This article is part of a MedTech Dive series examining the impact of COVID-19 on the medical device industry six months after the U.S. declared a public health emergency. Other related reports can be foundhere。

Months ago,manymedical device manufacturers painted a grim picture: as the U.S. grappled with a pandemic for which few in the industry were prepared, most elective surgeries were put on hold,50%、60%and70%business evaporated within days.

But as second-quarter earnings reports roll in, the industry narrative is shifting. The trough in elective procedures in April had recovered to near-normal levels by June, causing device companies across the board to beat early pandemic expectations. This better-than-expected recovery trajectory spans multiple device categories.

Take heart valve specialist Edwards Lifesciences, for example, whose quarterly sales fell 15% but still easily beat Wall Street expectations. The medical industry has long criticized the term "elective" as a misnomer, as many patients delayed important treatments for harmful conditions such as aortic valve disease. However, relatively less urgent orthopedic procedures also saw a significant rebound.

"Surprisingly, hip, knee, and orthopedic procedures recovered in tandem with those more urgent surgeries, and in some cases, even faster than elective procedures that might be considered more urgent," SVB Leerink senior research analyst Richard Newitter told MedTech Dive. "I think this is largely related to the fact that these procedures are highly profitable for hospitals."

In fact, in recent reports to investors, health systems includingHCAandTenetdetailed similarly devastating business impacts from the spring reduction in elective procedures.

Although June reported a more optimistic rebound in procedures, these trends may already be outdated in parts of the U.S. New or worsening outbreaks in places like Texas, Florida, South Carolina, and Mississippi have prompted temporary county-level or hospital system restrictions on elective procedures again. As for what July specifically looks like, "that's a huge question mark," Newitter said.

Despite regional fluctuations, many company executives remain optimistic that the likelihood of another nationwide shutdown is extremely low. That prediction would leave the most severe revenue declines in the past and shift focus to returning to normal operations, even as virus transmission rates continue to rise.

What the medical device industry can and cannot control

Whether the recovery for elective procedures and the medical device industry takes a steeper V-shape or a flatter U-shape remains to be seen, depending on numerous leverage factors beyond the industry's control.

For Brett Sachs, a foot and ankle surgeon in Colorado, scheduling for elective procedures has largely returned to normal since early June, with new personal protective equipment guidelines and other COVID-19 precautions in place.

Even when procedures are allowed, Sachs has witnessed firsthand how pandemic-induced job losses have reduced patients' access to surgery. The U.S. unemployment rate was 11.1% in June, with millions losing work-based health insurance.

"Many of my patients have been unemployed for a period or forced on furlough," Sachs said in an interview. "So, the cost of treatment and even basic office visits are challenging for some patients." He said this alone has had a "tremendous impact" on surgical scheduling.

Unlike some healthcare facilities in the South and West, Sachs has not yet experienced another freeze since Colorado allowed procedures to restart in May. But the possibility still lingers in his mind.

"My schedule is relatively predictable, but I worry about procedures being canceled," Sachs said. "Infection numbers in Colorado are definitely rising. I wouldn't be surprised if restrictions are discussed again."

A greater risk to the industry's recovery might be that the outbreak scares patients away from seeking care. The healthcare industry and the device industry share an interest in bringing patients back to care and are investing in doing so.

Johnson & Johnson Chief Financial Officer Joseph Wolk said on a July 16 earnings call that the company "is developing plans to alleviate patient concerns about elective procedures and help the entire industry treat patients through new public education materials and resources designed to boost patient confidence and inspire people to prioritize their own health."

This effort follows a television, print, and social mediacampaignlaunched earlier this month by LabCorp, McKesson, the American Heart Association, and several other healthcare partners, encouraging Americans to "stop medical distancing."

Jay Zhu, who leads Deloitte's medical technology business strategy practice, believes now is the optimal time for medical device companies to ramp up direct-to-consumer marketing, a trend that has been growing in recent years. Zhu noted that over the past four years or so, companies like Boston Scientific, Exact Sciences, and Abbott have increased their television advertising.

"Expanding the patient population is a key revenue driver," Zhu told MedTech Dive.

While the pace of patient return may vary across the country, hospitals want to be ready to serve all incoming elective business. This means having the necessary personal protective equipment and testing supplies to meet surgical demand and holding more ample inventory than might have been the case previously, said Monish Rajpal, a partner at L.E.K. Consulting focused on medical devices, healthcare, and biopharma.

"You'll see a certain level of stockpiling across multiple product categories. But at the same time, hospital finances have been hit. Hospitals are relying on suppliers to provide creative ways of support," including supply assurance, cost mitigation strategies, or adjusted payment terms, he said. "Many of these requests are flowing from hospitals to suppliers because they are dealing with a financial crisis, caring for a large number of patients in need of treatment, and must do so under the ongoing threat of infection."

Leveraging ambulatory surgery centers

The need to secure personal protective equipment and testing to support more procedures is evident not only in hospitals but also in ambulatory surgery centers (ASCs). In recent years, these outpatient facilities have taken on more orthopedic and cardiac procedures, making themincreasingly importantbusiness partners for device companies.

When Texas reimposed elective procedure restrictions on hospitals in late June as COVID-19 patients rapidly filled beds, ASCs were exempt, giving them more freedom to continue scheduling procedures.

Kimberly Persley, a Dallas-based gastroenterologist and president of the Texas Ambulatory Surgery Center Society, said her outpatient center, where she performs 90% of her procedures, was very busy at the start of the year. Procedure volume fell to about 6% of normal levels in April but had recovered to 80% by June. The center is not yet at full capacity and still has room to take on more business.

A similar trend has emerged in California. Early in the U.S. shutdown, surgery centers closed or operated at only 10% of normal volume, said Beth LaBouyer, executive director of the California Ambulatory Surgery Association. While current procedure levels in the state vary by region, on average they have recovered to about two-thirds of normal business. She added that it is unclear how much of ASC business is from the COVID backlog versus new cases generated through telehealth consultations.

Similar to efforts by hospitals and device companies to encourage patients to prioritize important delayed care and promote their safety measures, ASCs and their referring physicians are taking the same actions while emphasizing their differences from hospitals. After the pandemic, many ASCs do not have to worry about balancing COVID-19 patients as hospitals do, which could increase patient interest and thereby boost prospects for the device companies that supply them.

Persley said some procedures are indeed better performed in hospitals, but for those that are not essential, this could be a turning point in getting patients familiar with ASCs. "I have patients who have always been hesitant or resistant to receiving care outside a hospital, but the fear of COVID entering hospitals has really made them embrace a new experience," she said.

Overall, as procedures increase again, there is still room for improvement in communication among hospitals, ASCs, device manufacturers, physicians, and patients, Persley said. "The response throughout this health crisis has been very fragmented."