Ladies and gentlemen, the program is about to begin. Reminder that you can submit questions at any time via the Ask Questions tab on the webcast page. At this time, it is my pleasure to turn the program over to your host, Travis Steed. Please go ahead.
Hey, good afternoon, everybody. Thanks for joining us. It's our third annual Home Healthcare Conference, and we're glad to have Outset Medical. Leslie Trigg, CEO, is going to open up, and then we've got the full team here to talk. So looking forward to having you, and Leslie, I'll turn it over to you.
Great. Thanks, Travis, and thanks so much to everybody who's joining us today. I wanted to maybe set the table a little bit for those who may not be as familiar with Outset. We are a med tech company headquartered in California, and we are focused on reducing the cost and complexity of dialysis by transforming where and how and who can deliver dialysis anywhere from the hospital to the home, which is why we're a part of this conference here today. As some of you may know, dialysis is a life-sustaining therapy. It is not optional. It is not elective. Today in the U.S. alone, over 85 million dialysis treatments a year are delivered, and the vast majority of those treatments take place in outpatient dialysis clinics three times per week, 52 weeks per year.
Now, there are two types of home dialysis outside the outpatient clinic setting: home hemodialysis, which is performed through the circulatory system, and home peritoneal dialysis, which is performed through the abdomen. In 2005, the first hemodialysis system designed for home was cleared by the FDA. There wasn't much innovation over the next 15 years, such that when our Outset's device, called Tablo, achieved FDA clearance for home in 2020, it was just the second home hemo device of its kind to receive US FDA clearance. When we were designing Tablo for the home, we really had the benefit of first-mover advantage, so to speak. We were able to really carefully study what patients and providers liked and didn't like about the incumbent system on the market.
As a result of this research, we focused on addressing kind of the three biggest pain points we heard over and over again as items that were stopping patients from adopting home dialysis in greater numbers or stopping patients from staying on home dialysis. So our two top goals from the beginning were really to open up the envelope and make home dialysis more technologically accessible to a much, much greater percentage of the population and to increase the duration of home dialysis. We really wanted to materially increase retention, because once somebody's finally at home, of course, the goal is to allow them to be at home, dialyzing for as long as they'd like. So from a design perspective, we thought about three things for the technology.
We designed Tablo so that it could be used 3 times a week in the home, just like in the clinic, compared to the incumbent device, which required patients to dialyze 5 or 6 times a week. So that was our first design intent, which we met. Second, we designed Tablo to purify tap water on demand into dialysis-ready water in real time and to make the dialysis solution custom to the patient's prescription also in real time and on demand. That removed the need for patients to spend anywhere from 25-30 hours a week making these big tubs of dialysis solution in advance of their treatment, so we felt that was a really big improvement.
And third, we just automated a lot of it with modern sensors and modern software to accelerate somebody's ability to learn the device and also to make home dialysis accessible again to a much broader percentage of the population, simply by simplifying it. So in terms of market size, our $9 billion US TAM projection assumes only about 30% of the roughly 600,000 US patients on dialysis today ever go home. And what we know from our real-world experience now today is that 30% is a very conservative estimate. And further, there are new tailwinds that are encouraging more care in the home and particularly more home dialysis. Specifically, dialysis patients are now eligible for Medicare Advantage, for example, which has been a big tailwind.
CMS put new financial incentives in place to encourage providers to send more patients home. And I'd say even more recently, staffing shortages in dialysis clinics themselves have served as a tailwind of sorts, in that patients who are dialyzing at home are independent and don't require professional staff. So in this way, home dialysis is really a triple-aim solution. It improves the quality of care for patients, it enables providers to serve more patients with less staff, and it lowers the cost pretty materially for payers. So with that introduction, I'm gonna turn it over to Outset's Chief Medical Officer, Dr. Michael Aragon, a nephrologist who was in practice for many, many years and managed dozens, if not hundreds of patients in the home, both on home hemo and also on home peritoneal dialysis.
Michael, I will turn it over to you.
Yeah. Thank you, Leslie. Thank you, everybody, for joining. I'd like to introduce. We have two very important guests here that I think will provide a lot of perspective on home hemodialysis in general, its prospective growth, but then in addition, their own personal experience. First, we're joined, very fortunate to be joined by Mr. Emilio Hughes, a photographer from New York City. Mr. Hughes has been on dialysis now for 15 years. Mr. Hughes is currently on home hemodialysis with Tablo but also has a very interesting history, which we'll talk a little bit more with him in just a few minutes, where he's been in in-center dialysis.
He's also experienced home hemodialysis with the incumbent device and therefore provides a perspective on not only the in-center experience, but also some of the differences between the Tablo technology and the incumbent system. So, Mr. Hughes, thank you so much for joining us today. And then I'd also like to introduce Dr. Frank Liu. Dr. Liu is currently the director of home hemodialysis at the Rogosin Institute. He is also an instructor of internal medicine at Weill Cornell University and a practicing physician at NewYork-Presbyterian Hospital. Dr. Liu has built a very successful home program through the Rogosin Institute. A lot of years of experience of putting patients at home and going with patients through the journey of end-stage kidney disease.
He's also been a very strong advocate and involved in policy to try to facilitate growing home dialysis more broadly throughout the United States. So Frank, thank you for joining us today. I'd like to start, Frank, with you if I could. Just a quick question. We talked about several different modalities here in dialysis. Could you maybe share a little bit about what you see as the benefits of in-home dialysis compared to in-center dialysis in terms of clinically for your patients, quality of life, maybe what you see differently in the, maybe emotional or physical well-being of those patients versus those that dialyze in-center?
Sure, and thanks, everybody, for having me here. Mr. Hughes, I'm sure can tell you himself, being on dialysis is not an easy thing for anybody, even under the best of circumstances. I'm not sure what the audience has in terms of experience with dialysis patients. But, you know, the majority of patients in the United States and around the world do in-center dialysis, like Leslie was saying, where they have to go to a center three times a week. That means they have to t hey have a schedule that they have to stick with, and doesn't matter what else is going on in their life during that period of time, they gotta drop it and get on transportation. Sometimes, you know, shared transportation with a lot of other patients who might be sick also.
Go to the dialysis center, wait for their chair to be open. And then maybe the person before them was a little late, so then they have to be late going on. And then they're doing these treatments, and then afterward, they have to make their way home, you know, often in, you know, sometimes late at night or early in the morning, that kind of thing. And so, the trouble with these treatments is that they are necessarily hard on patients because, you know, there's a lot to be done in a relatively short amount of time when you do it in a center. And these treatments are known to be very difficult on patients, from a physical and a mental perspective.
Even within a single treatment, you can see stunning of the heart, you can see cognitive declines from the beginning of a treatment to the end of a treatment. It really is very difficult on people. Even aside from just these medical issues, you know, there are a lot of restrictions that they have to have. So they have they may have to take up to, I mean, I think the average dialysis patient takes about 19 pills per day, so that their blood tests stay in the same place. So, you know, you, you asked me how, you know, doing it in home is better.
Well, first of all, you take away a lot of the traveling and the scheduling so that you can have dialysis that's built around your life as opposed to building your life around dialysis. In addition, you know, most home programs make a big effort to do treatment more gently, more slowly for the patients so that the treatments are more gradual. And so what that allows is for them to feel better at the end of the treatment. The improvement in schedule really makes scheduling their life and other things around their treatments a lot easier. So for instance, patients may, I think something like 40% or 50% of in-center patients may be working at the time of start of dialysis.
In most studies that have looked at this, say if you look a year out, it's less than 10%. Some of them may be too ill, but in general, it's just very hard to do. I think, you know, about half of our patients at any given time are still working. So that gives you an idea of sort of quality of life, ability to do things outside your medical treatment, are much better done at home.
Thank you, Frank. Just a quick follow-up here. So you have patients that are doing both types of treatments. How are patients informed about their options? How are patients either deciding or being directed, right, versus in-center versus home? Is there any special support that these patients need if their decision is to go home?
Well, I mean, I think in an ideal setting, a patient has a kidney doctor or some sort of a care team around them before they need to start dialysis. In an ideal setting, you know, maybe at least, say, six months before they need to start dialysis, you start teaching so things are not, I would say, so urgent. So that they can process information in their own time as opposed to in sort of an emergency. And so I think if there is a care team around them, I think that care team can present different options and allow patients to really make decisions in an unhurried way.
I think unfortunately, a lot of patients sort of crash land into dialysis, like they sort of don't know about it, or their care team doesn't really talk about it, and suddenly they end up in the hospital. And in that setting, a lot of them just end up, in a default sense, going to in-center because that's sort of how the system was designed however many years ago.... And so there are a lot of efforts around so-called transitional start, where people right up front get a lot of, education about different modalities and get them listed for transplant and all these things. In terms of the, special support, I mean, I think what patients really need, and Mr. Hughes, I'd love to hear his perspective on it.
I think a lot of them, they just need time, and they need support, and they need somebody to have, you know, the, the willingness to sit with them and answer the questions that they have and listen to the fears that they have. It's a scary thing, you know, being on dialysis. I, you know, unfortunately, put people on all the time, and it is a life-changing event. But on the flip side, when you get them to go home, you know, everyone is proud to say that they're a home dialysis patient. Nobody hides that. And, you know, it really is sometimes it can be, and not every center is like this, but it can be sort of a dehumanizing experience to be hooked up to a machine and to come in and out of a dialysis unit.
And so for patients like Mr. Hughes, who really take control of their lives and their treatments, it's a huge accomplishment. And so you just need to, I mean, we just need to get past the fear and, you know, anxiety that comes with, you know, any serious medical diagnosis.
Thanks, Frank. And then one last, and I'd love to hear from Mr. Hughes. You know, we talked a little bit about the patient's benefits, both clinically and maybe emotionally, physically, their ability to maintain employment. In the current environment we're in, right, we've got staffing challenges, we've got, you know, workforce challenges, costs. How do you see the growth of home hemodialysis impacting some of those things, right? Or trying to grow home in that environment? How would you kinda categorize or look at home hemodialysis in that lens?
Well, you know, dialysis staffing is a huge problem across the entire country. I can tell you from our program, we actually don't really have a problem filling our home dialysis nurse spots. And that's because it is qualitatively a different job than working in a dialysis unit. You know, I think our nurses are... Yes, they're technically trained as dialysis nurses, but it's a different experience, right? They're as coaches and sisters and mothers and brothers and therapists and, you know, they're there really to support the patient as opposed to, you know, just getting through a treatment. And so I think from that perspective, you know, I'm hoping that home dialysis is a good landing spot in terms of the staffing challenges.
But in terms of, you know, sort of the macro picture, I think like Leslie said before, you know, we have a bunch of virtual dialysis units out there, basically, right? Where our staff are people we've trained to do it themselves, right? And so, having to train them is a lot of work upfront, but after that, we are there really just to support them. And so, our hope is that once they're out there, they're pretty much self-sufficient. And so the staffing requirements are... They're not, you know, they're not none. We still have to support, you know, a certain amount of patients. But, but it's a, it's a different kind of pressure.
Yeah. Thank you, Frank. And I think with that background in mind, Mr. Hughes, I would love to hear a little bit about your motivation. You were a patient that was dialyzing in a dialysis clinic. Maybe could you talk a little bit about that? And what kind of drove you or motivated you to make that decision to dialyze at home? What did you like or dislike about that in-center environment that kind of, you know, helped motivate you to do your self-care at home?
Well, first of all, thanks for having me here with you guys today. You know, I did very good in-center, but in-center treatment just took so much time away from my life. You know, I was operating on a 4-day a week as opposed to a 7-day a week, because the 3 days that I had to go to center for dialysis, it pretty much shut down my entire day. In between traveling to the center, the 4 hours treatment, and then the washout after the treatment, and having to travel back home, by the time I got home, all I could do was just have a little lunch and go to bed and wait for the next day to start my life again. What dialyzing at home has done for me is it has freed up a lot of that time.
I can pretty much set my own schedule, and then, you know, I'm home, so I can come down in my jammies. I don't have to put my teeth in, I don't have to do my hair, I don't have to put my eyelashes on. I don't have to do none of that stuff that I had to do to go to the center.
Mm-hmm.
The other great advantage of dialyzing at home is that it has allowed me, with time and experience, to learn about dialysis in a way that I'm able to personalize my treatment. I don't have to go by a lot of the center's protocols and rules and regulations, because the treatment, after being at home for a while, with your labs and everything, your treatment becomes a little more personalized, as opposed to in the center, where the treatment is just generalized.
Mm-hmm.
Everybody gets the same thing, the same process, the same way. Unless there's a problem, then we deal with the problems as they come. But protocols and just rules and regulations that are in center to control the masses of people that are dialyzing at the same time, you can't personalize it. It's impossible 'cause there's too many people. You don't have enough staff to pay that personal attention, so it's a more general type treatment, you know? I was doing good in center, okay, but, hey, I'm doing better at home. And I would not have known that I could do better had I not been home.
No, thank you. Thank you, Mr. Hughes. I understand you've been on two different technologies at home. Could you maybe compare a little bit, you know, the prior technology to Tablo? And I understand you were on the other technology, went back in center for a period of time
Right
and then now home again with Tablo. So maybe share a little bit about maybe the differences in between the two technologies.
Yes. As you referred to it, the other technology, it involved me having to dialyze six days a week, three and a half, four hours a day. That defeated the purpose of coming home to dialyze. In-center, I was dialyzing three days a week. With the other technology, I'm at home, but I'm dialyzing six days a week. So it was good, but it wasn't great, you know? The other technology, I was able to load it in my truck, load some supplies in my truck, head out anywhere, hook it up anywhere and dialyze. But I was still dialyzing six days a week. So like I said, it was good, but after about, I don't know, maybe we did it nine months, 10 months or so, with great labs and, you know.
But six days a week and, hey, you know, my wife, she thinks she's a teenager, but she's no spring chicken. I'm 76 years old. Like, it's a lot of work, man, you know? And for six days a week, I could sense my wife burning out and getting tired. So out of love for her, and having been a little tired with the six days a week, I said, "You know what, babe? Forget this stuff. I'm going back to clinic." So I gave it up, and I reluctantly went back to the clinic under the system for which I left the clinic. But then years later, I don't know, a little bird or somebody whispered in my ear something about Tablo. And I said, "Well, what's that?" He said, "Oh, it's a new home machine." And internet, you know, I went to looking, and there it was.
And I said, "Well, hell, I tried the other guy. Maybe this guy is worth giving a shot." And I talked to my wife. My wife said, "Well, yeah, let's give it a shot." And it was a little technical, a little complicated for us to get connected with it, but the minute I got connected with it, I knew that this was revolutionary. That's the only word I can use to describe it. It was revolutionary. They guaranteed me that I could do three days a week. And after the first treatment I had on it, the post-dialysis washout wasn't really that bad. Wasn't really that bad. And I was able to get on it, get trained, get home, and my wife and I, we started on it, and the ease of using the machine was amazing. It was radical. How can I say?
It was fun! Where has fun and dialysis ever, you know, come out... And it still is fun. You know, there, there's some challenges, but they're fun challenges. I think my best description is that the other guys were kinda like analog, and Tablo is definitely in the digital world. The treatment is very interactive. The instructions are very simple. Everything is video relayed to you. And it's a dream come true for somebody like me. And I have been doing. For the year that I have been on Tablo, I have been doing better than I ever have been since I've been on dialysis.
I'm looking forward to even more better things as a result of being at home and able to personalize my treatment, and I'm able to talk to my doctor and my nurses about different, you know, ideas and different things that we might be able to do and try to. It's just revolutionary. You know?
Thank you, Mr. Hughes.
It's dialysis at home as dialysis at home has never been. That's my take.
Thank you, Mr. Hughes. I really appreciate that. Frank, one question for you then. You've used a lot of different technologies at home, different modalities, different technologies. One, I would say, is it common to see your in-center patients versus your home patients talk to you about what you can fine-tune in your prescription? Is that pretty common in the in-center world versus your home hemodialysis patient world? And then two, could you maybe, you know, Mr. Hughes shared some, you know, some comparisons of Tablo with other home hemodialysis technology. Maybe share, you know, a thought or two of how you see that, those two technologies.
Well, to your first point, I think, you know, our patients really do learn to become expert and are active participants in their care as opposed to, a nd not just participants, they are the giver of care. And so they know all the little things, right? And I think that activation level is one of the reasons, you know, one of the major reasons why patients at home really do do better than patients who are in-center, you know, sort of certainly on a statistical level. In terms of how Tablo, you know, compares to the other technologies out there, I have a fair amount of experience with pretty much all the devices that are out there. I would say that I am all about the home dialysis mission, okay?
And so, anything that gets a patient home, I'm happy with, okay? And so previous technology has done a lot, for that mission. What I would say, though, is that, you know, the main, the main competitor was, was engineered over 20 years ago, right? 20 years in user interface is a really long time, right? That was, right, BlackBerry ruled the world, or maybe not even, maybe it was even before BlackBerry. It was pre-iPhone. And so, what I could say how, how that pertains to dialysis is most patients, and again, Mr. Hughes, I, would love to hear your take on this. Most patients are afraid that they can't do it, right? Or at least worried that they, they can't do it, even if they're not actually having fear.
But what I would say is you see a touchscreen tablet that has on-screen animations pointing you to step A, B, and C, giving you visual and auditory, you know, feedback in terms of if you're doing it right or you're doing it wrong. I think, you know, we are obviously a phone, tablet world now, right? And I think people open up that, that screen, and they feel at home. And I think that makes a big difference. You know, I think, overcoming fear in patients, you know, there's the knowledge aspect of it, where they have to know it exists. We're working on that. But once they get there, and they see a screen that tells them what to do, I think it makes a big difference.
Thanks, Frank. And I think as we talk about, you know, that fear, that, or that apprehension about home, you know, self-cannulation obviously comes up as a question. I think those that have not done as much prescribing of home hemodialysis as you and I have, Frank, you know, see that as a big potential barrier. I think we've seen clinically that doesn't really seem to impact for a patient that really wants to go home. But how do you see self-cannulation in terms of your practice and as a potential barrier? Are there any other barriers you see that could prevent greater home adoption with Tablo?
Well, I think there's no doubt that cannulation is one of the things that patients have to overcome. If they have a fistula, they want to use the fistula for dialysis. I guess I'd say, you know, I've been in charge of our program for about 15 years now, and I don't think there's been a single patient that we haven't been able to train on a fistula, and have them fail because they just couldn't do it. Okay? And I, you know, I'm thinking about a patient that I had a number of years ago, literally, the first time he saw a dialysis needle, he physically ran out of the dialysis unit, and we didn't see him for, like, a week afterward. Right? And then he came back.
We worked with him, you know, he, you know, he had a girlfriend who started doing the cannulation for him. He turned his head every time. And then, you know, a month or two later, he's like: "By the way, I'm just doing it myself now. I kinda just got over it." and so I think, you know, that was as bad a needle phobia person as I think I've seen, and even he was able to do it. That said, you know, I think there's a growing consensus in the dialysis community, including in recent guidelines, set forward by sort of our... It's called KDIGO. It's our sort of international guideline-setting body, that dialysis modality choice should be the first consideration.
Meaning like, if somebody wants to go home and do home hemo, but they really don't think they can do, you know, needle cannulation, then it's okay for them to use a catheter. We actually have a fair number of patients in our program with catheters. And when you have an activated patient who really cares about their own health, you really don't get so many infections. You know, we haven't had a catheter infection in our program in over two years, I think. So, you know, every program is different, of course, but I don't see cannulation as a huge obstacle. It's an obstacle for sure, but not a deal breaker.
And Mr. Hughes, for you, I, you know, you cannulate yourself. I know you learned while you were actually in-center. Was that a barrier, or was that something that was a concern for you at all throughout your dialysis journey and considering home?
Well, cannulation is the star of the dialysis show. Cannulation is the star of the show. Without cannulation, there is no dialysis, unless you have a catheter, you know? So the fear of needles is real, and the fear of self-cannulating is real, but that needs to be one of the first sociopsychological stuff that should be dealt with, with any dialysis patient. Whatever it takes to overcome that fear, social workers, sociologists, psychiatrists, psychologists, whoever needs to intervene at the early stage of a patient getting on dialysis to help them overcome that fear is vital.
Now, Mr. Hughes, you had mentioned, you know, that there were some drivers as to why you wanted to start cannulating yourself. Could you share a little bit about that?
Yeah. Well, you know, again, like I said, cannulation is the star of the show. And for me, once I came to realize that I didn't want my star to just be taken care of by any and everybody that come along. You go in center, the techs cannulate. You don't know the tech. You don't know if the tech just came out of a training. You don't know if you're the first person the tech is cannulating. You don't know nothing. And if cannulating that access is the star of the show, then I wanted to make sure that my star was well taken care of, and I felt that wasn't nobody gonna take care of my star like I could.
I don't know if it's appropriate, but I had a little joke that I told about cannulation in the beginning, and, you know, I've never been a fan of, of multiple partner sex. You know what I mean? I'm a one-man, one-woman type of man. And the idea of going to the clinic and any and everybody that I don't even know poking me, that was a no, no. I wasn't gonna have that. Because some people poked me nice, but other people, I didn't really like the way they poked me. And if that access is my star, or as they say in clinic, my lifeline, then I need to poke this thing myself. I need to learn how to poke it. I need to poke it myself, because, see, in center, there were a couple of times when my access was poked, and I was infiltrated.
I'm not gonna go into the details of infiltration, but it's a nightmare. I felt that, you know what? If this thing is gonna get infiltrated, let it be by me. Because the 2 times in-center, or maybe 3 times, that it was infiltrated, the rage that developed in me towards the person that infiltrated me, I had to make it be clear to the nurse in the center that I never wanted that person cannulating my access ever again. So, you know, cannulation is, it's...
You know, you need to get over whatever keeps you from wanting. And then once you do that, and once you feel it, and once you get into the flow of doing it, you say to yourself, "Why in the hell did I ask for these other people poking at my access?" Do you follow what I mean?
I get it.
It's real. The fear is real. All of it is real at the beginning, but you need to do what you need to do to overcome that. And I believe that one of the best ways to help new patients overcome the fear of cannulating. See, I believe that there is no greater therapeutic value in cannulating than for one patient to help another patient.
I like that. Thank you, Mr. Hughes. And I know we're kind of up on time, so thank you, guys. I really appreciate. Leslie, any final thoughts as we close today?
No. Thank you, guys, everybody on the phone listening, and thank you for the interest and the attention in this field and for listening. Mr. Hughes, thank you so much, and-
Oh, thank you.
Dr. Liu, really, really appreciate your participation as well. Michael, thank you. Travis, thanks for including Outset.
My pleasure.
Great. Thanks a lot, everybody.
Thank you.
Okay, bye.