The good news is that i-STAT Corporation’s handheld blood analyzer system, the i-STAT System, has the potential to revolutionize the way healthcare is administered. That’s also the bad news.

i-STAT, a pioneer in point-of-care medicine, developed a blood analysis instrument that fits in the palm of the hand. The device is used with one of i-STAT’s 13 different test cartridges to produce accurate results of critical care blood tests from just a drop or two of blood in about two minutes at the patient’s side. The tests include electrolytes, general chemistries, blood gases, immunoassays, and coagulation.

The system eliminates the traditional process of sending a blood sample to the lab where someone analyzes it and gets the results back to you, explained Alex Beveridge, VP of operations at i-STAT’s Ottawa plant. Adopting the device means major changes to the way hospitals do blood tests.

The instrument is completely automated and doesn’t require a medical specialist to operate it. Each cartridge is capable of performing up to eight tests and costs about $5, making it very affordable. There’s virtually no involvement required from a user, and it is maintenance free. “Between the microchips and the hands-off automated approach of the system, that’s a distinctive competence no one else seems to have,” said Beveridge.

Founded in the early 1980s by Dr. Imants Lauks, an electrochemist, i-STAT operates high precision manufacturing facilities at the company’s East Windsor, NJ headquarters and in Ottawa. It uses advanced semiconductor manufacturing technology such as photolithography, electrochemical principles, and cutting-edge computer electronics and software.

Operations run 24 hours a day, seven days a week. The 10,000 square-foot East Windsor plant produces the analyzer instrument that measures output from test cartridges. The 100,000 square-foot Ottawa plant houses wafer fabrication and cartridge assembly operations; it has 550 employees and approximately 10,000 square feet of clean rooms.

Dramatic changes
Over the last five years, i-STAT has doubled its revenues, and it hopes to increase its growth rate significantly over the next two years. The Ottawa plant is currently producing 15 million cartridges per year, but it has the capacity to produce 40 or 50 million units.

However, healthcare professionals’ resistance to change limits the company’s growth. “The only thing limiting our expansion is our ability to convince hospital laboratory management that the resulting improvements in patient care are worth the dramatic change in their organization,” said Beveridge. “It’s not the technology that’s limiting, it’s the ability for hospital laboratory management to adapt to change.”

To overcome this challenge, i-STAT is transitioning its marketing and sales approach. The company announced it is terminating its marketing agreement with Abbott Laboratories and will absorb the marketing and sales responsibilities for its products as of January 2004.

“We expected them to increase our sales rate dramatically, but that didn’t happen,” said Beveridge. “So we’re going back to our own methods of selling, which are quite different from Abbott’s, and we think more effective for us. That’s why we decided to go independent again.”

i-STAT’s selling methods involve direct sales to a hospital’s clinical staff and management, rather than laboratories. “Laboratories are tough to convince because it’s such a dramatic change in their system,” Beveridge said. “When we demonstrate the patient benefits and economic savings to hospital management, they are quite receptive.”

Unusual manufacturing
One of i-STAT’s most important strengths is its manufacturing. To begin with, they are the first company to make biosensors using semiconductor wafer technology. “No one else does that,” said Beveridge.

i-STAT’s manufacturing is also unusual in that instead of a vertical management structure, i-STAT trains and empowers its employees to make decisions, eliminating a traditional chain of command. “You give them the tools to do the job themselves and the training to communicate with each other. It’s much faster and more effective,” said Beveridge.

Cross-functional teams are used to manage product flow. “Rather than being organized in vertical silos, we’re organized in teams that move the product through the line,” said Beveridge. “Their job is to make the pipeline of product smooth. Rather than ‘I’m a tech, and I work on machines,’ it’s ‘I work with this team, and I make product.’”

Efficient manufacturing processes are critical to i-STAT’s success because it’s in a highly regulated industry. “You have to completely validate every process. When you bring on a new product, you have to have 510K authorization from the FDA to sell it,” said Beveridge. “You have to have complete device history records from the start of production right through to the end, so if you have any incidents, you can completely trace what happened with that particular
product.”

i-STAT’s manufacturing abilities will come into play even more strongly as they expand into new areas. The company has just released its next product, called Troponin I, that helps doctors determine if a patient is having a heart attack. Results are available in 10 minutes, as opposed to the traditional 60-minute lab test. Other tests for the company’s handheld device are also in the works. “We plan to do perhaps two or three new cartridges a year with different immunoassay tests,” said Beveridge. “We plan to expand our product line with tests that are highly effective for point-of-care use.”