Dive Brief:

• Surgeons foresee three out of every four elective procedures returning by September, according to findings from a recent survey led by Bain & Company’s healthcare team.
• The survey of 366 physicians and 75 administrators conducted in late May also found 60% of respondents believe their organization is completely equipped for the return of elective procedures, up from 45% when Bain presented the same query a month prior.
• Such optimism tracks with recent commentary by medtech management teams at investor conferences, many of which suggested forecasts given going into the second quarter may have been overly conservative.

Dive Insight:

Medtech companies' calls with investors following the first quarter offered some stark figures on the steep drop-off in elective procedures in light of COVID-19.

BD said its surgery revenues were down as much as 70% in April. Stryker, which estimated half of its business was vulnerable to deferrable procedures, projected a nearly 40% drop in April sales. At Boston Scientific and Smith & Nephew, that revenue cut was closer to 50%. Intuitive Surgical, one of the earliest major medtechs to report earnings, said da Vinci robot use fell 65% in late March.

But since sharing those figures, the pace of return for lucrative elective procedures has improved, according to commentary from recent investor presentations. CMS on Tuesday took further steps encouraging patients to seek deferred care, although it said higher risk patients should still avoid major surgeries for the time being. 

Based on responses collected by Bain from 160 interventional cardiologists, cardiac surgeons, neurosurgeons, orthopaedic surgeons, and general surgeons, on average the physicians expect surgery volumes to reach 60% of last year's level this month, and 75% come September.

Tim van Biesen, who heads Bain's global healthcare practice, noted that while "there's a huge amount of regional variability in the United States," recent numbers are "a really good canary in the coal mine that this will come back quite quickly."

Across both device and diagnostic companies, execs have hinted at better-than-feared results this quarter.

Hologic, for example, updated investors Monday that its surgical revenue this quarter will likely decline 65% to 70%, but the business is recovering faster than expected. Offsetting some of those declines, it's seen a bump to its diagnostics business from COVID-19 tests, expecting revenue in the unit to grow 20% to 25% this quarter.

Likewise, Quest Diagnostics, which had noted that a surge in COVID-19 testing did not offset the drop-off in routine testing volumes, told investors last week that while the company has continued to experience a material decline in its testing volumes since its first quarter earnings call, its base business has recovered faster than anticipated. It's been buoyed by business in parts of the U.S. where economies have reopened, and if trends continue, second quarter earnings per share could break even or be slightly profitable, the company said.

As for Medtronic, May and June procedure recovery "continue to outpace what we anticipated," new CEO Geoff Martha said Tuesday during a Q&A at the Goldman Sachs Global Healthcare Conference. In particular, Medtronic's cardiovascular and spine businesses performed better than expected. While Medtronic had cautioned its current quarter may be worse than its recently reported fiscal fourth quarter, Martha said it should actually be in line.

Despite resumption of elective procedures, healthcare facilities aren't necessarily ready to support the full return of medical device representatives. More than 60% of Bain's survey respondents expect there to be in-person restrictions on medtech rep visits even as COVID-19 treatments and vaccines become available, whether those reps are doing sales or providing technical support.

As elective care resumed in some parts of the country, AdvaMed issued re-entry guidance May 19 jointly developed with the American Hospital Association and Association of periOperative Registered Nurses in part covering symptom screening, testing, and PPE recommendations for medical device reps. AdvaMed said Wednesday an additional 26 healthcare organizations had signed onto the guidance, including the Ambulatory Surgery Center Association, American College of Surgeons, and American Academy of Orthopaedic Surgeons.