Q3 2019 Earnings Call
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Thank you also participating in today's call. Joining me are jumped on president and Chief Executive Officer, and more Frances Chief operating Officer, and Chief Financial Officer.
Earlier I think on released financial results for the quarter ended September 32019, a copy of the press releases are available on the company's website.
To begin I'd like to remind you imagine make statements. During this call. They include forward looking statement, meaning federal securities losses for me pursuant to the he safe Harbor provision the private Securities Litigation Reform Act of 1995.
Any statements contained in this call as it relates to expectations or predictions of future events. The ultra performance are forward looking statements.
All forward looking statements include without limitation for examination of operating trends market sizing in future financial expectations, which includes expectation for hiring active surgeons reimbursement decision or do you payment and guidance for revenue are based upon our current estimates in various assumptions. These statements involve material risks and uncertainties that could cause actual.
Resolved or that materially differ from those anticipated I'm fine by these forward looking statement Accordingly, you should not place undue reliance on these statements.
Our list and description of the risks and uncertainties associated with their business. Please refer to the risk factor section of her most recent quarterly report on Form 10-Q filed with the Securities Exchange Commission Novoseven 2019, if they don't disclaims any intention or obligation except as required by law to update or revise any financial projection or forward looking statement, whether because of new.
Information future events or otherwise.
I would call contains time sensitive information is accurate only as of the life broadcast today November 11th 2019.
I'll turn the call over to John .
Thank you and good afternoon, and thank you for joining us I'm pleased to walk in Mediasite bones third quarter 2019 earnings call. During the third quarter, we continue to execute the star benefits from growing payer coverage increased surgeon training and Salesforce expansion.
Total revenue for the third quarter was $16.2 million, 21% year over year, we're particularly pleased with our continued progress in the U.S., where revenue grew 22% over the prior year period to 14.9 million doors. Our team is working strategically to expand our commercial.
Brent we ended the third quarter with the sales force of 106 total wraps comprised of 53 direct sales reps and 53 clinical support specialists, reaching or one for one target as you may recall, we started the year with 67 total wraps, including 45 direct sales reps.
22 clinical support specialist our goal was to reach 100 and to 212 total reps by the end of this year hiring 10 to 15 direct sales reps and 25 to 30 clinical support specialist with the hiring of eight direct sales reps. So far this year, we're on track to meet the sales rep.
And we have already exceeded our target by acquiring 31 clinical support specialists through the end of the third quarter.
We are primarily focused on hiring efforts to date on clinical support specialists, who are responsible for identifying new surgeons uncovering cases. The addition of a clinical support specialists to a territory gives the senior direct sales will be ability to target the most promising new surgeons.
So what trading the transition to surgeon training conversion to first case, and ultimately integration of the diagnosis and treatment of patients suffering from site joint pain into surgeon practices.
We're pleased that we've been able to meet and exceed or hiring goals, while maintaining a high level of talent across our sales organization, we're not only committed to bring on top quality reps, but also ensuring their success once they have come on board once we hire a direct sales rep or clinical support specialists, we put the rep through a rigorous two week.
Training course that requires classroom and lab training. We also recently hired a senior director of sales enablement to enhance and build our sales and leadership training processes for the entire commercial organization. This work will go beyond initial sales training moving into ongoing education for the worldwide.
Sales organization through a combination of in person training and online educational platforms in the near term. His efforts will be primarily focused on intensive training for junior clinical support specialist to ensure they rapidly come up to speed.
Our U.S. sales team works closely with the medical affairs team on training educating and supporting new surgeons, we have seen a market year over year, increasing the number surge U.S. surgeons, who are interested in our new surgeon training. We believe the increase is due.
Is due to growth in the number of covered lives in the U.S. and growing awareness of the site joint pain generator.
Amongst ortho and neurosurgeons, our larger salesforce is increasing.
Our ability to reach these new surgeons the primary measure that we used to identify our overall success with surgeons as our active surgeon metric use our surgeons, who are performed at least one procedure over the last three months. We're on track to increase the number of active surgeons from 450 during the fourth quarter two three.
I was going to 18 to 550 by the fourth quarter of 2019, moving to our international opportunity turnaround efforts remain under way in Germany, and we're seeing progress from our investments third quarter results were inline with our mid teens expectations for you Oh, you asked growth.
Excuse me.
We expect to see continuing incremental improvement over the next 12 months as the new new fully staffed German team ramps greater productivity, while other countries continue to execute.
Historically tools the primary hurdles to adoption to buy fuse had been the lack of awareness of the role as the site joint and lower back pain and lack of prior education and ESI joint diagnosis and ESI bone, we're continuing to invest a great deal with time with the surgeon community to eliminate these obstacles to that and we finished the.
Quarter with a strong strong presence at the North American Spine Society annual meeting in Chicago at NASS, We hosted several meet the expert events at our booth and engage and productive conversations with both current and potential surgeon customers. We were also involved in several mass workshops and labs that provided.
Hands on experience is for surgeons.
As well 10 days ago at the society of minimally invasive spine surgery. There was a session entitled novel ESI Joint fusion applications for adult deformity.
Physicians were pulled by moderators, Dr. Lieberman and dark east slack.
As to whether they believe the aside joint was a pain generator and whether they now believe the ESI joint was important to pay attention to more than 30 surgeons were pulled and 100% responded positively.
We are seeing this change in interest and believe reflecting the number surgeons asking to attend training on September 26, we announced the publication of our five year follow up results from Lois a long term prospective study. The study showed the results of on 103 patients treated with the I fuse implant system.
At five years, the data demonstrated durability of the clinical response and positive long term radiographic fusion outcomes related to the procedure.
The study further supports the benefits of minimally invasive SRT joint fusion with five years.
We believe our superior clinical data is the key is a key component of growing positive support from clinical evaluation organizations and garnering payer wins many of which are exclusive to ifyou is based on the clinic. This clinical evidence.
Active July one 2019, well Mark Blue Cross Blue Shield, which ensures approximately 1.5 million members in South Dakota in Iowa established positive coverage for minimally invasive ESI joint fusion. Additionally, effective September one 2019 health, New England, which ensures approach.
Next week 200000 members in Massachusetts upgraded its medical policy to include coverage on minimally invasive ESI joined fusion only with the Ifyou implant system and when performed by a surge.
We will continue to leverage the extended results from Lois along with other published clinical data to drive progress on the reimbursement front and pick up the remaining you asked commercial payers. The currently do not cover I fuse as covered lives continued to grow in the US we're strategically placing new salesforce hires in areas of income.
Pushing insurance coverage to lay the groundwork to capture this opportunity.
Another key hurdle to buy fuse adoption has been the level of surgeon payment for the I fuse procedure. As a reminder, in July 2017. The code was identified as Miss valued by the CMS in the Federal Register this past July .
CMS proposed to maintain the current surgeon payment based upon the recommendation at the rock, but solicited public comment on whether an alternative valuation would be more appropriate over 80 surgeons and societies responded to request supporting a higher valuation for the code CMS agreed with the surgeons is.
And society important, but the payment understated the inherent work effort and intensity of the procedure as such as such CMS increased the CPT codes National average overall surgeon payment by 27% to $915 from $720 in the final.
Rule release November Onest.
Many private payers set their payment amounts with reference to the Medicare payment typically 10% to 33% higher than the Medicare payment for the procedure.
The Medicare fee schedule will be updated to reflect this new amount effective January one 2020.
The change in payment may impact the behavior of certain surgeons. For example, it is possible. We may see some surgeon delayed Q4 cases in Q1 to receive the higher payment. It is difficult for us to gauge the impact on our business in 2020 until we see the response from surgeons, but we believe.
The 27% increase will affect I fuse adoption overtime.
In addition to the progress on our core business, we are continuing to see increasing interest in our ifyou bedrock technique, which we believe is an important advance and how surgeons treat adult deformity patients. We were part of the official NASS program with us surgical symposium on public fixation faculty.
Including Dr., Chris shaft free from Duke and Dr., David Poly from the University of Minnesota discussed available fixation options in their alternatives addressing the biomechanical by our mechanics of loading at this lumbar sacred junction.
The program highlighted the adjacent segment impact to the ESI joint refusing the lower spine and identified our new I fuse bedrock technique as an improved approach for long construct adult deformity cases in Europe , all bedrock regulatory reviews are now complete.
We anticipate that we will receive formal notification of the CE Mark certification later this November .
Once received we will launch I refuse bedrock in Europe .
As we've mentioned acknowledgement of the site joined US a pain generator by key opinion leaders is foundational important to arrive fuse business. We are starting to see previously skeptical tail wells now pay attention to the aside joint evidence of this shift is coming from their adoption of the bedrock technique.
Please turn of IPH use cases at these academic institutions and request for education of the residents and so.
We are beginning to see the kale well trickle down effect on our I fuse business encouraging ortho and neurosurgeons to include the site joint and their differential diagnosis of lower back pain.
Results should be increased penetration of by fuse for the 279000 people in the us that we believe our newly impacted each year by debilitating side joint.
Aside bone has always been accompany grounded in robust and high quality long term data and we remain committed to building on our vast body of clinical evidence. We have initiated a clinical study called Sylvia or ESI joint stabilization in long fusions to the pelvis randomized control trial.
Sylvia is a prospective blinded randomized control trial with one to one randomization one arm of the study will include patients receiving standard multi level fusion surgery with fixation to the pelvic health. This using estuary ice groups. The second arm will include pace.
Since who received the multi level fusion surgery with Esterly ice screws and I fused bedrock over two years, we expect to roll 200 patients across up to 20 centers with meaningful data read outs at two years post procedures.
Expect the first patients to enroll in the first quarter 2020.
Overall, we are continuing to execute on our hiring surgeon training reimbursement and product plants. We are confident that we are well positioned to take advantage of the large opportunity in front of us with that I'll now turn the call over to lower for details on our financial performance then we'll return with closing comments.
Third quarter, 2019 revenue increased 21% $16.2 million compared to 13.4 million dollar for the third quarter 2018.
Increasing revenue was primarily driven by an increase in domestic case.
You asked revenue for the third quarter with $14.9 million, representing 22% growth over the same period of the prior year.
International revenue for the third quarter with $1.3 million, representing 14% growth over same period of the prior year.
Gross margin for the third quarter, 2019, or 90% compared to 91% and the corresponding prior year period.
The slight decrease in gross margin was driven by an increase in personnel spending to support the growth of our business.
As a reminder, this is in line with our expectation for gross margin to trend toward the mid to high 80% range over the next couple of years.
Operating expenses increased 65% to $25.1 million for the third quarter 2019, as compared to $15.2 million in the core on prior year period.
The increase was primarily driven by higher 13 education spending an increase in sales force hire additional resources allocated to advertising and marketing stock based compensation and litigation.
We did an RFP any expenses, we recognize the loss reserve of $2.5 million during the third quarter, which reflects the estimated cost the company may incur from settlement of litigation.
Frank Chiropractor alleges that one of our field marketing representative sent invitations to an educational dinner event brightly effects and only transmission.
Including App down instruction.
Further information concerning this litigation can be found in our 10-Q filing that we plan to file with the FCC later this week.
The operating loss was $10.6 million in the third quarter 2019, compared to $3 million in the core funding prior year period.
Our net loss was $11.3 million or a loss of 46 cents per diluted share the third quarter 2019, compared to $4.8 million loss of one dollar and 29 cents per diluted share in the corresponding prior year period.
We ended the third quarter with a $1 million to $101.5 million in cash and marketable securities.
Turning to our outlook for 2019, we now expect revenue to be in the range of $65.5 million to $66.5 million.
Any growth of 18% to 20% over full year 2018. This compares to the previously communicated range of $65 million to $66.5 million, which represented growth of 17% to 20% over full year 2015.
I'll turn the call back over to Jeff for closing comments.
Thank you Laura we have a terrific team assembly that slight bone that is dedicated to transforming sacred pelvic treatment. Our growth rates are result of better reimbursement coverage increased field personnel, new products and the training of additional surgeons.
I am encouraged by our sales performance and other accomplishments in third quarter and I'm confident in our ability to continue expanding our commercial footprint in the near and long term with that I will now open it up to questions operator.
Thank you, Sir ladies and gentlemen, you have a question at this time. Please press star the number one on your telephone if your question Thats been answered all your wish to you leave yourself from the Q. Please press the banking.
Hi.
Our first question is from David Lewis from Morgan Stanley .
Good afternoon.
Jeff I just wanted to start on commercial investment for second that another quick one for you.
Because I take stock of to the majority of this year clinical supports up materially at your training is up materially last nine months, but we haven't yet seen an impact on the numbers to quarters fine. It's in line with their estimates, but there was no underlying momentum improvement in the second quarter versus the third and your guidance doesn't imply.
Up into the fourth fomented perspective, so just help investors to understand why in light of nine months of investment.
We just haven't sort of seen that inflection yet in the in the U.S. market and it kind of related to that what does your confidence that these initiatives really take hold heading into 2020, and we see that acceleration.
So three comments David.
First comment is as you know the growth rate is gone in the last four quarters from 13%, 18% to 19% to 21%. So it is but it is certainly moving into right direction.
Secondarily.
We invested as you know in the investors know very little last year and so most of the investment has really been wait me year last year and this year and as I think we've communicated.
Now some of those investments take time, particularly the investment in the field organization to make take they typically take.
Nine to 12 months.
And so some of that does have a delay.
That is associated with it I think a lot of companies that go public.
Invest ahead of the public offering.
We didnt.
It is what it is and we may be investment. We've now made the investments and as you saw were a little even a little bit ahead of our plan to get too.
No 106 kind of people on the field, we've done that by the third quarter as opposed to the fourth quarter. So.
We're doing that because we feel very confident and what we're doing we think we're executing.
Really well on the hiring from.
Really well on the education front really well on the reimbursement, including the payment, which will certainly have some impact in the future and then I guess finally, what I would say to you or to your last question is how confident are you.
In the fourth quarter and the future I'm very confident I feel.
Very very good that those investments.
Are going to pay dividends and we're starting to see those with this.
No it's not a huge jump up from 13% to 21% over the last four quarters, but but I think it's certainly not bad.
And now we'll have to see how the fourth quarter goes and obviously, we're almost halfway through it so.
We have a good feel for that but we feel quite confident and where we're sitting today and.
Honestly I think the team is doing a great job.
Executing against that and.
Except where this comment that we made that maybe some cases at the ended the quarter may swap into next quarter, we feel very good about the Q4 numbers.
Okay, and maybe if it's a great segue in your last comment about the fourth quarter I mean impact of physician reimbursement like in our work that thousand dollar level is an important milestone for a lot of physicians and trends or whether they they want to consider doing this procedure I just kind of curious whether.
Is this an incentive for adoption or more just lowers an obstacle for the commercial team and I guess more directly what I'm asking is is it incremental positive or is it a rather material way and the way you think physicians are going to look at this procedure post the post the reimbursement and how concerned all you about sort of the fourth quarter churn relative to reimbursement in January .
I'm not that concerned about the fourth quarter I'm, just saying that we try to disclose risks in the business and that is that as a small risk.
Hi.
As to the beginning of your question David.
No no doubt that I, when we got the word from CMS that raise.
The dollar amount to $950, which if you've looked at that the geographically adjusted numbers in places like New York in Chicago, The Medicare payment is now north of $1100.
Which should mean $1400 on the commercial side ish.
We have seen some I had one of the area Vice presidents in last week and he said no. This doctor and this dark during the same practice stopped doing the procedure because they weren't pay getting paid enough and they're coming back on they will be already told me they're coming back on so I do think we're going to see those people.
That sort of went sideways.
Sure.
The payment.
Didn't go up in the past.
Come on so I think we're going to see.
Some positive effect, where we're not quite ready to give you 2020 guidance, we'll do that.
No.
In the earlier part of next year.
As we sort of baked together.
The whole picture and see what the how the fourth quarter finishes, but no overall.
I think we're going to see.
No renewed strength in the business or continued strength in the business.
Okay, great. Thanks, so much I'll jump back in Q.
Welcome.
Thank you. The next question is from Bob pockets from Bank of America.
Great. Thank you.
Just on the coverage, Jeff can you kind of walk us through what potentially could happen over the course of the next six months in terms of some of the bigger payers that have yet to come onboard with the.
Schedule look like and what the potential for some wins there.
Sure so.
He asked them Bob.
Continued and back in September their expense experimental Paula see before the five year data came out.
I suspect that we've got another year there with anthem. We are certainly we've set than the five year data and we're trying to get him to do an interim review Humana.
I think.
What I'm hearing from them because they are they are supposed to publish in December on all spine procedures, but the work involved with the sacroiliac joint update is a little bit bigger and that may get done off cycle into the earlier part of next year, that's what we're hearing.
At Cigna are they on review right now and as we've shared with you. They took that to their monthly meeting and we've had confirmation of that multiple times for multiple places so.
I will be surprised if it if the positive coverage.
All right goes in place any later than sort of mid January so we're quite optimistic about Cigna Aetna review is due in January as well. So that's kind of the wrap up on on the four.
Okay, that's super helpful and just.
From a big picture perspective, how are you feeling about the prospects relative to say three months ago.
Well, we feel predictive.
Yes, we feel very good are you talking about in general about the business or are these guys.
This process like that was helpful really helpful update on timelines, but I just want to know that kind of more qualitatively.
How are you feeling about the prospects for.
For person for some wins here in the next six months.
Thank you.
We feel.
We feel quite good about signal we've had numerous surges be told tell your patient to hang on for 60 days or those kinds of comments. So we feel very good about cigna.
With Humana.
I am last year, but we've got some direct.
Discussions going on now.
Aetna.
Been back and forth with Bob Mcdonnell.
The kind of go silent before they published so we havent had any communication in the last 30 days and I think their data is January 9th or 15, if I can't remember, which one but it's in the first half of January .
Anthem is still tough.
Honestly they been a bit.
Harder to get to handle on from a communication standpoint, So do I think we'll get them all over the next 12 months sure I do.
But.
Anthems, the one where we kind of missed the window with the five year data and and it's hard to get them to get back on the horse in the middle of the race. Okay. That's great and then I just want to also as quickly about bedrock.
This this clinical trial this year that you're talking about.
Do you need to do that trial to drive interest in bedrock, just maybe talk about interest level that you're seeing right now and is the reason for the trial that maybe you realize that you need to do this in order to make this product work.
So just some commentary there and then I'd love to know what you're trying to show with trial like what what's the what's the endpoint.
Yeah. So.
First of all I don't think we need to do it to show that it works.
This is.
An unusual product.
In my mind, and I think a lot of People's mind.
As you know the sales cycle. When you are in the ESI joint business, although the market as gigantic it takes time and what I mean by that Bob is you have.
You train a surgeon they start to evaluate patients and then the patient has to go through six months of Conservative care and then you can put them on the table one helped the patient get better here we are.
Frequently seeing surgeons say this makes complete sense I want to do.
So I don't think it's a question of interest a question of recognition of the improvement that bedrock will bring given the buyer mechanics being 30% better than anything that's out there.
The real reason for the trial is I think competitively and for long term reimbursement.
We were a company that had has built our competitive capability.
Where we've had a lot of people come at us and I think we've done a tremendous job competitively.
No.
The beating out there because of clinical evidence and philosophically. We just think it's really important to invest in clinical evidence and show black and white.
Reimbursement is fine today, but I want an insurance policy to make sure that we have.
Insurance coverage.
Over the long term for this and.
What was the last question.
Yeah.
You covered it.
Okay great.
Thanks, so much Jeff.
You're welcome Bob.
Thank you. The next question is from Dave Kelly from GMP Securities.
Excuse me David Your line is open.
Sorry about that.
You mentioned some of the momentum that you have sort of coming out of the NASS conference and I was wondering.
Given the bedrock there was some interesting presentations there but.
This surge and active surgeon I know you may not want to give us the exact number but.
Do you think we'll see some of these long contract adult deformity, maybe KNL type guys, becoming some of your active users from that overtime, what we see some of those folks wind up in that 550 by the end of the year.
I think it's Dave Dave and I think we're going to see bedrock, a big scale wells and within those hospitals, we are going to see.
Mainstream ESI joined fusion and there's one very big Hospital for instance in the Midwest. That's a very important hospital group, where we.
I have not been able to get in there for call. It five years and three weeks ago Saturday, We train 14 surgeons, including the head care well and the reason we got in there was bedrock.
And we don't train when we go in there we don't train them on bedrock, we train them first on the anatomy, we train them on ESI joint diagnosis, we train them on.
Mainstream ESI joined fusion with ice use at then we train them on bedrock and so there were as I said 14 surgeons in that session.
California Hospital that I'm going to put in the top no sort of three or four hospitals in California teaching hospitals. We had the same thing where there were I think it was a dozen surgeons still 10 o'clock at night on Thursday night from from four o'clock, where the top to physicians were there.
And then there was a slew of junior surgeons.
And and.
A few fellows and resident so I think the way it's going to play out is you're going to get bedrock is done by quite a smaller group, but you're going to see and we're starting to see that kind of stuff.
Percolate down to regular I fuses and I think.
Some of that.
Doesn't happen overnight, because we really just.
Now on these two examples in the last 30 days, but I think by the time Weve turned the corner into next year, we'll start to see those major academic institutions, where we've done very little have business from the.
Not second tier, but the not the top top top people are doing ESI joined fusion.
And certainly the falls in residents are keenly interested in in all aspects of what we're talking about both bedrock and.
I fuse.
Let's say that sounds like you're getting more eyes on product more more.
Experienced thank you for that.
And then just followed by the director of sales enablement enablement I think.
You've got some senior guys that have done a lot of good things in spine overtime Im just curious.
What made that made you guys make that decision to have.
Separate person and I think you mentioned junior sort of have helping training some of the junior folks but.
Yes, I guess just any color around.
Why now and who that is.
Thanks, I have there's two aspects to that David we've made a very big based investment in the field for US I think we've done a stupendous job hiring really good people right on schedule or maybe a little bit ahead of schedule, but it's a gigantic investment and we want to make sure that the investment actually.
Bears fruit.
The person came from I think it was Saint Jude and the vertical flex is a very senior person.
And that person, we've had training and we had a full time training person, but not as senior as this person.
We we are I'm very impressed with this particular person in their job is to put program mize all these kinds of.
Educational.
Initiatives.
Including.
Putting programs online so this self learning.
Putting these people through more rigorous testing.
Because.
It's not about testing and and give them a grade we want these people to be successful in the field and so we're we're actually.
Last week, we just went through a another budgeting session for for 2020, and this particular individual presented to myself and Laura and Tony Recoup ROE and and the finance team.
I got to tell you I would just super impressed with the programs that that he put together.
Then I think will will help.
The management the sales management program mice, and really use the best practices out there across the entire organization of over 100 field people.
Thank you.
Welcome.
Thank you. Your final question is from Kyle Rose from Canaccord Genuity.
Great. Thank you very much taking the question.
I wanted to kind of follow ups, a little bit I mean, obviously to understand the investment in a leader you're bringing in as far as the sales training and maybe just talk about what you're seeing in the most recent group of hires you brought on over the course last nine to 12 month and what are the productivity metrics you're really following now.
Secondly for the support reps and how should we be thinking about those reps taking that next step.
After that nine month period, and really moving to productivity Q4 and over the course of next year.
Hi, Elvis's, Laura just a couple of comments may we hired 31 clinical support specialists.
In nine months this year and then we hired great.
Territory manager and.
The clinical support specialists are more junior wraps and the what those reps are involved in is they do a lot of cold calling.
Perspective surgeons.
And then they try and identify a surgeon that have an interest in.
Going to training and adopting fuse into their practice and that's one that surgeon will relationship moves over to the senior sales rap.
And then in addition, they cover a lot cases as well.
So the idea is to take a territory with the territory manager what the clinical support specialist underneath that territory manager and as we know the territory will Max out at around 10 million and a half in revenue because that territory manager can't cover cases and.
More cases than that and so then what we're looking to do is to grow productivity from that million and a half to 2 million by adding the clinical support facelifts. So the main measure that we look at it productivity, we look at the growth within.
The particular territory from a revenue perspective, we'll also look at their active surgeons as well.
See how that's trending we'll look at how many surgeons they trained.
Those are the main factors that we're actually looking at.
Terms of hiring the director of sales enablement goal is to really see if we can bring especially the more junior wraps up to speed more rapidly. So as Jeff said, it really takes around 12 months in order to really start to see the productivity.
Keep in these cases and so the goal is to use the additional online training right along within the field with the.
Stables sales enablement group in order to bring them up to speed faster in order to drive our growth faster as well.
Okay, Great and then just one follow up.
I understand you're not going to talk about 20 to 20 growth rate.
Respect that but maybe help me understand you might think about the drivers exiting 2019 in entering into that ended 2020, you've got.
The underlying productivity metrics are from these reps coming on board you should have increasing.
Reimbursement.
For the procedure broadly you outlined the for me to players on the sidelines hopefully one turns there.
And then you also have this through this.
Physician reimbursement number I guess I'm, just trying to understand what can be the biggest driver when I think about it from a reimbursement perspective is the physician reimbursement rate more important or is it getting those those four.
Payers turned on what what's the biggest driver in 2020.
I would.
I would say the biggest drivers hi, how are the sales team productivity.
Hi, kicking in.
I would say, it's it's surgeons trained.
How many surgeons, where weve added.
A lot of surgeons have come to training and and that is.
Increasing all the time.
It is certainly the bedrock effect in the trickle down.
And I do think that there will be.
Help from the actual surgeon payment.
I think we could grow.
Very respectable rate and as you know going from 13 to 18 to 19 to 21 is reasonable progression.
That even if none of these payers come on that we can have a very healthy growth rate in 2020 and.
As I said earlier, we're pretty confident that cigna's going to contribute.
But I think the bulk of the growth in the business is not going to come whether we get humana are not humana as you know as an example is almost not all but very Medicare and very government oriented. So I believe that's a little bit of a catalyst and I wouldn't call. It a great care.
Yes, it's sort of a nice name on the marquee, but when it turns to numbers, it's not as big.
And.
Well, we're certainly not counting on anthem, although we're working on it and we're certainly.
So to 50 50 on Aetna.
So I think it's really more of those other four things of the sales team.
The surgeons coming and I think that that payments.
Even beyond the bedrock attraction.
From a surgeon standpoint, the payments sort of takes much of that off the table and I know some studies have been done by some of you.
On the analysts side around what's the elasticities and what's the inflection that might or might not come from the payment number.
But I don't think it's a black and white issue, but I do see we're already seeing examples of surgeons as I mentioned, let's say, okay I'm back in the game and it may not be in in the minute, but I think thats going to increase the demand for surgeon training and potential.
Really increase the number of active surgeons in eight.
Helpful Way.
Okay, great. Thank you for taking the question.
You're welcome Kyle.
Thank you that concludes seeking any session.
I'd like to turn the call back to Mr. gift item for closing comments.
Okay, I, just I just like to close by thanking you offer for attending today and.
Have a great evening, and we'll look forward to.
The next number quarters.
We feel like we're doing the right things and.
Feel quite good about the business. So thank you very much.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.