives. Today, the Inspire procedure has three implants to the middle slide. Takes about 60-90 minutes to do this implants, two small incisions. 'Cause where we show the sensing lead on this one is now moved back to being placed right underneath the stimulation cuff or underneath the neurostimulator. As we move to the left, we are in the final process of documenting the Inspire 5.
It's going back to the FDA in the very near future for their final review, and when Inspire 5 comes out, we're looking at doing an early launch in 2024, but we wanna do the full launch in 2025, and that's what we're gearing up the team to do. That is gonna incorporate that sensing function inside the neurostimulator using an accelerometer that's gonna be on the circuit board. So we still need to have the closed loop stimulation, 'cause that's the key to having a very strong, effective therapy, but we can simplify it by making it inside the can, which of course, is better for the patient 'cause it's one less product in there.
I'm gonna show a chart on our on our revision rates, which are very low, but very important to talk about how the sensor is gonna improve reliability, putting it inside the can. It's less of a burden for the surgeon. It could reduce the OR time from 60-90 minutes down to 30 to 45 to 60 minutes. Right? Significant improvement. That can help drive capacity. And it's good for us that we don't have to make the pressure sensing lead anymore. We're down to just two implanted products, and Rick yells at me when I say that you get improvement in gross margin too, by having less COGS. SleepSync, we've been talking about this, the digital health platform, but wanna put a chart just to kind of show the benefits happening for everybody, right?
From a patient, the patient has their Inspire app. That's their interface with SleepSync, right? And they can find a doctor on there if they're in the early stages of Inspire. They can customize education. They can track their therapy and their sleep quality, 'cause they get reports back, too, on, on how well they're sleeping. On the other side to it is we have the clinician, who can now monitor how well the patients are doing. They can see trigger points if, if a patient needs a little bit of help in some areas. And what we're working on now is the ability to do remote patient management, and the next step after that is to do remote patient programming, so the physician's office to a patient's home. So a lot's gonna continue to happen in our digital health platform.
Three key areas for success, but I say three key areas, and then I show about a dozen bullets on the right-hand side. We're gonna continue to show, continue to grow patient flow. That's what it's all about. We know how to do that. That's our direct-to-consumer, program that we have. We've gotten much smarter with it. We've gotten refined, and you're gonna see refinements as we go into the new year on how we're gonna be able to improve that, get some, leverage off that, but also be able to really focus on our target market, and that's what it's really all about. Capacity is really key. Capacity is getting more surgeons to offer more of their time to do procedures and continue to train more surgeons within the existing practices, as well as train, new practices altogether.
So big effort to continue to grow capacity. The last bullet you see in that area is activate early career MDs. We have two programs to train fellows, both one with ENT, one with sleep physicians. We wanna catch them as they're graduating. For the ENTs, we have a year-long course that they take with Inspire. They all have experience with Inspire coming out, and we want them to, when they go out into the workforce, to be able to start or join an Inspire program. And then, of course, what drives us, and going back to Jesse, we're all about outcomes, right? Nothing can slow us down as long as we protect the outcomes that we've been able to demonstrate, and that's really the most important part of what... who we are.
All the technology advancements are meant to improve patient experience, are meant to improve outcomes, improve safety, and that's gonna just continue to be the focus going forward. I'll show you a couple charts on that. Customarily, we used to always show our new TV commercials at J.P. Morgan, and we're not doing that this year. I know nobody gets up and walks out. The key to it is, what we're doing is we're repackaging what we have. We have a lot of material that we can leverage, and so rather than going out and filming new, what we're doing is kind of combining the messaging, and you're gonna see some more very creative ways with the direct to consumer. I'm gonna show you one combined commercial that we ran.
Dad has sleep apnea, so he got Inspire. He won't shut up about it. Let's get started. Bill, where's your mask? I struggled with CPAP every night. If you struggle with CPAP, you should check out Inspire. Inspire? It's the Inspire implant. He's not struggling with CPAP anymore. She looks great. Because I'm not struggling with CPAP anymore. Works inside my body with the click of this remote. Dad! Just a button. Just a click of this button. ... No, no, not the fun button, the other button.
Sorry. It's making me think of doing other things I've been putting off. Like removing the tattoo of your first wife's name? $100, she got work done. Did she get implants? Yeah, I got an implant, Sheila. I sure won't miss hearing your snoring next door. More sleep for Bob. More sleep for Bob! Now I'm back. Give me this thing. No mask. No hose? Just me. To Inspire. Inspire. My man! Inspire, sleep apnea innovation. Learn more and view important safety information at inspiresleep.com.
Very fun. So the team's got a lot of material for which to be able to repackage and still get the message out there. It's really about still building the brand awareness, right? Our brand awareness scores have continually grown over the last several years, but we're not where we need to be yet, right? And you can't just walk down the street and ask somebody, "Tell me about Inspire," and they don't, they haven't heard of it. But our scores are coming up, so it is about building the brand, it's about bringing new patients to the funnel, and it's about also bringing awareness to the general practitioners. That's gonna be a key part of it, right? 'Cause a lot of patients will come to our website, they'll get...
Watch the videos, they'll be educated, but they won't do anything until they go talk to their family doctor. "So what do you think about Inspire?" So we need to make sure that they have the same level of education. Focus is, again, on strong patient outcomes, as you can see. We track both the ESS, Epworth Sleepiness Scale, on the right-hand side there. High is not so good. Anything less than 10 is normalized, and we consistently have our patients down at 6, and it stays there. That's great. The Apnea-Hypopnea Index, you can see, just continues to fall. This is all from our ADHERE Registry that is 5,000 patients. We finished that study at 5,000. Now it's rolling in to be part of SleepSync.
And the key to it that we knew that, we have a very important therapy now is, when we ask patients six months after they've had Inspire, and we say, "What do you think?" And 90% say they'll do it all over again. That's when we know this is, this is, on the right pathway. So very exciting. This is my favorite slide. We have survivability on the, on the, for revisions on the left and for explants on the right. Now, they're two different scales here, but if you go back to 2018, when we did our first IPO, you can see we were running at, What's that rate? 92% of the patients did not have a revision, for the first, what we're tracking, five years there.
You can see a continuous improvement all the way up to now, right here in 2022, we're talking 1% revision rates. The great majority of those revisions are because of the pressure sensing lead. If we can get rid of that sensing lead, we just get another stepwise improvement in reliability. So it's the desire to get revision rates to zero, and I know that's the law of diminishing returns, but that's what satisfaction is. So we continue to improve year over year. Look at the explant rates. In the beginning of 2019, or I'm sorry, in 2018, you're talking 4% explant rates. Half of those were patient-selected, right? Half were because of infection or a different reason. We now have that down to less than 0.5%.
So very, very dramatic improvements in safety, and that just shows the commitment of the, of the team. Okay, mechanism of action is very important. We've got two slides here. It's come up with GLP-1s all the time, but it's how we've lived since the beginning of, of, Inspire therapy. On the left-hand side, you can see it's the tongue falling back into the airway. It's called a tongue-based obstruction. The majority of patients with obstructive sleep apnea are tongue-based obstructions. As you start to gain weight and you get a larger neck circumference, that creates a lateral wall collapse that you see on the right. You see those side walls creeping in? Now, we stimulate the hypoglossal nerve that moves the base of the tongue forward, right? We do not address the lateral wall, right? We will get a benefit on complete concentric collapse.
You can see on that third bullet or second bullet down there, if we stimulate patients with complete concentric collapse, they'll do fine, but it's gonna be 15% less performance than tongue-based alone. That's really kind of significant. Our average group is about a BMI up to about 40, and, I'm sorry, BMI typically is about 28, 29, with the AHI, apnea-hypopnea index at about 30. The SURMOUNT trial that everybody's waiting for that to come out, they have an AHI of up at all 50, and they have a BMI, approaching 40. Completely different patient group. We need those patients to lose some weight, to relax the lateral walls, to be able to qualify for Inspire.
So we still say we're gonna wait till the data comes out, but it's gonna be a net positive for Inspire, and we hope those patients are able to get to a point where they can benefit. One of the key things, and this kind of ties back into the GLP-1, but one of the key challenges that we've had is the steps for patients to receive therapy takes a lot of time. We need to continue to reduce that. One area we're going after is drug-induced sleep endoscopy, right? It's an effective procedure, but it's something that the patient has to go in and have propofol and have a doctor take a look at their airway. Jordan Weiner is a doctor in Arizona that started a program called Predictor.
He can take a regular caliper that you see right there, and he can measure the width of the airway, awake in a supine position. SPW, supine pharyngeal width. That's the word that you're gonna hear.... He did a study of 100 patients. We came back, and we did a study of 300 patients, and then we saw that data, and we did another 300 patients to be able to validate that data. And we're down to just a handful of patients left. So the team's done just a great job enrolling that study. We'll be able to see a lot of that data early in 2024. In fact, a lot of insurance companies have already incorporated the data from 300. What's key to it? And this kind of ties back to the GLP-1s a little bit.
We know from that study, each unit increase in BMI... Now, you gotta think about how this is worded, but it's a 14% decrease in the absence of lateral wall collapse, LWC, lateral wall collapse, right? And each unit increase in BMI is a 13% decrease in the odds of CCC. Okay, what does that mean? We need these patients, and that's from our trial, who are hanging with a BMI of 40. Every step down in BMI is gonna have a dramatic reduction in the lateral wall collapse. We don't, we don't believe it's gonna have a significant impact on the tongue-based collapse, and therefore, we believe that those patients are gonna come back into the, Inspire population, which is fantastic.
There was a small study out of Ireland that came out that looked at GLP-1s and showed minimal AHI reduction because of the drug alone, showed a great benefit using CPAP. That just published. We're just kind of looking forward. We know the data's coming out. We wanna be prepared for that, and we wanna be able to help those patients as best as we can. Policy reviews. Inspire indications. We had several improvements over 2023, including increasing our apnea-hypopnea index to 100, increasing BMI up to 40, and of course, Jesse and the pediatric population with Down syndrome. And then also coming back and now starting to address alternative ways to address the airway anatomy, specifically if we can remove drug-induced sleep endoscopy, right?
We already have Aetna and Humana, are two examples that have already incorporated all of the changes, including removal of the DISE. That's wonderful. You all saw UnitedHealthcare came out with a proposed policy last year or last week. That isn't really a big change. We've been working with United for the longest time. They've always been hovering with the use of mandibular devices, which are usually for mild to slightly moderate patients, not high, moderate to severe, where we spend our time. So it's really not gonna have a big impact on us. The key to it, we've already trained a lot of the physicians to be able to document the anatomy of a patient and show that they're not appropriate for a mandibular device.
So we'll continue to track that, but we don't think it's really gonna have any kind of significant impact because we've been dealing with this, United, for years, on and off. Give you one more on this one. We deal with this in Germany as well, and we have for the last several years. So that's really not a big surprise. Every single insurance company has their own little specific area that we deal with. And our prior authorization team, it's their job to know each one of them. They have a big spreadsheet that tracks every insurance company and what information they need for each prior authorization, and that's their job. They're good at it. They know how to handle things like this, so we're not too worried about the whole United.
The good news is United increased the AHI to 100. They increased the BMI to 40, and they actually relaxed the documentation for CPAP intolerance. So all in all, it was really. It's a strong policy from United. We're happy with it. It includes a lot of the new indications, and, and we can handle the mandibular devices. Okay, last slide, Robbie. Growth strategies. Just kind of wanna walk through these just a little bit. Number one, as we already talked about, it's about ensuring strong and consistent patient outcomes, and that's how we train, the rate at which we open centers, and making sure that every patient is taken care of. We've got to improve the customer experience, right? The digital technology is gonna certainly do that. We have a new website.
We have tools to help patients be able to make an appointment. We talked about our last pilot study with electronic scheduling. That continues to expand, and because it is showing an effective way to help patients get an appointment with a healthcare provider and streamline that process. We'll continue to work with technology. Inspire 5 is gonna have a dramatic improvement. So it's all about improving the customer experience, both physician and patient. Widespread consumer awareness. We're gonna continue our DTC program. We've got to continue to build the brand, continue to bring patients to the website, continue to get them in front of a healthcare provider. We're gonna continue to scale our commercial operations.
We're gonna continue to scale the number of centers offering Inspire, but we're gonna do it in a very consistent manner, as we have since getting approval in 2014. It's always been very consistent cadence all the way through. And then we're making heavy investments in research and development, right? Inspire 5 and digital are just two examples of it, but we have a host of other platforms that we're working on as well. And then finally, we are working to facilitate our international expansion, right? We already talked about being close to locking in EU MDR, but in the meantime, we got derogation in Netherlands, Belgium, and Germany. We've had a good year in Japan. We actually completed the transition from a distributor to a direct sales force in Japan. Singapore had a great year.
Hong Kong is back doing cases, and we're looking at other opportunities as well. So pretty exciting. We like where we stand right now. We had a great 2023, and we're really looking forward to a strong 2024. Thank you very much.
... Great. I wanna say thank you, first for kicking off the 2024 J.P. Morgan Healthcare Conference.
What an honor!
Great way to start, great quarter. And maybe we could start there with questions. You reported a range of $192.3 million-$192.5 million. That's up 40% year-over-year. You know, $15 million plus or minus above where consensus was, so an 8% beat. Added 13 new territories, 78 new centers. You know, let's start with the quarter and exactly what happened, 'cause I think a lot of people remember back to the third quarter, and you talked about an issue with new prior authorizations in a pilot program. Maybe you can walk us through exactly what that was, what you did to resolve it in fourth quarter, and what actually transpired. Obviously, the sales were great, so I imagine there was a fix.
Yeah, our prior authorization program is working great. It was working great before. We did drive some independence, and that we realized was gonna be a challenge in the third quarter. That's when we brought everything back in-house. That's going back to our earnings call, back from Q3, when we realized we had a little bit of a challenge there. We're able to take care of that, and had a great flow from a prior authorization standpoint. And it. Again, it's not policies that we have a challenge with. That was some of the concerns that people had back then. The policies are strong, even as we just kinda talked through with UnitedHealthcare. The insurance companies are supportive. We had logistics problems being able to get the prior authorizations into the insurance companies, and that's really been resolved, and that program's working really well.
Obviously, it shows with the response in the quarter.
I remember part of it, you implemented. There's a third party that's doing-
Mm-hmm.
sort of the easier, you know, few-day approvals.
Yeah.
Inspire Corporate is handling the more complicated ones. Maybe you could just talk to how the implementation of the third party is helping, so far?
Yeah, it's still in the early stages. They are operational, and all the cases will come in to Inspire. They will get logged into our system, and then they can be routed to the third party. So they are an overflow for our internal team. They are doing cases right now. We're still training that group up, but they're able to handle some of the overflow. But the key is the internal prior auth team just really stepped up, too, and they really knew that the burden was gonna be on them for the quarter, and they really managed it. But now the third party is gonna really kinda help them as we move into 2024 and beyond.
Do we think of some of the fourth quarter sales as catch-up from third quarter, or is this now a normal run rate?
Well, I think there's a little bit of catch-up 'cause we talked about not having enough capacity in the third quarter.
Mm-hmm.
But as you know, we had our challenges in Europe. So there's always a little bit of a balance of where patients land, if we can get the cases done in the existing quarter, or if they do fall into the first quarter of next year. So there's a balance of both, both in the United States and in Europe on that.
Buried closer to the bottom of the release this morning, you also not only had a great top line, but you were profitable in the fourth quarter. Maybe you could just speak to some of the dynamics down the P&L, and we'll get to 2024 guidance also. But how we think about, you know, a break-even timeline for Inspire?
Sure. Excuse me. Thanks, Robbie. So yeah, we were very pleased with our performance in the fourth quarter. And that growth and performance was really driven by higher utilization at the center level. In the third quarter, that utilization was 1.8 procedures per month per center, and that was up to about two in the fourth quarter. So, when we have higher utilization and continue to expand on revenue and increase revenue, that's where we're seeing a leverage. And so we have demonstrated leverage on a quarterly basis throughout 2023, and as a result of the increased utilization, up to about two in the fourth quarter, we saw even more leverage. And that's what we reported that...
We're not completely done with our closing of the books, but we're gonna have a profitable fourth quarter, and we're very proud of that.
Are you willing to say, you know, when Inspire may tick sustainably, net income or GAAP net income profitable?
Well, we're just under a month away from our earnings call, so we will give a little bit more clarity as to our spending levels and our improvement of our leverage and our margins. But it's still early, and we'll talk about that in less than a month, I guess.
I wanna shift to 2024 guidance, and I was a little surprised to see it. We haven't historically seen you provide guidance. It's a little earlier than we normally. It's usually a month or two-
Mm-hmm
... later from now. So I imagine there's probably a—you know, still a good guide, but a little bit of conservatism. It's above where the street is, $775 million-$778 million, 24%-26% year-over-year growth. Just for reference, the street was sitting at $773 million. So good guide, moving, numbers moving higher, most likely after today. You know, same sort of question, what's assumed there? And, you know, it is earlier than normal, so how much conservatism is layered in there?
Right. Well, we wanted to show confidence, and I think that was kind of the key. I think that, as we mentioned with the six growth platforms that we have, we're gonna be able to drive leverage. And most of that growth is gonna be same-store sales, but we will see additional centers being added. We wanna grow the capacity, new sales, and also, we expect a good year out of international as well. So we had good confidence going in. We think that patient flow continues to improve. The new website, our ability to connect patients with healthcare providers, and being able to reduce the time from website to implant is still too long. We think that we can continue to reduce that.
So that gave us confidence, and we wanted to put some guide out, just to show confidence, and that's why we put it out today.
One of the things I wanna try and do, hopefully this week, is get people's models set appropriately for 2024 cadence, 'cause this is, let's call it, for the most part, a normal year.
Mm-hmm.
2023-2024 is a fairly normal year, and a lot of people haven't seen normal seasonality in four or five years. So models are a little funky, potentially. Any way to think about, in a normal year, how much of a sequential downshift there is from fourth quarter to first quarter? And also realizing last year you had extra sales in first quarter as catch-up and maybe a little extra here in fourth quarter.
Yeah. So, we do have seasonality in our business. You've seen that. We showed the quarterly chart earlier. Because the majority of our business is commercial driven by commercial payers, and the high deductibles reset at the beginning of the year, we see an increase in the fourth quarter, and then we've had seasonality that's ranged high single digits to almost double digits, sequential decrease in the first quarter. We did have a benefit last year of our silicone leads. That was about 400 basis points in the first quarter. So we might have a little bit more seasonality in the first quarter of this year, but it's still early to say. We'll talk about that a bit more at our earnings call.
If we look to, let's say, you know, it's still early in your launch ramp, but 2018, 2019, something like that, are those inappropriate comparisons to look at?
It's kinda tough because we're growing so quickly.
Yeah.
You know, our compound average growth rate has been about 68% over the last several years, and so because we're growing so quickly, it's kinda. And we continue to grow quickly. The denominator is getting larger, but it's still difficult to determine exactly what our kinda normal seasonality might be, just given the fact that we're growing so quickly.
Maybe if I think about one of the key updates for this year is the launch of Inspire 5, and I think the window is somewhere from spring to summer-
Mm
... + or -. How do we think about the potential, you know, one, time to benefit your sales, and two, you know, how much of an uplift? Is it a continuation, or is it really more of a hockey stick-
Hmm, gotcha
... type of launch?
Well, first off, let's just talk about Inspire 5 and what it's gonna do from an outcome standpoint, and being able to sense the respiration with an accelerometer is, we believe, gonna have an improved sensing signal, which is gonna help improve our synchronization, which is gonna improve patient outcomes. So there's gonna be some benefit there for the patient. It's gonna have reduced OR time, as well as it's gonna have certainly a reduced operational burden on the company itself. I think when we are able to launch that, it's gonna be a desirable product to have.
Number one, to not have the sensing lead anymore is predominantly the number one reason, and I think if you kinda look back to the transition from three-incision to two-incision, when we did that a couple of years ago, how quickly that went. I think this will be a pretty quick changeover as well. First in the U.S., and then we've got to go through the EU MDR in Europe. So we believe it'll be a quick turnover, and once we transition to Inspire 5, then we're gonna be able to see the benefit of reduced OR time, simplicity of surgery. The other aspect that we can't forget is, remember, we have ENTs, ear, nose, and throat doctors, right?
Putting a sensor between the intercostal muscles near the pleural space, if there's any part of the surgery that's not natural, that's kinda it. So by removing that sensor and not having to place a neurostimulator in a pocket, that's gonna give additional confidence to ENTs. So I think you're gonna see more ENTs wanting to do the procedure as well. Takes less time, reimbursement's steady, easier procedure to do, don't have to deal with the sensor. If you ask doctors today, "Are you worried about the sensor?" And they're all gonna say, "Oh, no, I can handle it. It's all fine." But, you know, deep down, there's just that little bit of a... That's the tricky part of the procedure. So I think not only we're gonna have a quick transition to 5, but then the result after that is gonna be an acceleration.
You're gonna see more surgeons wanna do the procedure. They can do more procedures in a day, and we'll just continue with the ramp. It's gonna be a key element to improving capacity.
I want to pick up on that last point. You can do more procedures in a day. Obviously, you're removing a component of the surgery. So how much time savings is there to when you move to Inspire 5, and how much does that go to help unlock one of the key bottlenecks?
Yeah, I think today our average is anywhere from 60-90 minutes for a procedure with Inspire 4. If we can bring that down to 45-60 minutes on average, that's a significant savings. If you can save as much as 30 minutes on a procedure, and so you can do a case, clean the room, do a case, clean the room, do a case, clean the room, you can add a fourth case in a day, or you can add it into their existing operating schedule. So it just makes it more flexible for the ENT to be able to add additional procedures.
Would you agree that ENT availability is the number one bottleneck, and what can Inspire do to continue to unbottle it?
I think that is our number one constraint, is the amount of time ENTs spend in the operating room doing procedures.
Mm-hmm.
So number one, well, we do time studies with them. We need to know, what do you—how do you spend your day? We don't need them to do the device programming. We have sleep physicians to do longitudinal management of the patients. We need the ENTs to be in the operating room doing the procedures. If we can remove sleep endoscopy from the majority of patients with the Predictor, that's one less procedure they have to do. How ironic is it that this past year, January first, we saw a significant increase in the reimbursement for sleep endoscopy? But that's for the hospital. That doesn't affect physician payment, right? That's important to note. And so the physician not having to do that reduces one more burden.
Having a sleep physician partner to be able to manage the patients allows them to spend more time doing procedures, reducing the procedure time, such as with Inspire 5, right? Working with the ENTs to show them the demand that we have from our website of the patients wanting to get an appointment, wanting to have Inspire, and that they have to train their partners. Can't have one ENT at a practice. Should have two, three, four ENTs in a practice doing Inspire. And then when we go to open up new centers, you wanna open up new centers with two physicians, right? Why open with just one? Always having a backup. So there's numerous fronts that we're going after to build efficiencies into the program.
Just wanna scan the room. Any questions? All right, we got about two minutes left. I wanna end... You talked about there was UnitedHealthcare updated policy-
Yep.
In your presentation, that moved shares last week. I actually took it more as a positive-
Mm-hmm.
-where you had expanding the AHI, the BMI. You know, we talked, you talked about in the presentation how some of the oral appliances doesn't really apply to your patient population, and a lot of them already try that,
Mm
before CPAP anyways. So maybe I could just ask you, how do you think the expanded AHI and BMI will impact your overall addressable market, and does that really open up a new patient population?
I think the AHI, yes. The BMI, we're gonna be careful about. Again, from what we talked about-
Mm
With the lateral wall collapse, and the patients with a higher BMI have a higher probability of having complete concentric collapse, so they won't have the same... They won't benefit from the same level of outcomes. High AHI is a significant impact. Now, granted, we're talking AHI from 65 up to 100, and so there's a reduced population there. But right now, we would have to work through the appeal process with the insurance companies to be able to get them approved. So to see companies like Humana and Aetna, now United, to be able to just open up their policy to go to 100 is just tremendous, and it really makes it easier for those patients to stream straight through rather than having to go through that three-month appeal process. And so that's gonna really have an impact.
And then the other unspoken one is the pediatric, is really giving them access to therapy, and that's really starting to grow, too, so that's pretty exciting.
With the last few seconds, there was an update also on UnitedHealthcare about CPAP and tolerating it or failing it.
Yeah.
Do you expect any change whatsoever from that?
No, I think that's been the same. I think CPAP non-compliance has been around for years, as everybody is so, well aware of. And so I think what's key to it is just making sure the physicians know how to document that, and by United coming out with that policy change, just provided a little bit more guidance on the documentation that they need, that we've already been providing them. But I do think that it's just kind of clarifies that. People expect CPAP patients are gonna be non-compliant.
Yeah. Great. Well, thanks a lot. Great quarter.
Very good.
Appreciate it.
Thank you, everybody.