Minimally invasive sacroiliac (SI) joint fusion is an increasingly common treatment for patients with low back pain due to SI joint dysfunction. Therefore, it represents a high-growth potential niche in the orthopedic spine market.
While an attractive space due to a large addressable market and low penetration, it does have some inherent headwinds and challenges. Diagnosing SI joint dysfunction is notoriously tricky, and most potential patients will not be indicated for surgery due to a broad array of conservative treatment options. Additionally, private payors have been slow to cover SI joint fusion, and changes to existing coverage could significantly disrupt the market. Even with coverage, some surgeons find reimbursement rates too low for the work, both surgical and administrative, required for the procedure.
Despite these headwinds, we see the market growing significantly in the medium-term once surgical volumes normalize to pre-COVID levels. The 2019 SI joint fusion market ranged between $150 million to $250 million globally, with double-digit annual growth according to our estimates.
Sizeable Addressable Market for SI Joint Fusion
More than a quarter of all U.S. adult workers experience low back pain, according to a 2019 study published in the Annals of Internal Medicine. Nearly 17% of workers who reported low back pain had missed at least one full day of work in the last three months due to the pain. The loss of income combined with medical expenses results in an expenditure of $60 billion annually in the U.S.
As the SI joint gets more clinical consideration as a low back pain generator, medical device companies are increasingly focusing on this market segment. SI-BONE estimates that there are 4.7 million people in the U.S. who suffer from low back pain, and about 30% of them, or 1.4 million, are eligible for SI joint fusion.
Per the company, most of those patients will receive more conservative treatment like analgesic injections. However, the remaining 279,000 cases represent a $2.8 billion annual market opportunity in the U.S. alone. Additionally, there is ample runway for revenue growth as SI joint market penetration is below 10%.
Difficulty in Diagnosing SI Joint Dysfunction
SI-BONE’s estimation of the market opportunity is a best-case scenario, however. Sacroiliitis, the inflammation of one or both SI joints, can be challenging to diagnose. There is a significant overlap in the possible causes of lower back pain.
SI-BONE’s CEO Jeff Dunn spoke of the challenges facing the company’s iFuse implant. He said, “Historically, two of the primary hurdles to adoption of iFuse have been the lack of awareness of the role of the SI joint in lower back pain and lack of prior education in SI joint diagnosis. At SI-BONE, we are continuing to invest a great deal of time with the surgeon community to eliminate these obstacles.”
Drs. Guilherme Barros, Lynn McGrath and Mikhail Gelfenbeyn, neurological physicians at the University of Washington, further detailed the diagnostic difficulty for SI joint dysfunction. They wrote in a 2019 paper, “Degenerative disc disease, facet arthropathy, ligamentous hypertrophy, muscle spasm, hip arthropathy, and SIJ dysfunction are potential pain generators and exact clinical and radiographic correlation is not always possible. The standard spine surgery workup often fails to identify an obvious pain generator in many individuals. The significant number of patients that fall into this category has prompted spine surgeons to consider other potential etiologies for [low back pain], and SIJ dysfunction has become a rapidly developing field of research.”
Reimbursement Headwinds for SI Joint Fusion
Medicare has reimbursed for minimally invasive SI joint fusion since 2016. However, some private payors have been slower to adopt positive coverage, and many of these payors have policies that treat the procedure as experimental or investigational. Even with coverage, reimbursement amounts may dissuade some surgeons from performing the procedure. The average reimbursement amount for a Category I CPT (including SI joint fusions) is $915.
SI-BONE wrote in its 2019 annual report, “We believe that some surgeons may continue to view the Medicare and commercial reimbursement amounts as insufficient for the procedure, given the work effort involved with the procedure, including the time to diagnose the patient and obtain prior authorization from the patient’s health insurer if necessary. Many private payors require extensive documentation of a multi-step diagnosis before authorizing minimally invasive sacroiliac joint fusion for a patient. We believe that some private payors apply their coverage policies and criteria inconsistently, and surgeons may not be able to have minimally invasive sacroiliac fusions approved and covered consistently. The perception by physicians that the reimbursement for minimally invasive sacroiliac joint fusion is insufficient to compensate them for the work required, including diagnosis, documentation, obtaining payor approval for the procedure, and burden on their office staff, may negatively affect the number of procedures performed.”
Even with a challenging reimbursement environment, market leader SI-BONE has racked up a string of positive coverage wins that include 35 exclusive coverage policies for their iFuse implant. The company has mostly achieved this through its focus on clinical evidence, including over 80 peer-reviewed papers and two level 1 randomized studies. Still, policy changes from even one private payor can have far-reaching consequences.
Conformis, a player in the knee replacement market, and SI-BONE are similarly sized companies. Aetna began denying coverage for Conformis’ knee implants in 2019, causing the company’s revenue to decline nearly -14%. Aetna is unlikely to change its policy decision in 2020. Those denials, coupled with the impact from COVID-19, could present an existential threat to Conformis. The Conformis scenario illustrates reimbursement’s impact on any niche market.
SI Joint Fusion Draws Players of All Sizes
The size and growth potential of the SI joint fusion market has made it an attractive space, despite the challenges of diagnosis and reimbursement. Numerous small private companies have followed public players into the market segment. Among the companies competing in the area are:
- Genesys Spine (SI Fusion System)
- Globus Medical (SI-LOK)
- Life Spine (SIMPACT)
- Medacta (M.U.S.T. SI)
- Medtronic (Rialto)
- Orthofix (Firebird)
- Pantheon Surgical (Blue Topaz/CompresSIve)
- SI-BONE (iFuse)
- Surgalign, formerly RTI Surgical (SImmetry)
- Tenon Medical (CAT SIJ)
- Zimmer Biomet (TriCor)
As we’ve shown in THE ORTHOPAEDIC INDUSTRY ANNUAL REPORT®, the spine market favors specialization. Spine-focused players generally outperform their diversified counterparts, and that trend remains true as we look at specific subsegments like SI joint fusion.
With revenues of $67.3 million in 2019, we estimate that SI-BONE is the leading player in the SI joint fusion market. The company’s revenue grew +22% in 2019 vs. 2018 on the strength of over 6,400 procedures during that year. Moreover, SI-BONE has consistently accumulated positive coverage wins. At the end of 2019, the company had access to 282 million insured lives in the U.S., with 147 million of those covered by private payors. SI-BONE’s efforts to further penetrate the market include significant surgeon education as well as headroom to be flexible in regard to pricing. Company CFO Lauren Francis said, “We are premium-priced products. Our product is, on average, around 10% to 15% higher than other companies, and rightly so given the amount of work that we have done in this space, the amount of education that we have put in, the clinical data that we have and so on. With that said, we do look at our ASPs, and given our strong gross margin profile, we want to make sure to continue to penetrate the market and grow with it. Our ASPs decline by a couple of percent a year. We expect that to continue to occur over time.”
SI Joint Fusion’s Future
Like all orthopedic market segments, SI joint fusion volumes declined precipitously due to COVID-19. SI-BONE endured 80% volume reductions in April of 2020, with some mitigation coming in May. The company still drove +12% growth for the first quarter, however, showing the underlying strength of the market and the fruition of its education efforts.
Outcomes for minimally invasive SI joint fusion are generally good. SI-BONE reported patient satisfaction of 95% with VAS Pain Reduction of 54 points and ODI Disability Improvement of 26 points. Interim clinical outcomes for Surgalign’s SImmetry implant showed that 71% of patients had a statistically significant reduction in pain from their baseline and 60% of patients using opioids pre-surgery were opioid-free at 12 months post-surgery.
Given the late-June surge in COVID cases, we expect orthopedic volumes to remain depressed throughout 2020. However, in the medium-term, we see SI joint fusion continuing to gain surgeon adoption and payor coverage, leading to sustained double-digit growth for the next several years.
Mike Evers is ORTHOWORLD’s Digital Content Strategist.