New Surgery Style Drives Ortho Expansion

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The contract manufacturer says its implants are often used at smaller, outpatient surgical centers. The contract manufacturer says its implants are often used at smaller, outpatient surgical centers.

An emerging demand in the orthopedic sector is drumming up business for Warsaw-based Precision Medical Technologies, Inc. While major joint replacements, such as hips and knees, are the giants in the marketplace, Baby Boomers are also driving the need for more minor operations on extremities such as fingers, wrists or toes. Precision Medical Technologies is building a new facility in Wabash County to help enable these smaller surgeries and drive down cost for both providers and patients.

The new $5 million production operation will be the company’s third, and focus solely on making disposable, single-use instruments that surgeons need to implant the orthopedic devices. The contract manufacturer makes implants at its Warsaw headquarters and reusable instruments at its Noble County facility.

“We think [disposable surgical instruments] is an emerging market,” says Precision Medical Technologies co-owner Jeff Thornburgh. “If someone is having hand, wrist, elbow, ankle or foot surgery, they’re going to these ambulatory surgical centers that are popping up. You’re in and out in one to two hours and don’t have to stay overnight at a hospital.”

The company believes these smaller surgery centers are increasing in popularity because they offer two key advantages: lower costs and reduced risk of infection, compared to hospitals. Thornburgh says lower surgical costs decrease health care costs in general, and reduce the amount patients pay. To help drive down costs at the smaller centers, Thornburgh says surgeons prefer disposable, single-use instruments.

“These instruments are lower cost than reusable, but at the same time, the tolerances have to be very tight; it has to be very high-quality but lower cost,” says Thornburgh. “What fits the surgeon’s procedure well is to have a disposable driver, drill guide, drill or other types of surgical instruments that don’t have to be re-sterilized. It’s single use, and they toss it.”

Thornburgh notes the disposable instruments can be challenging to manufacture; the process is exacting, but must also be done cost effectively “if you’re going to compete in this market.”

The new operation in Wabash County, which neighbors Kosciusko County, will help the manufacturer continue to serve its sweet spot in the marketplace. Thornburgh says the company specializes in producing implants and instruments for medium-size orthopedic manufacturers, with a special emphasis on spine, extremities and trauma.

While Precision Medical Technologies currently makes disposable instruments at the Warsaw facility for a few customers, the new production operation in Wabash County will grow its capabilities. Company leaders also considered northwest Ohio and northwest Indiana, but settled on Wabash County based on workforce advantages.

“Of those three locations, we found that Wabash County had a number of people available to be trained and hired,” says Thornburgh. “The labor market for our plant in Warsaw is very tight. We struggle constantly to try to staff the machining positions we have here. We’re betting on it [being easier in Wabash County].”

The company will follow a model that has proven successful at its other two locations: operating smaller, focused factories that employ about 65 to 70 workers. The company expects to employ about 60 when the Wabash County operation reaches full capacity in approximately three years.

“We did a lot of homework to make sure this was the right move,” says Thornburg. “We’re not going to go hire 300 people, but we think the Wabash County location could probably give us 60 to 70 good, solid employees.”

Precision Medical Technology plans to launch the operation in early 2018—adding manufacturing might to a niche that’s gaining traction in the marketplace.

Thornburgh says local workforce training programs will be a great asset for the new facility.
Thornburgh says, although smaller, niche orthopedic markets are expanding at a faster rate than major areas, such as hips and knees.
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