Updated June 24, 2013: This episode of the Disruptors Series, co-produced by MassDevice and HB Agency, won the 2013 Communicator Awards’ Award of Excellence for Online Video.
The Lawrence, Mass.-based home hemodialysis maker is on the forefront of renal care for dialysis patients with big ambitions and even bigger competitors.
Brad Perriello, co-founder & executive editor of MassDevice.com, sat down with Burbank recently to discuss NxStage’s history, its future and what he’s most proud of in building the company.
Brad Perriello: I wanted to start by asking you about the origin of the company. How did you know this was the right technology at the right time?
Jeff Burbank: NxStage is about 14 years old. I founded it and I had been in the industry for about 12 to 15 years before that, so I was knowledgeable about what was going on in the kidney failure space and end-stage renal disease. There were some trials that looked at whether frequency could benefit the patient, versus a traditional 3 times a week in-center dialysis.
And it really looked like there were some interesting data coming out, that if give the patient either longer duration or more frequent therapy that they could drive some really significant clinical benefits. But that was not going to happen in the dialysis center – no patients were going to spend 6 or 7 days a week on dialysis. It really needed the convergence of a therapy that can move to the patient, versus a patient moving to the therapy. And then the ability to deliver more frequent treatments.
So it’s really the inspiration of clinical data, and then some technology factors came together with electronics getting smaller and less costly, with fluidics improving. So the perception that you could put something that stands this tall, weighs a couple of hundred pounds and has a lot of infrastructure into an affordable, easy-to-use, easy-to-learn, safe system, started to make some sense from the technological and clinical perspectives.
So that was the vision. It’s rare that the vision aligns well with the execution. We actually have done all that now, and even got it very well proven, some of those clinical benefits, and shown that we can reduce mortality with the more frequent home therapy provided by NxStage. So it’s been very exciting.
JB: One of the things that intrigued me was that you can’t take big competitors like that square on. And it seem that for home hemodialysis to really work, the technology had to be fundamentally designed. And my experience is that a different kind of business structure can be very helpful to that process. So we were venture-backed, we were a focused entity. We didn’t have product on market so we could focus exclusively on technology development, and do it in a different way than the incumbents had.
So we saw this crack in the market, where nobody could jump into it without going through the process of development. We were 1st with the work. There were probably 3 or 4 other companies at that time chasing the same opportunity that we were. They are not here; we are. So we had the first mover advantage and we keep extending that benefit as we go.
BP: Reimbursement has been a difficult issue for NxStage over the years. I was hoping you could give us some color on what it’s been like to ride that roller coaster?
JB: Sure. You know, I could have a lot of emotions about [the Centers for Medicare & Medicaid Services]. But on the one hand, we are all taxpayers, so we want [CMS] to be really prudent stewards of our money. And on the other hand, we have a therapy that I think is superior for many patients. And the patients want to do it. I’d like to see appropriate reimbursement in place, so that those folks who want it have access to it. And the economics drive a lot of access and availability.
The unique thing about this space is that the end-stage renal disease program is a very specific program. In fact, it’s 1 of the most advanced programs within CMS, because regardless of your age, if you have end-stage renal disease and you don’t have insurance coverage, the government will step in and pay. So it is universal coverage – it’s an entitlement, and that’s a great thing.
But because of that, CMS is a primary payer and CMS is going to be very conservative. So the burden of evidence is very high for CMS to routinely cover. Now, with that said, CMS has provided a vehicle to create reimbursement or provide reimbursement for more frequent care. They do it, however, through a medical justification process. So it’s little more burdensome and less predictable than we’d like.
We would like to see progress there and, in fact, essentially all of the private-payers have moved to usual and customary payment for NxStage therapy, more frequent therapy. And that just occurred in really that last 12 months, so we are very excited about that. We still have some works to do with CMS. They are paying, and we appreciate that, under the medical justification process. But that’s more burdensome and less predictable for providers, so they are at risk when they should not be. When the clinician thinks it’s the right therapy for the patient, and the patient wants to do it, reimbursement should be provided routinely. So we have some progress to make there.
BP: What are you most proud of as founder and still CEO of NxStage?
JB: I think the 1 thing that people get really excited about at NxStage is the impact on patients’ lives in home hemodialysis. In fact, today was a very unique day. One of our employees came back to my office and said, "Do you have a minute?"
He walked out to the front and a patient who could not get therapy at their center had looked up our address, driven over here and he and his wife came into the office and said, "Can you help us get on your therapy?"
It’s just so life-changing for people. We need to work on the access. We need to create the opportunity there, where a particular provider didn’t offer it at their center so they were trying to find ways to get on the therapy. That’s the kind of passion that a better therapy that can make patients live longer. It’s very exciting. You can see it as you walk around the facility. You will see folks that are pretty passionate about what we do and the benefits we can bring to the patients.