Masimo
Annual Report 2014

Plain-text annual report

International Edition RegulatoRy Notice this annual Report (“annual Report, international and investor edition”) presents Masimo features and/or products that are marketed outside of the united States and for the global investor audience. See the “annual Report, u.S.” for Masimo features and/or products that are FDa-cleared for the united States market. at the time of printing, not all Masimo features and/or products profiled in the “annual Report, international and investor edition” have worldwide regulatory clearances and/or approvals. For example, the following profiled features and/or products are pending clearances as of February 12, 2015: • europe ce Marking: animal Health products, iSpo2, and iSpo2 Rx for infant & neonatal use and MightySat Rx • canada MDl: iSa aX+, iSa oR+, iSpo2 Rx for infant & neonatal use, Radius-7 and oRi. To the many who have helped shape, guide, inspire, and innovate the first 25 years of Masimo, thank you. table oF coNteNtS Timeline 6 ceo leTTer 18 THankS 28 SeT® 62 Hemoglobin 76 rooT 92 rainbow® expanSion FuTure leaderSHip appendix FinancialS 110 120 134 142 144 152 4 5 tHe FiRSt 25 yeaRS 1989 Founding of masimo company founded by Massi Joe e. Kiani and soon after Mohamed Diab and Mary Kiani joined 1995 High-Fidelity pleth waveform First true diagnostic- quality pleth waveform 1995 mS-1™ board First commercially available Set® oeM board 1995 masimo SeT® pulse oximetry First Measure-through Motion and low Perfusion™ pulse oximetry – debuts at the Society for technology in anesthesia™ and wins excellence in technology innovation award PI 1995 perfusion index First accurate quantification of amplitude of the pleth waveform to 0.02% First Implementation with Masimo SET® 1996 kontron multi-parameter First Masimo Set® mulit- parameter implementation 1996 lnop® Sensors High signal-to-noise ratio sensor with non-absorbent material, rejuvenating adhesive, and replaceable tapes – minimizing waste 1998 iVY biomedical 2000 First Masimo Set® standalone device implementation in the u.S. First Standalone with Masimo SET® 1997 nec First Masimo Set® standalone device implementation Breakthrough Study 1998 breakthrough study shows masimo lnop® sensors last nearly twice as long as the market-leading adhesive disposable sensors thomas a et al. Respir Care. 1998;43(10):860. 6 7 tHe FiRSt 25 yeaRS Measure-through Motion 510(k) 1998 First FDa 510(k) clearance for Measure-through Motion pulse oximetry SmarTone 1998 SmarTone™ ability to maintain saturation tones with variable pitch during low signal-to-noise conditions 1998 SofTouch™ First Masimo sensor designed for sensitive skin of neonates Max 1998 max Sensitivity Setting allowing reliable measurement in the most challenging conditions of low perfusion 1998 datascope Datascope, along with other oeMs, brings commercialization of Masimo Set® in to their patient monitors Measure-through Low Perfusion 510(k) 1999 First FDa 510(k) clearance for Measure-through low Perfusion pulse oximetry 2000 radical® pulse oximeter First 3-in-1 pulse oximeter standalone device for bedside monitoring with detachable handheld unit for portable monitoring, SatShare ® interface to upgrade conventional pulse oximetry in multi-parameter patient monitors to Masimo Set®, and first monitor to have an automated rotational screen 2000 Signal iQ® First to quantify measurement quality and give clinicians a way to know when to have confidence in the Spo2 values during motion and low perfusion FastStart 2000 FastStart™ Spo2 value in less than 10 seconds from the time the instrument is turned on 2000 FastSat ® enabling accurate tracking of rapid saturation changes Award-winning Breakthrough Study 2000 Study shows masimo SeT® helps increase caregiver efficiency Durbin c.g. et al. Anesthesiology. 2000; 93(3a): a-556. Breakthrough Study 2002 Study shows masimo SeT® helps wean patients from the ventilator faster, reduce Fio2 levels, and reduce arterial blood gas measurements Durbin c.g. et al. Crit Care Med. 2002 aug;30(8):1735-40. 8 9 tHe FiRSt 25 yeaRS Breakthrough Study 2002 breakthrough study shows masimo SeT® linked to reduced medical errors in critical care medicine Hay W.W.et al. J Perinatol. 2002 Jul-aug;22(5):360-6. APOD 2003 adaptive probe off detection® (apod®) Reducing false display of values by 83% when the probe is not on the patient, compared to competing pulse oximeters Breakthrough Study 2003 breakthrough study shows masimo SeT® linked to reduced retinopathy of prematurity in neonatal patients chow l.c. et al. Pediatrics. 2003 Feb;111(2):339-45. 2004 lncS ® Sensors low noise cable sensor design 2005 blue ® Sensor First sensor for accurate measurements in cyanotic infants and children 2004 rad-5 ® Handheld pulse oximeter First handheld incorporating Masimo Set® 2004 newborn Sensor First sensor designed for newborn monitoring during resuscitation 2005 rainbow® SeT® in mx-1® board First noninvasive blood constituent platform 100% Desat Index Alarm Limit 93% Low SpO2 Alarm Limit 90% 2 O p S Time (in minutes) 20 40 60 80 2005 3d desat index alarm™ First alarm to alert clinicians to patterns of transient desaturation that may predict respiratory depression 2005 rad-57® First handheld capable of noninvasively measuring carbon monoxide levels in the blood SpCO 2005 Spco® First noninvasive carboxyhemoglobin measurement x e d n I n o i s u f r e P 1.0 0.9 0.8 0.7 0.6 0.5 0.4 PI Baseline determined by the Radical-7 PI Delta % Change = 25 (within a 1 hour period) Time Alarm triggered 2005 3d perfusion index delta alarm™ First alarm to alert clinicians of changing peripheral perfusion status that may indicate worsening condition 10 11 tHe FiRSt 25 yeaRS SpMet 2006 Spmet ® First noninvasive methemoglobin measurement 2005 radical-7® First bedside rainbow Set® Pulse co-oximeter® Breakthrough Study 2005 breakthrough study shows assessment with masimo SeT® improves screening for congenital heart disease in newborns de-Wahl granelli a. et al. Acta Paediatr. 2005 Nov;94(11):1590- 1596. 2007 patient Safetynet™ First remote notification system capable of rainbow® measurements – with optional central monitoring based on 802.11 abg PVI 2007 pleth Variability index (pVi) First noninvasive and continuous fluid responsiveness measurement 2008 national Fire protection association Standard NFPa 1584 releases fire rehab standards and includes carbon monoxide assessment during fire rehab Breakthrough Study 2008 breakthrough study shows pVi® predicts fluid responsiveness during surgery cannesson M. et al. Br J Anaesth. 2008 aug;101(2):200-6. 2008 neopt-500 First sensor for extremely low birth weight babies 2008 rad-87® First Pulse co-oximeter with integrated 802.11 abg wireless radio SpHb 2008 SpHb® First noninvasive and continuous total hemoglobin measurement Breakthrough Study 2008 breakthrough study shows Spco® identifies unsuspected co poisoning in the eR Suner S. et al. J Emerg Med. 2008 May;34(4):441-50. 2009 rainbow reSposable ® Sensor System featuring performance of adhesive sensors with green Designed in™, which reduces both landfill and carbon footprint 12 13 tHe FiRSt 25 yeaRS RRa 2009 rainbow® acoustic monitoring (ram™) First noninvasive and continuous respiration rate (RRa®) monitor with acoustic sensor Breakthrough Study 2010 Study shows masimo SeT® and masimo patient Safetynet improve outcomes in adults on the med-surg unit – fewer rapid response activations, icu transfers, and icu days taenzer a.H. et al. Anesthesiology. 2010 Feb;112(2):282-7. Fluid Management Study 2010 Study shows pVi helps clinicians improve fluid management and decrease lactate levels in surgical patients Forget P. et al. Anesth Analg. 2010 oct;111(4):910-4. Breakthrough Study 2010 Study shows pVi helps assess which patients will become hemodynamically unstable with the addition of PeeP Desebbe o et al. Anesth Analg. 2010;110:792-798. Foundation for Ethics, Innovation, and Competition in Healthcare 2010 masimo Foundation for ethics, innovation, and competition in Healthcare created with a $10 million gift 2010 radical-7 Featuring touch screen display, wireless capability, and external display functionality Halo Index 2011 Halo index™ cumulative trending assessment of the global patient status. increases in Halo index suggest physiologic deterioration and may indicate a need for clinicians to more closely assess the patient Breakthrough Study 2010 SpHb breakthrough study shows SpHb monitoring helps clinicians optimize blood management ehrenfeld J.M. et al. American Society of Anesthesiologists. 2010;lb05. RRp 2011 respiration rate from the pleth (rrp™) First noninvasive and continuous respiration rate measurment from the pulse oximeter signal 2010 pronto® and pronto-7® First noninvasive spot checking of hemoglobin, Spo2, pulse rate, and perfusion index Adaptive Threshold Alarm 2010 adaptive Threshold alarm First dynamic physiologic alarm threshold based on changes from each patient’s baseline value 2012 capnography and gas monitoring Masimo begins offering innovative, multispectral technologies for measuring respiratory gases and anesthetic agents 14 15 tHe FiRSt 25 yeaRS SpfO2 2012 Spfo2™ the first noninvasive fractional oxygen saturation monitor measurement 2013 iSa™ capnography the iSa capnography Moc-9 module for Root features high sidestream performance and offers cost-effective disposables through the innovative Nomoline™ adapter with extended monitoring time and use of generic cannulas 2013 root ® patient monitoring and connectivity platform First device to integrate: > rainbow® measurements > iris™ connectivity for third party devices > Masimo open connect™ (Moc-9™) for measurement expansion 2013 iSpo2 ® pulse oximeter the first pulse oximetry for both ioS (apple) and android™ mobile devices 2013 Sedline ® brain Function monitoring the Sedline Moc-9 module for Root features 4 simultaneous channels of high-quality eeg data; Sedline provides continuous information about both sides of the brain and provides information about a patient’s response to anesthesia 2014 o3™ regional oximetry the o3 Regional oximetry Moc-9 module for Root features near-infrared spectroscopy (NiRS) and reflectance pulse oximetry to enable simultaneous monitoring of tissue oxygen saturation (rSo2) in the brain and arterial blood oxygenation (Spo2) 2014 radius-7™ Radius-7 for Root is the first and only wearable, wireless monitor with Masimo’s breakthrough rainbow Set® technology 2014 eve™ newborn Screening application animated tutorial for the Radical-7 specifically designed to help clinicians more effectively and efficiently screen newborns for critical congenital heart disease (ccHD) 2014 TFa-1™ Single-patient-use forehead sensor for Masimo Set® 2014 rainbow® dci®-mini the first and only reusable spot check hemoglobin sensor for infant and pediatric patients from 3 to 30 kg ORI 2014 ori™ the first noninvasive and continuous parameter to provide insight into oxygen reserve in patient’s receiving supplemental oxygen 2015 mightySat™ First fingertip pulse oximeter with Masimo Set® Measure- through Motion and low Perfusion™ technology For sports and aviation use only in the u.S. 16 17 letteR FRoM tHe cHaiRMaN & ceo 2014 marked the 25th anniversary of Masimo. i would like to thank everyone, from our employees and customers to our investors and advisors, who has helped Masimo achieve its mission of improving patient outcomes and reducing cost of care by taking noninvasive monitoring to new sites and applications. We believe that Masimo Set® pulse oximetry now helps clinicians monitor more than 100 million patients a year and is the primary pulse oximetry technology for eight of the top 10 hospitals on the u.S. News & World Report best Hospitals Honor Roll for 2014-2015. that’s a long way from 1989, when we started with a $40,000 loan on my condominium and the dream that one day we could fulfill our Mission stateMent Improve patient outcomes and reduce the cost of care by taking noninvasive monitoring to new sites and applications.® mission, make a contribution to society, reward the investors So even as i take humble pride in Masimo’s achievements, current market needs and, more importantly, anticipating who believed in us, and achieve financial stability. i can tell you we are all committed to achieving even greater future market expectations. a few of the highlights include: accomplishments in the years to come. this is one reason why Since its introduction, Masimo Set® Measure-through Motion we worked so hard to put in place a plan several years ago to and low Perfusion™ pulse oximetry has helped prevent at least produce a product a month during 2014, our 25th anniversary. 25,000 potential cases of retinopathy of prematurity (RoP) in this was more than just flexing our innovation might. by 1 ce Marking of o3 regional oximetry* for Root. o3 regional oximetry uses near-infrared spectroscopy (NiRS) through Moc-9 with up to two sensors per Moc-9 module. each sensor newborns worldwide, and has impacted the quality of care for producing clinically significant products at a pace unmatched contains four light-emitting diodes (leDs) and two detectors to millions of patients of all ages, including babies born with critical by anyone else in the medical technology industry, we continuously and simultaneously measure both organ oxygen congenital heart disease, and adults in post surgical wards. demonstrated that Masimo is more than capable of addressing saturation (rSo2) and arterial blood oxygenation (Spo2). Root *o3 regional oximetry is pending FDa 510(k). Not available in the u.S. Joe kiani Chairman & CEO, Masimo 1818 19 reVenueS // 200 5-2014 In mIllIons of d oll ars Product revenues // royalty revenues allows either one or two o3 Moc-9 modules to be connected, enabling monitoring with as 3 FDa 510(k) clearance of the Root patient monitoring and connectivity few as one and as many as four sensors. organ platform. Root can be a hub at the bedside, oximetry, also known as regional oximetry enable Masimo’s breakthrough noninvasive and cerebral oximetry, enables the continuous measurements to be used by experts innovative and cost-effective Nomoline offering patients continuous monitoring sampling line > Wireless functionality – capable of transmitting information through assessment of the oxygenation of the organ and novices with trend and analog views, bluetooth and Wi-Fi. beneath the sensor. o3 helps clinicians detect take advantage of a rich set of additional cerebral hypoxemia that pulse oximetry alone measurements, and provide other companies can miss. in addition, the Root monitor can a robust platform on which to develop other automate the differential analysis of regional innovative measurements via Moc-9. High- 4 later, Masimo also announced iSa oR+ multigas monitoring, a Masimo open connect (Moc-9) Module for Root. During to central oxygen saturation. o3 monitoring impact innovations in Root that are now general anesthesia, the iSa oR+ monitors is as simple as applying o3 regional oximetry available in the u.S. include: the inhaled and exhaled concentration of five sensors to the forehead and connecting the o3 Moc-9 module to any Root through one of its three Moc-9 ports. 2 iSpo2 Pulse oximeter for android. With the release of iSpo2 in the popular android operating system, more consumers than ever have access to Masimo Set® anesthetic gas agents (Sevoflurane, isoflurane, > iris – built-in connectivity gateway through iris for verified standalone devices such as Halothane, Desflurane, enflurane), carbon dioxide (co2), nitrous oxide (N2o), and oxygen iV pumps, ventilators, hospital beds, and (o2), in addition to respiration rate. When other patient monitors to eMR technology modules are connected with Root, > Moc-9 – Flexible measurement expansion through Masimo open connect (Moc-9) including Masimo Set® pulse oximetry, noninvasive and continuous hemoglobin multiple additional parameters are available Measure-through Motion and low Perfusion™ with Moc-9 modules from Masimo or third- (SpHb), PVi, Sedline brain function monitoring, pulse oximetry – the same technology used in party measurements from other companies and o3 regional oximetry. leading hospitals worldwide. iSpo2 provides to expand the platform’s measurements accurate, real-time oxygen saturation and capabilities. New Moc-9 modules may (Spo2), pulse rate (PR), and perfusion index require new 510(k) clearances (Pi) readings – ideal for anyone who desires 5 another amazing technology for Root that we’re very proud of is Radius-7, the first and only wearable, wireless monitor with access to accurate health data through their > capnography – iSa co2 sidestream module Masimo’s breakthrough Masimo Set® and mobile devices. featuring fast warm-up time and the rainbow acoustic Monitoring™ technology, 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 total revenues Product revenues royalty revenues 2005 107.9 --- --- 2006 224.3 155.5 68.8 2007 256.3 200.2 56.1 2008 307.1 259.6 47.5 2009 349.1 300.1 49.0 2010 405.4 356.4 49.0 2011 439.0 406.5 32.5 2012 493.2 464.9 28.3 2013 547.2 517.4 29.8 2014 586.6 556.8 29.8 *the use of the trademarks Patient SafetyNet and PSN is under license from university Health System consortium. with freedom of movement. Radius-7, which received FDa 510(k) clearance in 2014, can alert clinicians – at the bedside or remotely, through our Patient SafetyNet* remote monitoring system – of critical changes in a patient’s oxygen saturation and pulse rate – even during states of motion and low perfusion – as well as GuidinG PrinciPles > Remain faithful to your promises and responsibilities > thrive on fascination and accomplishment and not on greed and power > Strive to make each year better than the year before, both personally and for the team > Make each day as fun as possible > Do what is best for patient care 20 2121 respiration through acoustic respiration rate color screen that can be rotated for real-time its name to the daughter of annamarie prolonged intubation.4 the study was among (RRa). lightweight at only 0.34 lbs. (155g), the display of the pleth waveform as well as Saarinen, co-founder and ceo of the Newborn 12 selected from more than 1,000 as one of Radius-7 attaches to the patient’s arm, allowing measurements. optional bluetooth wireless Foundation. eve was diagnosed at 48 hours the best abstracts at the american Society untethered monitoring while they are in bed or functionality enables measurement display via old with ccHD, and annamarie has made it of anesthesiologists (aSa) annual Meeting out. With no need to disconnect and reconnect a free, downloadable app on ioS and android her life’s mission to make sure all newborns in New orleans, the largest gathering of the cable to get out of bed, the Radius-7 mobile devices as well as the ability to trend are screened. We hope our eve software anesthesiologists in the world. reduces the need for nursing assistance. and communicate measurements. and for feature will help professionals accomplish and the Radius-7’s wireless communication those who want to use their pulse oximeter their mission to help save the lives of babies functionality – either short-range via bluetooth to evaluate another physiologic dimension, and spare families from heartbreaking loss. back to Root or with upgradeable WiFi‡ for MightySat is the only fingertip pulse oximeter long-range communication – ensures the available with the optional Pleth Variability patient can be continuously monitored and index (PVi), a measure of the dynamic changes connected to caregivers wherever they are in Pi that occur during one or more complete 8 oxygen Reserve index (oRi™†). With ce Mark and limited market release, oRi became the first noninvasive and continuous hemoglobin (SpHb) spot-check sensor for infants and small children (weight 3 to 30 kg). Paired with Masimo’s handheld Pronto 9 ce Mark, clearance in Japan, and limited market release of the rainbow® Dci-mini™¥. Dci-mini is the first noninvasive in the hospital. Radius-7 allows clinicians to respiratory cycles.2 parameter of its kind to provide insight into device, the rainbow® Dci-mini sensors are continuously monitor their patients when they are mobile, and studies have shown that patient mobility is a key factor in more rapid patient recovery.1 a patient’s oxygen reserve when they are designed to help clinicians quickly and easily 7 ce Mark of eve™*, a newborn screening application for the Radical-7. Masimo gained its first commercial foothold in the receiving supplemental oxygen. With oRi, spot-check hemoglobin levels. Dci-mini allows Masimo’s rainbow Set® Pulse co-oximeters clinicians and public health programs around with the latest MX-5 circuit board can now the world to expand hemoglobin assessment Nicu, so this new technology holds a special measure an unprecedented 11 parameters3 to vulnerable populations who need a 6 MightySat, the first fingertip pulse oximeter with Masimo Set®. MightySat, for sports and aviation use, is available in place for us. eve is an intuitive software through noninvasive optical rainbow® sensor noninvasive and convenient method. We hope feature to help clinicians more effectively technology. a clinical study at the university that the new rainbow® Dci-mini will help more screen for critical congenital heart disease of texas Southwestern and children’s Medical infants and small children, along with their three versions – each of which provides (ccHD). eve automates the screening steps center in Dallas evaluating oRi showed moms, around the globe to receive timely oxygen saturation (Spo2), pulse rate (PR), with animated instruction, including sensor that oRi can provide advanced warning of assessment and treatment, which will benefit and perfusion index (Pi) measurements in a application, measurement selection, and potential hypoxia and may help clinicians their long-term health, as well as the health of compact, battery-powered design with a large screening result determination. eve owes optimize oxygenation before and during our society. 470,000 449,000 342,000 inSTalled baSe // 2005-201 4 estImated unIts excludes handhelds 1,313,000 1,205,000 1,088,000 979,000 855,000 640,000 567,000 ‡ the configuration for long-range communication is not yet released. * eve ce Marked. currently not available in the u.S. † oRi is ce Marked. currently not available in the u.S. ¥ rainbow® Dci-mini is ce Marked. currently not available in the u.S. 1 Needham D, Korupolu R, Zanni J, Pradhan P, colantuoni e, Palmer J, brower R, Fan e. “early Physical Medicine and Rehabilitation for Patients With acute Respiratory Failure: a Quality improvement Project.” Archives of Physical Medicine and Rehabilitation Vol 91, issue 4, PP 536–542, april 2010. 2 the utility of PVi is unknown at this time and requires further clinical studies. technical factors that may affect PVi include probe position and patient motion. 3 eleven parameters include: 1) oxygen saturation (Spo2); 2) Pulse rate; 3) Perfusion index (Pi); 4) Pleth Variability index (PVi); 5) Respiration Rate from the pleth (RRp); 6) total hemoglobin (SpHb); 7) oxygen content (Spoc); 8) carboxyhemoglobin (Spco); 9) Methemoglobin (SpMet); 10) Fractional oxygen saturation (Spfo2); 11) oxygen Reserve index (oRi). 4 Szmuk P, Steiner J, olomu P, Dela curuz J, Sessler D. oxygen Reserve index - a New, Noninvasive Method of oxygen Reserve Measurement” Proceedings of the american Society of anesthesiologists, oct.14, 2014, New orleans, boc12, Room 275-277. 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2222 23 earningS per SHare daTa For annual reporT // 2008-2014 FY2010 year ended January 1, 2011 FY2012 year ended december 29, 2012 FY2011 year ended december 31, 2011 FY2008 year ended January 3, 2009 FY2009 year ended January 2, 2010 FY2013 year ended december 28, 2013 e r a h S r e p s g n n r a e d e t u i l i d $1.21 $0.88 $1.05 $1.07 $1.02 $0.53 FY2014 year ended January 3, 2015 $1.30 10 ce Mark of the tFa-1* transflectance forehead adhesive sensor. tFa-1, a single-use sensor for adult While we are happy that we fulfilled the expectations of everyone who invested in Masimo up until we went public, we are before. that included product revenue of lifesaving breakthrough products become $556.8, million – up 8% from $517.4 million. ubiquitous in healthcare settings and beyond. Since 2007, we have focused on building our technology will expand and evolve to and pediatric patients, offers clinicians restless in fulfilling the expectations of our a strong and knowledgeable worldwide meet the future needs of healthcare, by the power of Masimo Set® pulse oximetry investors, post our iPo. i am grateful for the sales and marketing organization, capable helping improve surgical and post-surgical on an alternative monitoring site for rapid patience that our investors have exhibited of expanding both our Masimo Set® and outcomes with shorter lengths of stay. by detection of oxygen saturation changes while we work through the 10-year plan we rainbow® businesses. While we continue to better assessing patients we can help reduce during low perfusion. tFa-1 also offers established in 2007. the good news for those make strategic investments in our worldwide the cost of care. pulse rate, perfusion index, and PVi who remained patient over the past 7 years organization, we believe that we have now measurements. tFa-1 gives clinicians yet is that we expect all of the planning and reached the level of staffing needed for our We’ve set in motion the “consumerization” of another way to leverage the breakthrough execution of the past 7 years will begin to pay sales, marketing, engineering, and other our core technologies with the iSpo2 pulse measurement capability in Masimo Set® off in not only the lives we improve and save, organizations to support higher product oximeter for smartphones, and more recently pulse oximetry. by continuing to take but the increase we expect in our earnings revenue growth. Masimo’s breakthrough technologies to and hopefully our stock price. MightySat, the world’s first fingertip pulse oximeter with Masimo Set® pulse oximetry. new sites and applications, we are helping it is not hubris to envision that within the elite athletes such as an olympic silver improve patient outcomes and safety while For fiscal year 2014, total revenue rose 7% to next 3 years, Masimo will reach new heights medal cyclist and a four-time free diving reducing cost of care. $586.6 million from $547.2 million the year with our customers and shareholders, as our champion and guinness World Record holder 2008 2009 2010 2011 2012 2013 2014 *tFa-1 is ce Marked. currently not available in the u.S. first masimo set® technology board dr. Peter cox testing masimo pulse oximeter while breathing nitrogen first test patient using masimo set® technology one year anniversary of masimo listing on nasdaQ one millionth oximeter shipped executive team helps millionth oximeter on its way 24 25 25 it is humbling and profoundly motivating to think that the technology we have created – and continue to create – is saving and improving lives around the world. are using our technologies to help improve their training stop us from getting our breakthrough technologies in the and recovery regimens. throughout most of Masimo’s hands of clinicians for the safety and care of patients. history, our medical devices have been designed to help patients recuperate. Now, we’re also helping healthy it is humbling and profoundly motivating to think that the people improve their lives. technology we have created – and continue to create – is saving and improving lives around the world. this is a Since its beginning, Masimo has confronted and overcome great honor, and a great responsibility. on behalf of all of obstacles – a real-world David versus goliath story, only us at Masimo, we look forward to rising to the challenges with sequels. it has been a wonderful journey, with many of this millennium, driven by the mission to improve successes and challenges, and undoubtedly many more yet to patient outcomes, while reducing the cost of care by taking come. but we stand alert and ready and will not let anything noninvasive monitoring to new sites and applications. Joe kiani Chairman & CEO 26 26 27 Joe Kiani and mohamed diab solved the “unsolvable” – inventing pulse oximetry that was accurate when patients moved or had low perfusion. ouR StoRy, FRoM tHoSe WHo liVeD it 28 28 29 The Early Years as told by Mohamed diab, Mary Kiani, Walt Weber, Bob smith, and ammar al-ali Mohamed diab “it’s mixed in-between. if you’re not shaking your hand, then you on physiology that helped us better understand the problems we get a good reading. as the late Dr. Swan characterized it, “Pulse were facing. oximetry has been, at best, a fair weather friend.” What DSt gives > At Masimo, we learned from the beginning that if it could be imagined, Mohamed could make you is a map; it says this is the good number and here are some of “wHen maSimo STarTed, i wanted to help my brother, because it become reality. That’s how good he is. From figuring out how to make adaptive filters work in the bad numbers. it just breaks things up and shows a total map. he was working full time and doing Masimo at the same time with noninvasive monitoring, to figuring out the discrete saturation transform, he has always been that enabled us to extract the correct arterial saturation even no help from anyone. i was a licensed dentist, and working full time from the 1975 debut of the nihon Kohden olv-5100, the world’s first pulse oximeter, a core of technical ability and integrity that allowed our company to attract many other amazing under motion conditions, and that’s the power of it. that changed at an office in brea, but my work was at night and Saturdays which the science of pulse oximetry was plagued by unreliability when it was needed most engineers because they love working around Mohamed. – during patient motion and low perfusion. the industry had given up and considered the problem “unsolvable.” clinicians were forced to live with the results – excessive false alarms, delayed notification due to long averaging times, inaccurate data, and an inability to obtain data on the most critical patients. When Joe Kiani and mohamed diab looked at pulse oximetry signals differently than anyone had before, they created new possibilities. By employing advanced signal processing techniques – including parallel engines and adaptive filters – they believed they could find the true arterial signal that would allow accurate monitoring of arterial oxygen saturation and pulse rate, even during the most challenging conditions. after six years of dedicated and focused research and development, masimo set ® debuted in 1995 at the society for technology in anesthesia and won the prestigious excellence in technology Innovation award. everything for us because we knew that there was at least one gave me all day to help him. i did secretarial duties, answered Joe Kiani solution to the motion artifact problem! the phones, and handled the mail, did library searches, whatever “wHen we STarTed Masimo, medical device manufacturers assumed that ‘motion was needed. i was also Director of Medical affairs, being the only artifact’, in pulse oximetry was an ‘unsolvable’ problem and that the best a pulse oximeter “We solved the low perfusion problem –measuring blood oxygen degreed person on staff with anything like a physician’s license. could do was detect the presence of motion and freeze the number on the screen until the saturation at extremely low blood flow – by properly designing i conducted early patent searches at the los angeles public library. motion subsided. in fact, even the slightest hand motion generates extraneous signals, our hardware and sensors and by using advanced digital signal When professional copies needed to be made of the business plan many times the size of the arterial pulse, and hence it can easily corrupt the measured processing techniques. this enabled us to reliably extract that Joe had developed or logo graphics for publications, arterial signal, which causes conventional pulse oximeters to display false low or high Spo2 extremely small signals under a wide range of patient conditions. i would go to the printers. i helped our mom cook for the christmas and pulse rates – resulting in false alarms as high as 90%. i recall a meeting with Joe Kiani parties, and to provide food for the investor and director meetings. in late 1989 where he told me that if we were to build a successful pulse oximeter company “by the summer of 1992 bob Smith, Rex Mccarthy and Walt basically, i took care of whatever he needed to free him to work we had to solve two fundamental problems: Motion artifact and low Perfusion. Weber had joined Masimo. they have tremendously contributed on the prototype, develop the business plan, find investors, go to to the hardware, software and algorithm development. bob’s various business conventions, and all other things that he did to “We started with motion artifact knowing well that adaptive filters were the way to go – work on a very low-noise platform was crucial in extracting very make the company happen – which were endless. but how? No book or paper had a solution for the problem. our first breakthrough came low signals. Walt and Rex further developed the DSt as well as in May 1990 when we figured out a way to mathematically extract a signal that described newer techniques for extracting the arterial signal under motion “When Masimo first gained ample funding, we had about 60 people the noise using a conventional sensor with only two leDs. However, that solution condition. in 1995 ammar al-ali joined us and quickly became on staff. Joe asked me to resign, as he had people who were more required a quiet period, at the beginning, where a clean arterial signal could be sampled. the leader of Masimo’s pulse oximetry development with major qualified to be members of the board of directors of the company mohamed diab unsatisfied with that solution, the second breakthrough came when i was on a plane contributions to the algorithms, software and system design.” by that time. Joe always did what was best for the company. that coming back from Syria. i ended up calling it DSt, the discrete saturation transform. “Here’s a simple explanation: imagine you’re moving to los angeles and want to buy a house. you ask what the median price of a home is, but there’s a huge difference in Mary Kiani meant having the right people for the right job at the right time, and i was no longer what the company needed. i was happy to do it, as my intention all along had been to help until i was no longer needed. i had my own career and a growing family. He made sure prices in different areas. So, what if someone gives you a map of each city in the area: the > Mary was a full-time dentist and recently married, yet she knew that i had plenty of shares in our then still-private company. He median price in Palos Verdes is this, in beverly Hills it’s this much, in compton this much, her brother was also working a full-time job while trying to build always took care of people. i didn’t realize what the stock might a distribution of prices. you can look at the full picture and more easily see where you can what became Masimo. With no expectations of any stock or value, mean, and i wasn’t the only one who found out about the rewards afford to buy. With a conventional pulse oximeter, when you shake your hand, you get a merely to help out, she drove to the L.A. Public Library to conduct of helping Joe. a friend of his, barry Miller, loaned Masimo a top- false reading that is kind of the average between the venous and the arterial saturations. patent searches and to UCSD and UC Irvine to do library searches of-the-line Macintosh computer at a time when we couldn’t easily 30 mary Kiani 31 afford one, so Joe could do the business plan; because of being i wanted to do. What i was doing initially was showing what monitoring products. this continuity within the company has so gracious about the computer, Joe gave him 30,000 shares, was achievable by conceptualizing and developing algorithms been rewarding and wonderful to be a part of. which later with all the stock splits became much more shares. together with a system for processing data. one of the things barry passed away before Masimo went public, but his wife that really opened up my eyes, back then, was a journal “it’s been quite a journey, 25 years now as a company, and and daughter made a lot of money with those shares. at the by the institute of electrical and electronics engineers on it was well worth it. We’ve shipped over 1 million Signal first annual shareholder meeting after 2007, barry’s widow biomedical signal processing. the biomedical signal processing extraction technology® pulse oximeters. We believe over 100 found Joe and said, ‘Joe, we felt like barry sent us money from state of the art was primitive compared to the state of other million people are monitored with them each year. every time heaven.’ Helping people can pay off in ways you don’t expect. applications of signal processing. i thought, you can really someone turns on that pulse oximeter, that thing is running it’s all about your heart.” improve biomedical signal processing – because it was really in my algorithms. isn’t that cool?” sales and engineering “debate” whether product is ready to ship Bob smith Walt Weber its infancy – if you remove noise from signals and give a vital sign that’s indicative of a noise-free type of environment. Bob smith “in the early 90’s, journal articles would often cite problems masimo’s first incarnation was vital signals Inc, or vsI Walt Weber > When Walt joined our company in the very early days, we had with pulse oximeter devices to include such items as patient > A great engineer with a heart of gold, Bob came to the company the technology of solving the pulse oximeter motion problem, but motion, low perfusion, ambient light as well as the effects of at a time when we didn’t know how to make a product. None of us implementation of it was unstable. The signal processing portion dyshemoglobins among others. We would use these papers as before him had ever built a product – we simply had ideas about had to be re-done. Walt figured out how to solve that problem a basis to create a list of items that we would find solutions to. how to make technologies better. Bob brought in unbelievably and that allowed us to jump forward with the development of the these were not treated as problems but rather opportunities great hardware design skills and created an environment for commercial product. He has continued to be an incredible and to improve and create new products. development of design, keeping track of the details that, at the honest mathematical sounding board for us ever since. end of the day, have continually helped our manufacturing people “i believe that, one of the keys to our success has been create every generation of our groundbreaking products. “i Joined maSimo on marcH 24, 1992. i had three engineering’s employee retention. everything that we have interviews over a few months. they were looking for somebody built is based on expertise that has been developed over time. “i Joined maSimo in June oF 1992. What i remember to do some signal processing. Mohamed gave me a demo of therefore, part of the team that developed our pulse oximetry about those early days was there was always a struggle to some of the stuff they were doing on a computer system called products was utilized to develop our rainbow® products. keep 10 people on the payroll. that was a magic number the comdisco, which kind of impressed me. i had another job and part of the team that developed our pulse oximetry and because if you dropped below 10, it was difficult to get offer, but i wanted to take the Masimo job because it’s what rainbow® products were utilized to develop our brain function health insurance for everybody. at the same time, we 32 32 33 didn’t have a whole lot of money. So we had to make sure the first Masimo SET® board to the market. SatShare,® the floor one night with Joe and Mohamed at about 10 PM – that everyone was contributing mightily to the company. Radical,® and continual innovations followed. He’s been invaluable. our normal going home time – talking about plans. our oeM there were no sales, no marketing, no FDa submissions. it prototype board, which was running at 4.5 watts at that was all about the engineering and trying to get something “i waS inTroduced To maSimo through Mohamed Diab time and cost us about $500, ran very hot, and was basically together that showed people what we had really did work and in 1995. at that time, there was more work than people. unusable. i told them that the board could be taken down to was important. it was all about pushing the commercially i worked with Walt Weber on developing and optimizing 100 milliwatts and cost under $100, and we made a goal. available electronics to the limit of what was possible, and algorithms for Spo2. applying it in new ways. it was all about pushing ourselves “but we didn’t try to go for that all at once. i developed a beyond what we thought we could do, and being part of “i came in as a software engineer, and was running the step plan so we could use each step as an improvement in something greater than the sum of the individuals.” engineering department after about a year and a half. technology. the first commercial board, MS-1, was 2.4 watts. ammar al-ali over the years, i went from Vice-President, to executive VP, the MS-3 was 1 watt. our MS-5 was 500mw, MS-7 was 250mw, to chief technical officer, and now i’m focused on technical and MS-11 was 125mw. Now we have the MS-2000 family, which work. i managed our group for 15 years, when Masimo was is 100mw, and the MS-2040, which is < 45mw. it took us 10 mostly engineers. We now have more than 120 engineers years to get there, but we got several useful boards out of it. > When Ammar arrived, we assigned him a huge challenge that in our irvine facility. i’ve hired a lot of people and we had not been able to conquer, which was how to make an i have a rule about it. i look for two properties: (1) high iQ; “Now our business is much more complex and there are optical simulator so that we could simulate in the engineering (2) good attitude. if someone has those two things, you so many products, it can feel like maybe we’re spread too lab very low signals to test out our perfusion capability. No one can do anything together. else had been able to do it. Ammar did it one day on his own thin. after many successful product introductions, many new technologies that make a difference in people’s lives, hours. Soon after, he became our head of engineering. Sharing “the biggest challenge i’ve faced during the time i’ve been a strong iP portfolio with 162 patents to my name, and Mohamed’s brilliance of inventiveness, he also had the discipline here was getting all Masimo efforts moving in a unified considering where we started from and where we are now, of system engineering and managed engineers to help us deliver direction, on a long-term plan. i remember sitting on the we’re doing extremely well.” 34 35 The Early Investors as told by abbas Bolandgray, ron nessim (for Jose nessim), Harish Patel, Bobby Yazdani, omid Kordestani, and robert Feibusch When Joe Kiani first proposed building an “impossible” pulse oximeter to mohamed diab, the idea of leaving a steady job was not too palatable to mohamed. the company mohamed worked for, however, was moving to colorado and mohamed loved southern california. so he told Joe if he could raise $75,000 he would work with him. Joe came up with $50,000 within two months, and mohamed gave five months’ notice to his employer. they named their company vital signals, Inc.; it was founded february 1989 when Joe Kiani had just turned 24 years old. By the summer of 1989, their first prototype was ready. all of this was possible due to some singularly visionary doctors and engineers. abbas Bolandgray “about a year ago, i met with Joe and thanked him for his vision, i bought shares, too, early on – 1990, 1991, 1992, 1993. and as hard work, and persistence and not only for helping others but happened with many Masimo investors from those early years, helping change my humble retirement to a comfortable level. the investments paid off very well.” > Dr. Bolandgray was our first investor, with a check for $5,000. A man who would always give his best advice to any young person who would sit and listen, he championed our company when it was only a “as a Farsi expression goes, i told him: ‘if you ever have some one-page idea to doctor friends who provided the bulk of the $80,000 in funds that launched us. shares and don’t know what to do with them and are going to Harish Patel Through him came Dr. Jose Nessim and then Dr. Jeremy Swan, both of whom lent us great credibility. donate them to charity, i know somebody who would like to have a He didn’t just put in his money – he called everyone that he knew who might help, and help they did. couple more. His name is abbas bolandgray and he prays for you.’” > As Joe Kiani’s friend and fellow field applications engineer before Masimo abbas Bolandgray “mY FamilY and i came from iran to the ‘land of opportunity’ – the united States – permanently in 1982. through mutual friends, i got to know a recently graduated iranian- american student, Joe Kiani. one day, he came to our house with one piece of paper in ron nessim (for Jose nessim) began, Harish knew about the idea for the company very early in planning stages. He initially helped by providing an introduction to three doctor friends who contributed $10,000 each to our initial $80,000. And all of them, though not related, shared the last name of Patel. Harish remained a his hand, telling me he was going to make a pulse oximeter. i knew he had a degree in > Given his initial skeptical views and negative advice he received great friend of the company, helping us with, among other things, including electronics, but he did not have much knowledge about medicine. Without hesitation, from a world-renowned doctor friend, Jose Nessim was a physician support from Analog Devices, whose DSP chip we use in our products. however, i gave him all the encouragement i could and told him he would make it without who seemed highly unlikely to become a Masimo advocate, much any doubt, particularly in the land of opportunity. less an investor. But he did both, and much more. Once he was sold “i FirST meT Joe in 1988 when we were both working as field on our technology, he became a tireless advisor and champion. At application engineers, me at PMi as a Staff Fae for the Southwest “then the critical question came up. He asked me if i could invest in this future company. a time when investors wanted 60% of the company for a very small region and Joe a Fae at bell industries, a distributor of PMi. We i gave it a great deal of thought, considering my position at the beginning of our migration investment and we decided to walk away, Dr. Nessim wrote a check hit it off the first time we met and became really good friends. (we had arrived below zero financially). i decided to invest very minimally with this young, for $134,000 that allowed us to continue. We are forever grateful. We worked together on many customer design opportunities reliable, intelligent person and told him that i could give him $5,000. in orange county. Joe’s technical strength, willingness to learn, “mY FaTHer, JoSe neSSim, met Joe Kiani and they really hit it enthusiasm, and great communications skills were highly “later on, while i was on-call at cedars-Sinai Medical center in los angeles, i discussed Joe’s off. Dad was a practicing ob/gyN. He really liked the Masimo pulse regarded by our customers and the PMi Southwest sales team. venture with a few colleagues and a couple of them invested $5,000. Dr. Jose Nessim wanted to oximeter and he really liked Joe, and we invested very early. My Jose nessim meet Joe, so i gave him Joe’s phone number. apparently, Dr. Nessim was a well-known gentlemen father introduced Joe to other people at cedars-Sinai, the main “about mid-1989, Joe had moved to anthem, another PMi distributor. and influential with people, and he invested $10,000 at first, and $130,000 subsequently. later hospital my Dad was affiliated with, and introduced him to Dr. We discussed medical and other market opportunities in a meeting, on, i invested another $5,000 for a friend who did not want to keep the investment, so i took it Jeremy Swan, a famous cardiologist who co-invented the Swan- and he said he would like to show me a product he and his friend and had $10,000 invested in the company, which gave me 20,000 shares. ganz heart catheter that revolutionized heart surgery. We have Mohamed had been working on that had great market potential. We a place in laguna beach where Joe would visit talking business. went over to Mohamed’s apartment to see their invention – the pulse “Many years passed and Masimo increased my number of shares three times. i divided the i also remember Joe coming to the house in beverly Hills and oximeter! this product was a 19-inch rack size Pc board. Mohamed 60,000 shares among my daughters and kept some for myself. More years passed and making a presentation as part of raising money early on. My dad and Joe gave me a demo. until then i did not really understand one day i received a letter from Masimo saying they were paying dividends. Here came was a bit of a risk taker who believed in people and new things, and how a pulse oximeter worked, or its life-saving benefits for patients $200,000. in another year’s time, $100,000. then another year, and $90,000. i was quite he would jump on innovative products if they hit him right. With resulting from accurate measurement of blood oxygen levels. i was surprised to count that amount of money! Masimo, that happened repeatedly; he invested several times. very impressed with the demo on the kitchen table. i asked Joe, what 36 Harish and Gita Patel 37 would be the next step. He mentioned finishing off some fixes, “i am very proud of Joe, and what he has accomplished, at such that i knew in Silicon Valley. i was based in San Francisco. that has gone into making Masimo what it is today. i think may confront in life, with a positive attitude and a winning refining it over the next few months, and finding investors so a young age. thank you, Joe and family, for your friendship. on i introduced Joe to Val Vaden, who brought major financial Joe has demonstrated that ultimately by having a vision, spirit. Joe Kiani and the story of Masimo embody all the the robert Feibusch they could launch, at which time he would leave anthem. Masimo’s 25th anniversary, i wish you even more success, health investment to Masimo. putting your energy and your hard work behind it, and traits that i talked proudly about that day. and happiness, and many more anniversaries in the future. Keep remaining a high integrity individual who always tries to > Bob had been a successful entrepreneur, sold his company for “over the next couple of weeks Joe asked me if i would be up your great work.” willing to invest. Regrettably, i could not, as my wife had just started a travel agency which had consumed my savings. but i approached some of my friends and sold the idea to three indian doctors. these friends asked to see the product and Bobby Yazdani “in addition to my involvement as a small investor, and in making introductions to Joe, one summer i went to orange county and helped Joe and Mo with some of the software that they were trying to write for their system. these were very, very early versions of Masimo Set. Mohamed had a two- do the right thing for other people, you can do very well.” “i had the pleasure of being a small contributor to Masimo’s $100 million, and then set up a small investment group with a omid Kordestani success through a chance introduction from a close friend friend of his who had been his board member. When an associate of mine who i went to school with from first grade in iran. made him aware of Masimo, Bob not only invested an initial bobby yazdani was an advisor and friend of Joe. in the $500,000, he became a mentor to Joe. Bob and his partner early days of Masimo, bobby invited me to make a small spent a lot of time providing advice any time Joe needed to visit meet Joe. So there was another demo on Mohamed’s kitchen > Shortly after Masimo began, Bobby, a very good software bedroom apartment, and one of the bedrooms was his lab. > Introduced to us by Bobby Yazdani (who was a childhood investment in the company and become a friend of Joe and them. They helped 26 year-old Joe in thinking through company table. after a little more convincing, the doctors decided to developer, brought object-oriented software development into i had a software background, so i tried to share some of my friend), Omid brought a savvy aspect to our company in the way Masimo and the journey they were about to embark on. planning, and even helped out in meetings with OEM customers. invest $10K each. both Joe and Mo were ecstatic. So was Masimo so that we didn’t create spaghetti code. He would experience in terms of production quality software. i advised of advice, along with his own investment. He had been involved at the time, i was busy growing this small startup called i, as these doctors providing the money were very tough fly down from the San Francisco Bay Area on weekends and them on software practices for their devices. in several high-flying startups that failed, but those failures didn’t google that i had joined as its first business executive “i belieVe we were THe FirST non-private financial investor customers and they asked a lot of searching questions! brainstorm with us about software. He introduced us to a big faze him, he would go on to become the first business person and employee number 11! i had invited my friend bobby to in Masimo. at the time i met Joe, we were active investors. angel investor that invested initially half a million and then “Since that time, Joe has been a great friend and he hired by a new company called Google. Omid offered to help any make an investment in google and he invited me to do the Val Vaden was working at our company and introduced us “in January 1990, Joe called and mentioned he had left later another half million. Bobby helped us bridge between supported me with my company, Saba, when i founded it and way he could, and described Joe as the epitome of what a CEO same in Masimo. the relationship evolved from there and to Joe and Mohamed through a mutual friend. i remember anthem, and that he and Mo had founded VSi (Vital Signals the small family friend investors to venture capitalists. when we took it public. He helped me as a board member of should be like. He pushed Masimo to major investors. i introduced my Stanford business School classmate Val very clearly our first meeting with them. they put their first inc.). He also had secured some office space and a couple That changed the paradigm. my company and gave me a lot of advice as i was developing Vaden, who was a successful investor and Vc, to Masimo. prototype on my finger to demonstrate how it worked. Well, of engineers, bob Smith being one of them. initially, i had Saba and also through its growth years. He helped me “aT a commencemenT SpeecH at my undergraduate Val in turn invested in Masimo at a critical time in Masimo’s it didn’t! During the test Joe couldn’t even get a signal and i reservations about Joe’s very aggressive timeline for going to “i waS inTroduced to Joe Kiani through a common build my business. Joe is a high integrity guy, and he’s very school, i had the privilege of imparting some of my life evoluation.... and the rest is history! thought he was going to panic. then he said to Val, ‘Well of production with the first pulse oximeter due to various FDa family member, and Joe told me what he was trying to humble. Nothing gets to his head, and he’s no different lessons to the graduating class of 2007 at San Jose State course it couldn’t work. bob is obviously a regular venture requirements. Still, i had a strong hunch that Joe with his accomplish. at that time i was a new software engineer at than he was 20-some years ago. the industry really hasn’t university. the key theme of my talk was the ‘immigrant “great individuals with a heart of gold, a great smile, and capitalist; he has no heart.’ We all cracked up, and to my vision, optimism, drive to succeed, and his trust in the people oracle. and i got very interested in the project – i got very changed him much, in terms of his empathy for people. attitude’ and how i believe it can be a key ingredient for winning immigrant attitude like Joe Kiani, make the world great pleasure, i invested anyway. years later, i told Joe that he worked with would allow him to lead a successful company interested in the space. i was an early investor and i tried i think of Joe’s vision of how ultimately technology can success for everyone. i talked about the singular focus to a better place! i am proud and honored to have a small i decided i had to invest in him. it’s how you overcome those that would be a leader and envy of the medical field. to put Joe and his vision in front of some of the people evolve this category of life science. it’s a lot of hard work succeed and breaking through any and all barriers that one part in their success.” obstacles and deal with them that matters most.” manizheh Kiani Bobby yazdani mohamed diab 38 38 Pre-thanksgiving lunch catered by manizheh Kiani, Joe’s mother omid Kordestani 39 39 Early Advocates as told by the late Jeremy swan, steve Barker, Mitchell Goldstein, Peter cox, and augusto sola starting with a relatively small amount of financing, and no marketing department, the creation of masimo was a continuous uphill climb. When they invented set® – signal extraction Pulse oximetry technology – in 1989, they managed to separate the arterial signal from the non-arterial noise (e.g. venous blood movement during motion). this gave the company the first and only pulse oximetry technology scientifically and clinically proven to be accurate during challenging conditions of patient motion and low perfusion. Great news, but how do you sell a pulse oximeter in a market dominated by one company? simple – you get the thought leaders in medicine to review it, hoping that you can prove you’ve built a much better technology as promised. that approach takes courage because bad results from respected medical authorities can result in the demise of a fledgling company with limited assets. approaching the problem fearlessly, Joe Kiani and his team sought out tough but highly respected experts to study and test masimo products. speaking to the true quality of their innovative technology, masimo won the day and in some cases, saved precious young lives. Jeremy swan steve Barker “Sometimes the truth hurts, but it’s the best course. i was an expert witness in the first Nellcor patent-infringement trial. i was on the witness stand being cross-examined by the Nellcor attorney. i had > H.J.C. “Jeremy” Swan (June 1, 1922 – February 7, 2005) was an Irish cardiologist who was > Dr. Barker had done more studies on pulse oximetry than anyone been talking about how in our clinical study we found that Nellcor a president of the American College of Cardiology, and Chairman Emeritus of Cedars-Sinai when he came to our attention. He always published the truth. In pulse oximeters failed quite often during motion. the guy said, ‘Well Medical Center’s Division of Cardiology. fact, his study on the first company that made reflectance pulse tell me, isn’t the Nellcor pulse oximeter correct some of the time?’ oximetry showed its limitations and put that company out of Without hesitating, i replied, ‘yes, and a broken clock is right twice a As the co-inventor of the Swan-Ganz catheter, Dr. Swan was a rock star among doctors. business. That’s when we knew he was the clinician-researcher that day.’ i could hear the titters from the jury. dr. steve Barker When no one knew who Masimo was, his presence made everyone pay attention. With we wanted to have studying our pulse oximetry technology. When Dr. Swan’s encouragement, Masimo developed Halo Index,™ which provides a cumulative Joe walked him through how Discrete Saturation Transform worked, “When i met Joe he was just a kid, about 23 or 24. i sometimes trending assessment of the global patient status. Dr. Swan was the founding Chairman of because he’s an engineer as well as a doctor, he loved it. He never think of him as an adopted son; he’s about the same age as my our Scientific Advisory Board and was invaluable to Masimo’s evolution. asked for any money for any study he did. If it weren’t for Steve oldest child. He called me when he and his partner were starting Barker, clinical people might never have believed in us. Now we’re this new company, called Masi-something. i had published a When our company was no more than two young engineers in a garage, Dr. Swan very proud to say he’s the chairman of our Scientific Advisory Board. number of pulse oximetry papers and consulted with companies generously gave his time and moral support. As the founding Chairman of our Scientific like Datascope, Novametrix, and even Nellcor. i believed in his Advisory Board, he made our goals very clear when he urged us to: “deliver the highest “i conSulTed once For a STarT-up companY called Sentinel. product early on and helped with studies. i watched the company fidelity signal possible and let the clinicians decide on how to use the newly available they were the first company that commercially marketed grow from the startup in Joe’s apartment to what it is today. information.” From that time forward, we did just that. reflectance pulse oximetry, with a sticky pulse oximeter probe through it all, he has kept that wonderful, child-like curiosity He lived a long and productive life, and was a friend we hated to lose. Dr. Swan made great rather than transmitted light. i did some work with them, curiosity and the desire to always make things better – that’s medical contributions and triggered other developments that helped mankind. It was including a small clinical trial, and i finally said, ‘look, i have to what has made Masimo different. they’re always exploring new wonderful for us all to have lived in a time that Dr. Swan was among us. be honest with you guys. it doesn’t really work, and here’s why.’ technologies. they’re constantly looking at new stuff and when that you slapped on the forehead. it measured reflected light about him, which i often tell him, don’t ever lose. that constant “conventional pulse oximeters are a fair-weather friend. Masimo Set® is a foul-weather friend.” Jeremy Swan, md Former chairman of Masimo’s Scientific advisory board and chairman, emeritus cedars-Sinai Medical center’s Division of cardiology it had a very high failure rate due to venous pulsation in the i give him my own ideas – and i come up with a lot of hare- forehead with a patient in the supine or trendelenburg position. brained ideas – they always listen and some of them actually get they were very nice people, but i published a study that basically developed. For example, i was pushing Masimo for years to look put their company out of business. So, when Joe Kiani came to into multi-wavelength pulse oximetry. Now they have become me for advice, he knew that just because i like the people that the pioneers and dominating force in that whole market. they’re have asked me to do a study, it didn’t mean i would change my the only company today that makes a multi-wavelength pulse standards. in fact, years later, he told me that is exactly the oximeter that can not only measure carboxyhemoglobin and reason he came to me. i had proven that i would be scientifically methemoglobin but now it can even measure total hemoglobin. honest. When i did my first study, i couldn’t believe the results, so i wanted to find out why it worked. When Joe explained the “i often remind Joe that Masimo is the embodiment of the technology, i said, ‘that’s incredible, why didn’t i think of that?’ american Dream, and i kid him about it, too. but his story truly is dr. Jeremy swan and Joe Kiani 40 Party for shipment of first masimo set® board 41 dr. mitchell Goldstein dr. augusto sola the american Dream. He started with new ideas and brains, skill ‘i have this new oximeter that we’ve been trialing. it is not FDa- at that time. there was: ohmeda; Nellcor; and HP (the bedside ucla and division director at cedars-Sinai. When i arrived there in and a lot of determination, and then guided it forward to where it approved. We’ve been using it to read saturations at times when monitoring system we were using), which eventually was acquired 1997, i was interested in improving neonatal outcomes based on data is today – a thriving, leading company with a bright future ahead.” we wouldn’t otherwise be able to get a reading.’ the dad consented by Philips. None of these companies would agree to include the and implementation of actions into clinical practice. When reviewing Mitchell Goldstein moments, i had a saturation that improved from initially 10-15% as our patients needed a robust, read through-motion system that available data could not be accurate. So i started to look deeper into we continued our therapy. if we hadn’t had that oximeter, we would was able to accurately measure saturations below 95% (we deal that area, while building a new Nicu and asking for newer equipment. for the baby to be on study. this was Masimo technology. Within Masimo technology. it was clear to us in the pediatric world that data i was struck by several issues, one of them being RoP. the have stopped. this baby was Joshua Diaz, the first life saved with with a large congenital heart disease population). and, through dr. Peter cox testing masimo pulse oximeter while breathing nitrogen > When Joe gave Dr. Goldstein a demo of our pulse oximeter, he was Masimo technology. in addition to being featured in the New york testing in our own institution, Masimo was the only one that met “at that time, i read two abstracts of pulse oximetry technology, so impressed by its ability to read through motion, he called every times article, Joshua was invited to the Society of critical care those criteria. to get Masimo technology, we had to change the one by Dr. Steven barker. all of the technology existing then had a doctor and nurse in the hospital to come see it, and they were all just Medicine meeting to see Joe receive the technology excellence patient monitoring company we used. i believe we were one of the lot of false alarms and nurses were very frequently turning them 10th anniversary party blown away by it. One day, he called about saving baby Joshua Diaz’s award, the same technology that saved his life. Without Masimo, first institutions to implement standardized monitoring across off. i read these abstracts, and i started to contact people. With life and that story became the lead in the New York Times exposé on Joshua would have been dead before he was even a month old.” the institution. We adopted Masimo technology hospital-wide and some difficulty i was able to get the Masimo technology into that Group Purchasing Organizations. Mitch testified at the Senate hearing about GPOs despite pressures that he not, and has always been one of our greatest friends. Peter cox “in 1995, i waS on call when i heard from the emergency room. > After a completely unnecessary death due to poor monitoring at we’ve been satisfied with our choice ever since.” hospital, and we also changed the clinical protocols using Spo2 augusto sola from the minute after birth. “after two or three years, we published the first prospective paper on Spo2 targeting, which was a breakthrough. We showed for i was told, ‘We’ve got a baby here who doesn’t look so great, and Toronto’s Hospital for Sick Children in the mid-1990s, Dr. Cox and > Joe met Dr. Sola for the first time after he read the The New York Times the first time that with the breakthrough accuracy of Set pulse we’d like to send him up to you in the Nicu.’ i was told he was a a hospital team searched everywhere for the most reliable pulse article on the GPOs that came out in 2002. He had a hypothesis that the oximetry even during motion and with good protocols, many few weeks old, was breathing kind of hard, and he looked kind of oximetry and contacted Masimo. He tested the equipment personally, high levels of oxygen given to premature babies and the back and forth more babies with birth weight under 1,500 grams could go home blue. Five minutes later, he was there in the Nicu, and he looked fought to replace the hospital’s Philips equipment with GE who had jockeying of levels was contributing to retinopathy of prematurity (ROP). without severe retinopathy, and they and their families could lead in extremis. We started doing everything we could. We placed a integrated Masimo SET® (they’d been with Philips for 30 years), He was right. To test his hypothesis, he needed a pulse oximeter that normal lives without the emotional and economic burden of a breathing tube with no response. We had the baby on an N200 completed the first installation of continuous Masimo monitoring on was accurate even during motion and low perfuison. Masimo, of course, life with blindness. that was a lifesaver. but this was not only an pulse oximeter that could not obtain a signal. the baby was not any general floor, and has been a huge advocate ever since. was it. He fought to get Masimo pulse oximetry into use at the Neonatal individual issue for babies and families. it was also a large societal moving. We had an electrical tracing of the heart rate, but the Intensive Care Unit (NICU) and lost his job over it. Eventually, he won the contribution made by the then new Masimo technology leading nurses and the respiratory therapist thought it was obvious that “an inQueST in 1999 set our team at the Hospital for Sick war, his ground-breaking study proved that proper titration of oxygen to a significant decrease in health care costs related to the care of the baby was going to die. they asked me to stop. We sent off a children, toronto, canada on a plan to monitor every bedside in using Masimo’s pulse oximetry can reduce ROP dramatically, and Dr. Sola’s blinded individuals for life. blood gas but the lab was a half an hour prospect because it was the hospital. i first met Joe Kiani in 1999, and then again a couple work has saved thousands of babies from blindness. downstairs in the basement. a respiratory therapist had to come of times in 2000. We were searching for an integrated monitoring “according to lao tse, gratitude is the memory of the heart. it is get the blood, go downstairs, run the tests, and then run it back system that was both centralized and could be spread out through “wHen i waS a clinical direcTor at the university of california with heartfelt memory that i thank and congratulate everyone who to us so that we could confirm the reading. So i told the parents, the institution. there were a number of monitors on the market San Francisco, i was offered the position of Professor of Pediatrics at made that advancement possible.” reception desk at madero office 42 42 43 43 The Venture Capitalists as told by Jack lasersohn, robert coleman, Jonathan osgood, Jim scopa, and lawrence saper When masimo set® technology was first perfected, Joe, mohamed, and the team naturally wanted to get the technology in use for patients asaP. they calculated that to do that, they should license their invention to market leader nellcor or another company. they also discussed creating a standalone device, but other ideas came from the first major investors, who came to masimo by way of silicon valley. the route to robert feibusch, Jack lasersohn, and other venture capitalists over the years turned a small path into a medical technology super company. one investor wanted Joe and mohamed to merely create ideas and license them. others wanted to replace Joe as ceo – the reasoning being that almost no one was good at both innovating new products and running a company, too. the investors who lasted and profited the most, however, saw kindred spirits in Joe Kiani and mohamed diab, people who like themselves were willing to risk it all to make a major difference in the quality of life and health in the world. Jack lasersohn robert coleman loses its innovative energy and momentum. i think that is the silent battle. When all is said and done, Masimo’s biggest victory may actually be its constant stream of innovation. and then, there > Jack came to us as a co-investor with Warburg Pincus in the mid-1990s. He was one of the > A born entrepreneur, Bob had been CEO of another company, sold it, are the unstated scenarios of having management leadership – smartest people who had ever come in contact with Masimo. At one point, he led a charge and became very wealthy. He was asked to join the Masimo board at specifically, Joe – that manages to stay ahead of all the growth to take over the company but once he had a change of heart, he became one of the biggest a time when the board kept second-guessing everything Joe was doing. challenges. Masimo has done that.” contributors to the board and a great company friend. When we were having a tough time with Bob had so much credibility he was able to convince other members the patent litigation, he spent many days helping us strategize and has been offering great of the board to let Joe run the company as he saw fit. When Warburg advice for decades. Pincus tried to take over, Bob found the way out of that. With great comprehensive advice for years, he has always been a wonderful support. Jonathan osgood oem adopters of masimo technology “our companY THe VerTical group is one of the leading medical device venture > Jon Osgood had a huge brand name as an analyst in the days of capitalists. there’s a myth that Vcs make financing decisions on the basis of personalities, “in 1996 edward caHill, who has now been a fellow Masimo our initial attempt at going public in 1996. When market situations the people running things. While it is true that we always try to get the best management board member for 15 years, told me he had received a copy of a proved to be less than fruitful for an initial public offering, he led us team, it’s actually a myth that venture capitalists make personalities the #1 item. the fundraising document from Joe Kiani. He asked me if i would mind into private deals that helped us raise tens of millions, crucial dollars important factor is usually the strength of the technological idea. the reason for the myth traveling to california to meet with Joe and advise him on the to help us go from an R&D company to a fully commercial one. He was is that usually most of the people who start companies are not the people who are going to merits of a Masimo investment. i had just completed 21 years as always a staunch supporter, and much appreciated. be able to run them when they get larger. and the reality is that the management is often a medical device ceo at the time, and i had just sold a company changed from the first time you make an investment in the company to the time it goes called MediSense to abbott laboratories. Joe and i formed a “wHen i waS inTroduced, i was head of the Healthcare from a few people to be 50 to 100 people. relationship and in 1997, i joined the board. i’ve been a member Research group at alex. brown & Sons, inc., and i was also the ever since. before Masimo became public, Joe and i went off to research analyst responsible for the medical technology industry. “in my career, i have usually had the greatest success with companies with a great a trade show event in Hawaii. We were sitting at a shrimp shack My partner in alex. brown’s investment banking division, Donald technological idea that’s been well executed. there have only been two exceptions to getting lunch at a rustic place in oahu. Joe looked at me and said, Notman, had discovered Masimo and Joe Kiani and thought it was that rule, where i have invested even when i did not think the business was a great idea, ‘bob, what’s it going to be like to run a public company?’ a promising company. Masimo was looking to raise a private round but where i thought the entrepreneur was so extraordinary that i wanted to back him no of financing and wanted alex. brown to act as agent. but for alex. robert coleman and Joe Kiani matter what. Masimo was one of those cases. When i met Joe Kiani and Mohamed Diab, i “i said, ‘Joe, i have just recently finished a tour of doing that myself. brown to sign on, both investment banking and research had to thought that this was one of the most extraordinary entrepreneurial teams of my career. First of all, i would rather own the shrimp shack, broken down picnic agree to do the deal, and that required customary due diligence their business idea, however, was to try to solve an almost impossible technological tables, and some chickens scratching on the ground underneath and meeting the company. Joe and the company left an indelible problem and then compete head to head with a monopolist – Nellcor – and i thought that the tables. and the second thing i have to tell you, as ceo of a impression with me. was really a terrible business plan. i told Joe, ‘i really hate this idea. i wish i could convince public company, is you’d better start thinking about what it might you to do something more reasonable, but i’m going to back you anyway because i think feel like to be the only fire hydrant in a town full of dogs.’ that said, “the only time that Joe and his team’s schedule aligned with mine you and Mohamed are two of the most talented young guys i’ve met in my life.’ that’s the biggest hurdle that an emerging company has to overcome is was an evening in chicago. i was flying in from a week in europe, how i came to invest in Masimo. Sometimes you just need to have guts and go with your what i call the one trick Pony Syndrome. that is when you have and Joe was flying from Southern california. i arrived on time in instincts about people. obviously, that bet paid off.” your bright ideas, you get a company going, and then the company the evening, but i soon learned that Joe’s flight was delayed. and 44 technician at Hospital for sick children in toronto, canada 45 the delay kept getting longer. at about 7:00 PM chicago time Joe’s flight had still not taken off from orange county, and i called Joe Jim scopa to tell him that we should postpone. it was the equivalent of about “We made another attempt in 2001 to get the company public, “mY companY, Datascope, had the objective of having a comprehensive but it just wasn’t to be. the market went south on us again, as physiological monitoring apparatus. the variable of pulse oximetry, lawrence saper part of the dotcom bust. by the time Masimo went public in measuring a concentration of oxygen in a patient’s blood, was an essential 1:00 aM for me, having just been in europe. i was tired, and i was > Jim Scopa was the banker whose involvement with Masimo blended 2007, i had already changed careers and come to MPM capital component in making up a complete physiological profile. at some sure Joe would rather just go home and reschedule. but Joe, in that in beautifully with the advice we got from Jonathan Osgood. Jim to do venture capital. So when Masimo’s initial public offering point, we considered do we make it ourselves, or do we see what’s out calm, smooth voice, assured me that the time wasn’t a problem, that became a great friend and assisted us with great financial advice at ultimately happened, i felt like a proud father, but i wasn’t there there. i clearly wanted to see what was out there, and the best thing nothing was more important than this meeting, and that the pilot every step of the way. Eventually, he became a venture capitalist so we at the birth. Nevertheless, as everybody is aware, that iPo turned that we found was Masimo. i discovered that my motivation for had assured him that they would fly. couldn’t work with him as a banker any more, but the total support he out to be more than a 10X return for the investors we brought getting into business and the way i do business was very consistent gave us in every way possible will never be forgotten. in, and for some, an approximately 200X return, even before the with that of Joe Kiani. We both pretty much look at the world – the “i hung up, and went to bed, sure that he would never make it to legal settlement with tyco/Nellcor. So it was a happy day and well technology world, the business world – in the same way. chicago, or if so, we’d meet in the morning. about 2:00 aM i was jarred “wHile i waS aT the former alex. brown, we made a valiant worth the wait.” awake by a loud knocking on my hotel door. a thin, very young, dark- attempt to take Masimo public in June of 1996. the window haired guy stood at the door smiling at me. i thought it was someone closed before we could get there. given what happened in the from room service who had gotten the wrong room. but i soon realized market after that to early medical device company valuations, that i was standing face-to-face with Joe Kiani, who was there to have the company was probably better off private. even though we lawrence saper “i take a measure of a person depending on a number of elements. i get a picture of somebody: either i like them or am neutral or i dislike them. it’s rare that i dislike someone, but it’s also rare that i find someone who’s working for the same reasons as i do. and our meeting. i was incredulous, and a bit sour for being wakened at couldn’t get the company public, we immediately went into a > As founder and CEO of Datascope, Larry seemed angry at our first who talks straight, thinks straight, and has a sense of humor, celebrating one year on nasdaQ 2:00 in the morning. For the next three hours Joe talked passionately private placement process and generated $10 or $15 million. it meeting because he wished he had learned about Masimo sooner. which Joe Kiani has. We looked outside and discovered Joe’s pulse about Masimo, its technology, and his strategy for competing with was 11 years from the time that the company first attempted to He loved what we were doing. When none of the major OEMs in oximetry abstract, which was very good for us, so we made an oeM Nellcor. by the time he was finished, the sun was coming up and go public in 1996 to when it actually did in 2007. that is probably the U.S. were putting Masimo in their products due to GPO/Nellcor deal where we bought instrumentation from Joe’s company and he had me convinced that Masimo would be successful and worth a record. usually, such efforts die a natural death in that amount blockage, Larry put Masimo into his products and by promoting that incorporated it in various forms in our monitoring apparatus. later, backing. Joe’s persistence, passion, patience and salesmanship were all of time. and it was unclear how the company would best get to action, basically forced all other OEMs to sign up. Later, he made a Masimo had developed to a point where Joe needed capital, and we displayed at that meeting and in the hours that led up to it. i knew we market with its technology. Nevertheless, i would say we raised major investment in our company at a very crucial time, making him invested. it was unique for us because we never did that before or had a winner because i knew Joe would never give up, ever.” something like $50 million for the company privately over time. one of our favorite people, ever. since. We were never in the business of lending people money.” 46 46 forbes names masimo one of the best small public companies in america in 2011 47 47 Taking on the GPOs as told by seth Bloom, sen. Herb Kohl, and Walt Bogdanich By 2002, masimo was engaged in a legal battle with pulse oximetry industry leader nellcor. despite occasional breakthroughs like cook county Hospital in chicago, that the famed er tv show was about which completed a system-wide conversion to masimo set®, the company was in essence shut out of 95% of american hospitals due to the monopolistic practices of dominant companies like nellcor with Group Purchasing organizations who got paid by them. When nellcor not only manipulated GPos to keep masimo out of the u.s. hospitals, but also attempted to co-opt masimo technology, there was no choice but legal action. to break up the group purchasing organization oppression of small innovative companies trying to break in with better technology, government intervention was necessary. that came about via a senate panel chaired by sen. Herb Kohl of Wisconsin and sen. mike deWine of ohio, bolstered by a series of new york times articles, the first one tiitled “medIcIne’s mIddlemen; Questions raised of conflicts at 2 Hospital Buying Groups.” that piece began with the story of how baby Joshua diaz was saved in the hospital as a newborn due to use of a masimo monitor. Walt Bogdanich, the times reporter, wrote about Joe Kiani, “he still cannot sell his oximeter, regardless of the price, to many american hospitals, even though medical experts say it helps the most fragile of patients – premature infants.” the articles were devastating indictments of the GPo payoff schemes and monopolies, and after reviewing the situation and hearing voluminous testimony, sen. Kohl’s committee drafted legislation and persuaded the offending GPos to voluntarily change their ways. subsequently, masimo received its first contract with Premier (one of the two major GPos), and other med tech innovators soon found entrée to american hospitals to be much easier. > our cruSading HeroeS: Masimo had technology that was 30 to 100 times better than any other pulse oximeter available, yet we could not sell it to hospitals in the U.S. due to the GPO monopoly. So we concentrated on small NICUs and non-GPO based hospitals, which were few. Then we noticed that Medical Device Manufacturers Association (MDMA), a new group representing medical companies, publicly said there was a problem with this whole GPO setup. That led us to Seth Bloom, an aide to Senator Herb Kohl, who was conducting his own relentless investigation. MDMA told us we had to come to Washington to visit Sen. Kohl’s people, specifically Seth, a true idealist. Sen. Kohl was wealthy and didn’t need to raise money to become elected. He held hearings on the issue and thanks to him and Seth, we were able to sell our products in the U.S. and save countless lives and the eyesight of thousands of premature babies. We all owe Seth and Sen. Kohl copious thanks. When we contacted 60 Minutes about our issues, they gave us Walt Bogdanich’s name. Walt, while previously at ABC News, broke the controversial story about tobacco companies manipulating nicotine to make cigarettes more addictive. Walt said the story was so big he was willing to go to The New York Times with it. Since a 15 minute segment wouldn’t do it justice, he got an agreement from them to do a whole series on the GPOs if Joe was willing to step up and speak up, and he certainly did. About a year and a half after Joe assisted Walt on his investigation, the story was shelved in the wake of 9/11, but when the story finally launched in March 2002, it helped change the healthcare industry for the better. seth Bloom “THe group purcHaSing organizaTion iSSue and how innovative medical devices were being prevented from reaching patients first came to my attention at the end of December 2000. there was a meeting, i believe, sponsored by the Medical Device Manufacturers association. there was a group of maybe 10 or 15 people around the table in my office and i was in a sort of shock about the situation. it caught my attention in particular because it affected patient health and safety. i couldn’t imagine a more important competition issue. after having this meeting, i brought it up with Sen. Kohl, whom i worked for at the time, and who was the senior Democrat on the antitrust Subcommittee. i didn’t meet Joe Kiani until sometime in 2001. “When the New york times stories on gPos appeared in 2002, we were already planning our hearing where Joe testified, but the first times story definitely attracted Sen. Kohl’s attention. He was appalled by the kinds of things the paper was writing about. the Senator felt the most effective use of the bully pulpit of a congressional hearing was to get the gPos, and their trade association, to agree to change their ways voluntarily. Joe’s testimony was vitally important at the first hearing. “those testifying all told the same story – how the gPo system prevented crucial, in many cases potentially life-saving, devices from reaching patients and helped entrench the market positions of the large vendors. “this hearing led to the gPos establishing codes of conduct, which they did only after Sen. Kohl turned the spotlight on them and we threatened legislation to remedy the situation. among other things, the leading gPos and their trade association agreed to end some of their worse practices – for example, ethical abuses and conflicts of interests where gPo executives would have investments in companies that obtained gPo contracts. and many of gPo-negotiated contracts were five to seven years. the gPos agreed, for clinical preference products, to limit the length of the contract to three years, which obviously gives competitors a better shot at getting in. and they agreed to end exclusive, sole source and bundling contracts for medical devices. Sen. Kohl was very directly involved in negotiating with the two largest gPos to get them to use these voluntary codes of conduct. it was quite an achievement. We had our first hearing in 2002 in the spring. “by the summer of 2003, we had these agreements in place. So that was a major accomplishment of these hearings.” sen. Herb Kohl “i waS VerY impreSSed by Masimo and its ceo, Joe Kiani. in my view, Masimo was exactly the kind of company we wanted to encourage, an upstart company, founded by immigrants, taking on the industry’s incumbents with a better product. and this product was a basic medical device key to helping prevent blindness in premature babies. i was quite disturbed to learn that hospital gPos, acting at the behest of dominant suppliers, were effectively preventing Masimo’s devices from reaching physicians and patients. that patients – particularly premature babies – could be denied access to these critical devices was shocking to me. the experience of Masimo and other similarly situated medical device manufacturers led me to conclude that something had to be done to end the stranglehold on the market of the large incumbent suppliers resulting from the gPo system. he needed to obtain contracts. i don’t know whether we could have achieved the reforms to the gPo system that we got the gPos to agree to without Mr. Kiani’s testimony.” Walt Bogdanich “i HaVe a cloSe Friend who worked in the medical device arena and he had complained many times about the out- sized influence of group Purchase organizations. i always thought of gPos as inherently good. the story he told me painted a very different picture of them. “i recall that Mitchell goldstein, a physician from a Southern california hospital, offered compelling testimony at our first hearing in 2002 about being denied access to Masimo’s devices, and the dangers that posed to his patients, including premature infants. “our interest in the gPo system was to insure that patients received access to the best medical devices at the best prices. While we did not get involved in this issue to benefit any one company or group of companies – we were just acting to promote competition and help patients get access to needed medical devices – Joe Kiani’s testimony was crucial to our efforts. i recall how sincere he was in seeking reforms and how courageous he was in coming to testify. His testimony exposed the shortcomings of the gPo system, and yet he testified next to representatives of the very gPos from whom “i can recall with great clarity my first meeting with Joe Kiani. We were sitting and talking at a nice New york restaurant. For some reason, i remember the sun streaming in through the window. i had heard the outlines of Joe’s story, but i needed him to fill in the blanks. i also needed to assess his credibility in person. Needless to say, he passed with flying colors. “the gPo story was a difficult one to tell. and, to be absolutely honest, our editors did not immediately see the value in spending a great deal of time learning about the dark side of gPos. but we kept at it. We followed the money and it led us to an incredibly important series of discoveries. the result was a compelling series about the hidden hand of gPos in the marketplace. the best part of that series – hands down – was the opening anecdote which dealt with Joe’s product. Without that, i’m not sure anyone would have read beyond the first few paragraphs.” 48 seth Bloom senator Herb Kohl Walt Bogdanich 49 The Legal Warriors as told by Joe re and steve Jensen as 2004 began, the patent trial was on everyone’s mind, but despite advancing in the marketplace, masimo was $5,000,000 in debt to its law firm, Knobbe, martens, olson & Bear. attorney steve Jensen believed in the masimo mission and urged his partners to continue with the case, fearing that if the company did not win, it could literally mean a great many unnecessary deaths in the future. the Knobbe firm assembled a small army of personnel on a floor of a hotel in downtown los angeles. mohamed diab thought it looked like a war room, with an It specialist, computers everywhere, and steve Jensen writing the trial strategy like a field general. to reassure his clients, attorney Joe re told masimo that it had many legal “smoking guns” with which to go after nellcor and its parent company at the time, mallinckrodt, while in most trials of this kind, there was only one. this was a prescient comment. on friday, march 26, 2004, the 27-day trial was over and masimo won to the tune of $270 million overall, with a 14.8 percent royalty to be paid to masimo by nellcor each year for use of masimo technology. everyone at masimo was hugely relieved, but it was too early to celebrate; with appeals, it might be years to collect. through appeals and another trial, however, masimo persisted, and nellcor lost. a med tech david had brought down a med tech Goliath, and masimo showed the world that “right is might” and no just fight was impossible to win, if you had enough determination, persistence, and truth on your side. > our legal Team: As a lawyer, we think of Joe Re as bigger than life. He’s King Kong. He doesn’t leave anything behind. Together with Steve Jensen, they formed a simply unstoppable team. During our patent litigation, Steve was detail oriented, found all the facts, did all the discovery work, and came up with the legal strategy along with Joe. And when Joe Re went in front of that jury and displayed his mastery, our ultimate success was assured, no matter how much trepidation we had going in and during the trial. The patent trial victory was cleansing and healing, and the wonderful result was heavily dependent on Steve, who was literally tireless. He would work all night leading up to and during the weeks of the trial. At 4:00 or 5:00 in the morning he’d hand off the questions that Joe would ask the witnesses the next day. And then Steve would go take an hour nap, shower up and come back to court with us. He lost 30 pounds during that 4- to 5-week period, and he and Joe won us our life as a company. Joe re “wHaT an Honor it was for me and my partners at Knobbe to present the Masimo story to eight strangers, a jury. as each day passed during that six-week patent infringement trial, the contrast between Masimo and Nellcor became more and more evident. While Nellcor was struggling to preserve its market dominance, Masimo was fighting to introduce its Set® technology to improve healthcare for everyone. “as the truth prevailed, the jury easily saw the stark difference “i didn’t want to withdraw, and believed we would win the case. between the two companies, one focused on themselves, and i believed that patient care would forever suffer if Masimo’s “the trial revealed that Nellcor’s executives had been telling Joe Kiani that his dream of the other focused on the patient.” expanding pulse oximetry was unrealistic, that he should pursue something else, or maybe get some experience as a VP first. “When Masimo offered its technology for Nellcor to introduce, Nellcor’s pride got in steve Jensen technology did not make it to the market. and if we didn’t win this patent case, i didn’t believe Masimo’s revolutionary technology would ever make it to patients in a meaningful way because the much larger competitor was infringing its patents. the way. its executives could not stomach that two young engineers, Joe Kiani and “wHen THe nellcor paTenT lawSuiT was filed, Masimo was “For patients to benefit, Masimo needed to be able to protect Mohamed Diab, solved problems that had long plagued the pulse-oximetry industry. a very small company and not yet profitable. Nellcor had a large its innovations. and if i withdrew, i think that may have been Nellcor refused to agree to implement Masimo’s technology immediately because it legal team. Masimo did not have the funds to keep up and just the end of Masimo. wanted to keep Set®, which they referred to as that ‘killer app,’ on the shelf until its got further and further in debt to my law firm. at one point, the own sensor patents expired, regardless of how that plan would harm patients. guided debt owed to my firm was so significantly impacting the firm’s “the first bank wire Masimo received after we won was over by his self-determination and integrity, Joe had Masimo introduce its Set® technology financial situation that my partners wanted me to withdraw $300 million, and Masimo’s revolutionary technology began on its own. from the case. to be adopted rapidly.” Joe re steve Jensen 50 51 International Advocates as told by Katsuyuki Miyasaka, christian Poets, and atsuhiro sakamoto masimo’s international reach was expanded in february of 1998 with deals with datascope corp. and Invivo research. datascope put the company in front of a worldwide market when it agreed to integrate masimo set® into its monitors. But before that, Japanese companies, nec medical and atom, had agreed to introduce masimo to Japan, and a uK company, Kontron, agreed to do so in europe. this was quickly followed by Gs electromedical, a German company whose primary products were defibrillators and monitors used in emergency medical applications. Gunter stemple, President of Gs electromedical, called masimo technology a “quantum leap in performance and reliability,” which was quite a recommendation for the rest of the european market. With the Group Purchasing organization structure in the u.s. hindering market expansion for so long, masimo’s necessary outreach to international markets turned into a blessing long-term, and some special champions of our work made a big difference with their support, encouragement, and advice. Katsuyuki Miyasaka > Dr. Miyasaka was an anesthesiologist in the National Children’s Hospital in Japan. He did original studies for us in Japan when NEC was implementing Masimo SET® into their products. His data gave us a clue that eventually helped us figure out how to make a pulse oximeter that was good even on cyanotic patients. Even better, he pushed us to complete rainbow,® which was major, by telling Joe over dinner, “If you don’t do it, no one else will!” “mY inTereST in pulSe oximeTrY began over 30 years ago, particularly regarding its use in clinical settings for neonates, and in pediatric anesthesia and critical care. i was one of the first to promote the use of pulse oximetry in Japan through my involvement in conferences on oximetry use and publication of scientific and clinical papers from the late 1980s. My scientific and clinical association with Masimo started in 1993 when Mr. Joe Kiani visited Japan, from which time i became involved in Masimo pulse oximeter product development. clinical data from physicians in the field provided important feedback to Masimo and led to suggestions for product improvement. “there was little interest in pulse oximeter use at the beginning because in adult anesthesia the monitor always showed 100%, but the situation was quite different in pediatrics as patients were always labile and fragile. “My focus on such issues as the influence of venous pulsation on motion artifact during poor perfusion in pediatric patients and the use of clinical data analysis contributed to the improvement of Masimo Set® technology. the reduction of false alarms due to motion artifact was of utmost importance in establishing clinician acceptance of pulse oximetry. i believe its use in adult medicine was based in part upon its success in pediatric medicine. i find many other issues, such as the importance of noninvasive measurement of hemoglobin and dyshemoglobins, to be of great interest. “as a physician researcher specializing in pediatric anesthesia and critical care, i have been aware of the importance of pulse oximetry in pediatric anesthesia and Nicus and have tried to deepen understanding of the issues involved through clinical studies that provide information to the medical community, both in Japan and overseas. i look forward to further development of products by Masimo in the future.” christian Poets > Christian rolled up his sleeves, tested our product (when it was in a little blue box) on babies in his care, collected a lot of great data, and challenged us to make it better. He urged us to improve pulse rate algorithm, and we did. Because of his help, data, prodding, and then his publications, he showed our competitor’s product not only gave false readings but they also missed true alarms. None of this ever showed us as perfect but all of a sudden we were seen as much better than whatever was out there. these recordings (including the raw red-to-infrared data), which apparently helped the Masimo team a great deal to improve their software. i did this because i saw the potential: there was never any money involved. “i waS conTacTed in late 1993 by trevor Jones, a senior manager from a british Monitor company, Kontron (Watford, uK). they had supported us by designing a transcutaneous Po2 monitor for home use in infants (to notify parents of severe hypoxemia potentially leading to sudden infant death syndrome (SiDS)). We had chosen transcutaneous monitoring because pulse oximetry was nowhere near suitable as a home monitor at that time. trevor told me he had had contacts with a person called Joe Kiani, who had developed a new, motion resistant pulse oximeter, and asked whether i was interested in meeting this guy – which i certainly was, as i had never liked the idea of using transcutaneous oxygen monitors in the home environment, and was thus keen to meet somebody who promised he had solved its main problem, i.e., motion artifact! “Joe walked into my office a few weeks later, and was proud to present me his pulse oximeter. However, when i tested this device in our patients on the neonatal intensive care unit, i saw its potential, but in my opinion, there were still far too many false alarms due to motion. i told him that, and he asked me whether i would be willing to record saturation data in some really difficult infants on our Nicu (with a lot of motion, but also recurrent true hypoxemia), which i was. Masimo sent equipment, and i then started “What struck me already during our first encounter was Joe’s determination to really improve pulse oximetry, not just to make money. He was burning to make a potentially extremely helpful technology better, more user-friendly and reliable, and he could accept/respond to critique. i gave him a really hard time in 1993, when he was so proud about his new invention, and it was certainly not easy for him to swallow my rather blunt statement: ‘it’s better than what i have seen from your competitors, but not what i expect from a really good device.’ He did not ignore my critique, but took it as a challenge that ultimately helped Masimo to become better.” atsuhiro sakamoto > Dr. Sakamoto met Joe Kiani in Tokyo in 2007 and provided Joe with information about the style of Japanese medical practice and about the Japanese medical business. Dr. Sakamoto also helped study noninvasive hemoglobin and rainbow acoustic monitoring as the head of the Masimo Japan Working Group (MJWG) and has been instrumental in helping us better shape our products for assisting patients in Japan. “in Japan, since 2008, i have been a leader in reviewing over 1,000 clinical data on SpHb® while collaborating with 15+ key medical institutes. i organized an SpHb study group called MJWg with 35+ key teaching hospitals on the subject of SpHb. MJWg shares its clinical study data with those key teaching hospitals, and this collaboration has contributed to a greatly improved product. MJWg not only contributed to various clinical studies on SpHb, but also to the penetration of Masimo SpHb into the Japanese market. We consider this to be a great asset to the health of our country’s people. “i also have a strong interest in enhancing patient safety. For that purpose, i am working on a project for our hospital to improve patient respiratory management. i find Masimo RRa® and Spo2 greatly contributes to increasing patient safety at clinical sites. “our hospital resources, rather than being abundant, are limited. therefore, it is important for us to know how to manage patient safety in critical care and in the general ward with our limited number of medical staff. Just applying a monitor to a patient on the general ward is not enough. Vital signs should be monitored continuously and collected in real time and should be closely observed and analyzed at a central Station for the best patient care. “the greatest importance is how quickly our staff members grasp a patient’s medical condition and how quickly we can take necessary actions for a patient. i am assured that Masimo products with Spo2, RRa, Hb, and a central monitoring system maximizing our hospital laN network system are powerful tools for our medical staff to increase patient safety throughout our hospital.” 52 the Kianis with _____ and dr. Katsuyuki miyasaka dr. christian Poets Joe Kiani and dr. atsuhiro sakamoto 53 The Researchers masimo has been fortunate to build partnerships with some of the most renowned researchers in the world. these collaborations are based on the fundamental desire nitin Kumudchandra shah > Professor of Anesthesiology at Loma Linda University; Chief of Surgical ICU at Long Beach VAHS to improve patients’ lives more significantly. In recognition of these individuals dr. SHaH’S 1997 study was the first to show that Masimo Set® pulse oximetry had for their commitment to evidence-based research, and hence to the evolution higher sensitivity and specificity than competitive pulse oximetry during motion and of noninvasive monitoring technologies, we have provided highlights of their low perfusion conditions. Dr. Shah went on to complete several additional studies with individual contributions. similar results, including a 2010 study that showed Masimo Set® continued to have higher sensitivity and specificity than to the latest generation of competitive pulse oximetry. charles G. durbin > Professor of Anesthesiology and Surgery, University of Virginia Health System dr. durbin’S 2000 study in post-coronary artery bypass graft (cabg) surgery found that when comparing Masimo Set® vs. non-Masimo Set® pulse oximetry, icu clinicians weaned patients from their ventilator faster while administering fewer arterial blood gas draws. david drover > Associate Professor of Anesthesiology, Perioperative and Pain Medicine, Stanford University Medical Center dr. droVer’S 2002 study was the first to show that Sedline® brain function monitoring with Patient State index resulted in faster emergence and recovery from propofol- alfentanil-nitrous oxide anesthesia, compared to standard practice without brain function monitoring. William W. Hay, Jr. > Scientific Director of the Perinatal Research Center; Director, Neonatal Clinical Research Center; Scientific Director, Perinatal Research Center, University of Colorado, Denver; Professor of Pediatrics (Neonatology) in addiTion to Dr. Hay’s clinical research in early postnatal intravenous nutrition of the extremely low birth weight infant, he is a global expert in the research of neonatal applications of pulse oximetry in newborn infants. in 2002, Dr. Hay’s research showed significantly fewer false Spo2 and PR alarms when using Masimo Set® pulse oximetry versus conventional and new-generation pulse oximeters in the Nicu. Maxime cannesson > Associate Professor of Clinical Anesthesiology, University of California, Irvine, CA in 2008, Dr. cannesson was the first researcher to show that Masimo’s noninvasive pleth variability index (PVi®) was significantly better than traditional measures used to help clinicians assess fluid responsiveness in mechanically ventilated patients during general anaesthesia. after Dr. cannesson’s study, over ten studies have been published on PVi showing similar results as well as the impact of PVi on in addition, PVi has now been recommended in both France surgery was the first to show that using noninvasive and and the united Kingdom for use during surgery to perform continuous hemoglobin (SpHb) monitoring helped clinicians goal-directed fluid management. reduce the frequency of intraoperative red blood cell transfusions and the average units of blood transfused per patient. andreas H. taenzer > Associate Professor of Anesthesiology and Pediatrics, Director, Pediatric Acute Pain Service, Dartmouth-Hitchcock Medical Center; Director of the Dartmouth Patient Deterioration Prediction Laboratory (DP2L) dr. Taenzer’S 2010 study with Masimo Set® pulse oximetry and Patient SafetyNet™ was the first to show that pulse oximetry and remote monitoring could reduce rescue activations and icu transfers in post-surgical patients. after Dr. taenzer’s study, the anesthesia Patient Safety Foundation and Joint commission recommended that all patients on opiods be continuously monitored with pulse oximetry. Jesse ehrenfeld > Associate Professor of Anesthesiology, Surgery, and Biomedical Informatics; Director of the Anesthesiology & Perioperative Informatics Research Division; Director of the Center for Evidence-Based Anesthesia, Medical Director for Perioperative Quality Michael a.e. ramsay > Chairman, Department of Anesthesiology, Baylor University Medical Center; President, Baylor Research Institute dr. ramSaY’S 2013 study was the first to show that acoustic respiration rate (RRa) detected the cessation of breathing faster than traditional capnography, providing a well-tolerated solution for patients at risk of respiratory depression. dominik roth > Medical University of Vienna, Department of Emergency Medicine dr. roTH’S 2014 study showed that adding noninvasive carboxyhemoglobin (Spco®) assessment to the standard emergency department assessment revealed nearly twice as many more cases of carbon monoxide poisoning being detected than reported previously. co poisoning accounts for an estimated 50,000 eD visits in the u.S. annually. Dr. Roth’s study means that an additional 34,500 patients goal-directed fluid management decisions and patient risk. dr. eHrenFeld’S 2010 study in patients undergoing orthopedic may have carbon monoxide poisoning, but are undiagnosed. 54 dr. nitin Kumudchandra shah dr. charles d. durbin dr. david drover dr. William W. Hay, Jr. dr. maxime cannesson dr. andreas H. taenzer dr. Jesse ehrenfeld dr. michael a. e. ramsay dr. dominik roth 55 The Masimo Foundation as told by Jim Bergman the masimo foundation for ethics, Innovation and competition in Healthcare is a non-profit organization we formed to facilitate our corporate philanthropy. during the first quarter of 2010, we provided a monetary gift and an in-kind contribution of pulse oximetry equipment and supplies to support the foundation’s efforts. our $10 million gift to the foundation represented a portion of the multi-million dollar payment received in January 2010 from the antitrust victory against nellcor/tyco Healthcare. the foundation’s established purpose was to encourage and promote various activities, programs, and research opportunities designed to improve patient safety and deliver advanced healthcare to people worldwide that may not otherwise have access to lifesaving technologies. In addition, the foundation is meant to support third-party research, development initiatives, and clinical studies designed to expand the healthcare industry’s ability to provide better and more cost-effective solutions and protocols for healthcare delivery throughout the world. finally, the foundation is intended to provide special attention to those causes whose ultimate goals are ethical – focused on doing the right thing for the right reasons – and designed to create healthy competition, which masimo believes is the ultimate answer to lower health care costs in the u.s. and throughout the world. the masimo foundation is dedicated to improving patient care through philanthropic programs and research initiatives that foster an environment of robust and honest competition, and enhance caregiver access to cost-effective and innovative healthcare solutions. the masimo foundation is also a family affair with sarah, mrs. Joe Kiani, serving on the board. as we look back over the past quarter century and consider our struggles along the way, we feel particularly blessed to have made it this far because there were many times when the future seemed shaky, as the following story from a masimo foundation board member illustrates. Jim Bergman > When we walked away from our first venture capital deal, Jim Bergman’s firm was one of the a great idea and just managed to persevere basically through everything companies involved. Despite our departure, Jim came forward and said he and his firm really with the guts to keep trudging ahead, and they finally won. and i can’t say like us and wanted to invest. He felt that Masimo’s valuation was six times higher than investors there’s any better story that i can think of than that. offered less than a year before. He not only became our first real venture capital investor, he has always reminded us about fairness. He was our very first choice to be involved with the Masimo “For over 30 years, i was a general Partner of firms that provided capital Foundation, and is still onboard. and management assistance to emerging companies primarily in high technology, particularly those technologies associated with electronics, “rigHT aFTer we had raised several million dollars in a round of investment, a couple of communications, biotechnology and health care. i’ve served on the new people joined the board of Directors. this created a board of four outsiders and three boards of more than thirty-five companies, and i was a director of the insiders, and there were three outside people who wanted to bring in a new ceo. they National Venture capital association from 1985 to 1990. wanted to move Joe over to marketing manager or engineering manager. We had a vote, it was 4 to 3, and thank goodness, we didn’t do it. i mean, had i voted the other “but my real love is the charitable sector. i’ve been on the boards of way, Joe wouldn’t be the ceo. Micro Finance banks and organizations in africa and have served on numerous other church and charitable boards and committees. My “When we were battling Nellcor, normally, the little guy never can outlast the big guy, in wife and i have taken more than forty field trips to Developing World terms of spending money. We probably spent $15 million. For a company that was not countries with World Vision, church Resource Ministries, opportunity making much money, that was a lot of money to spend, but we somehow persevered. international, and other organizations. in my experience in venture capital, i don’t think i’ve ever seen or been aware of anyone winning that big a lawsuit when it was sort of David vs goliath. “because i love helping others, i feel perfectly at home being on the board of the Masimo Foundation, whose humanitarian outreach and “Masimo is the great story of the american dream, two hardworking young guys who went scope has been worldwide in its emphasis since the organization’s to San Diego State rather than Harvard or yale or even Stanford or ucla and came up with beginning. Here’s to another quarter century of success!” rescue medical team in Haiti using donated masimo technology the Kiani family at fundraiser for Juvenile diabetes research fund (Jdrf) with the mayor of Irvine, steven choi 56 57 The Patient Safety Movement as told by President William Jefferson clinton President William Jefferson clinton > In the summer of 2012, Joe Kiani spent over a week with President Clinton in Africa. It was part of a commitment Joe had made to help the President with his work for the Clinton Global Initiative (CGI). They became friends, and Joe told President Clinton something that was fascinating but horrifying – that three million people die worldwide every year from deaths that are preventable. More than 200,000 of those deaths occur in the U.S. The two agreed that the goal of healthcare in the new millennium should be more than simply providing people access to healthcare, but also advancing a healthcare system that assures patient safety and dignity. “i’ve been impressed by Joe’s commitment to end all deaths due to preventable medical circumstances. i believe that the goal of the Patient Safety Movement can be accomplished--and because it can it has to be done. “i know big goals can be achieved. Since 2005, members of the clinton global initiative, with their thousands of commitments to action, have had a positive impact on more than 400 million people in 180 countries. being a cgi member entails making a commitment and doing your best to keep it. the cgi staff works year round to help our members develop and keep their commitments. they draw upon each other’s strengths and create new partnerships to put their ideas into action. We call it ‘mobilizing for impact.’ “this is exactly what Joe Kiani has demonstrated in building Masimo, and in creating the Patient Safety Movement. on their 25th anniversary, i’d like to congratulate Joe and the people at Masimo for helping us achieve a healthier world, and commit to doing my part until the goal of zero preventable deaths becomes a reality.” Joe Kiani and President clinton 58 President clinton as keynote speaker at inaugural Patient safety summit President clinton in africa on tour 59 masimo team on 20-year anniversary In Memoriam It is never easy to say goodbye to a masimo team member, and doubly difficult when someone from the masimo family passes. thankfully, there have not been many such instances over the quarter century of our existence, but we would like to remember here some people who gave us great service and fond memories in their time with us all. Scott barnhouse Philip bonwell Jeffery Dempsey Jr. Patricia Jasion Joseph Mueller cynthia Nelson Sue Nevill Jennifer Nibarger ashley chuck Smith James Van Slochteren Sari Wheaton 60 61 SolViNg tHe uNSolVable 62 62 63 SigNal eXtRactioN tecHNology® twenty-five years ago, two young engineers asked why pulse oximetry wouldn’t work during patient motion and low perfusion. in doing so, they started a revolution in patient monitoring. oVercoming THe limiTaTionS oF pulse and normalizing the pulsating signal conVenTional pulSe oximeTrY over the non-pulsating signal, oxygen Pulse oximetry had always been unreliable saturation (Spo2) can be obtained. although when it was needed most – during patient this was a big step forward in pulse oximetry’s motion and low perfusion. the industry evolution, this core assumption has major considered the problem “unsolvable” and flaw – it assumes that the only pulsating clinicians were forced to live with the component is arterial blood. consequences – excessive false alarms, delayed notification due to long averaging unfortunately for conventional pulse times, inaccurate data, and an inability to oximetry, venous blood moves every time obtain data on the most critical patients. the patient moves or breathes. this causes Something had to change. conventional pulse oximeters to display false low or high Spo2 readings and pulse rates – conventional pulse oximetry works under causing false alarm rates as high as 90% in the assumption that by looking at only the icus and recovery rooms. conventional pulse oximetry uses the standard red over infrared algorithm to provide Spo2, while Masimo Set® uses that conventional algorithm but has added four other algorithms that all run in parallel. these algorithms allow the distinction between arterial and venous signal during motion and low perfusion by identifying and isolating the non-arterial and venous noise Spo2 (left peak shown in blue) from the true arterial Spo2 components (right peak shown in red) in the signal. the plot peak on the right is then chosen as the Spo2 value, since the physiologically higher Spo2 value within the measuring site will always be arterial signal. 64 65 65 unleaSHing breakTHrougH perFormance Joe Kiani and Mohamed Diab approached pulse oximetry from a completely different perspective. in doing so, they opened up a whole set of MSt™ – to separate the arterial signal from exciting new possibilities. Masimo Set® sources of noise (including the venous signal) acknowledges that both the arterial and to measure Spo2 and pulse rate accurately, venous blood can move and uses parallel signal even during the so-called challenging processing engines – DSt®, FSt®, SSt™, and conditions of motion and low perfusion. ValidaTed bY independenT and obJecTiVe reSearcH over 100 independent and objective studies have shown that Masimo Set® outperforms all other pulse oximetry technologies, providing clinicians with the sensitivity and specificity required to make critical patient care decisions. after six years of dedicated and focused thereafter, skeptical clinicians around the of Masimo Set® consistently resulted in detection was shown to be over 97% – research and development, Masimo Set® world sought actively to compare Masimo significantly fewer false alarms and improved even during motion and low perfusion.1 debuted in 1995 at the Society for technology Set® to pulse oximetry technologies offered detection of true alarms. With Masimo Set®, in anesthesia and won the prestigious by other companies. but in study after clinical studies have shown false alarms can excellence in technology innovation award. study, the breakthrough signal processing be reduced by over 95%, while true alarm 1 Shah N., Ragaswamy H.b., govindugari K., estanol l. J Clin Anesth. 2012 aug;24(5):385-91. miSSed True alarmS and SenSiTiViTY during cHallenging condiTionS FalSe alarm raTeS and SpeciFiciTY during cHallenging condiTionS mIssed true alarms // sensItIvIty f alse alarms // sPecIfIcIty 43% 3% In this hospital-based study, investigators measured spo2 in 10 subjects during motion and low perfusion conditions and calculated the false alarm rate during 120 full oxygenation events (specificity) and true alarm rates during 40 de-oxygenated events (sensitivity).1 97% 28% 5% nellcor n-600 masimo SeT® Sensitivity nellcor n-600 masimo SeT® In this hospital-based study, investigators measured spo2 in 10 subjects during motion and low perfusion conditions and calculated the false alarm rate during 120 full oxygenation events (specificity) and true alarm rates during 40 de-oxygenated events (sensitivity).1 95% Specificity 66 66 67 67 induSTrY-leading pulSe oximeTrY SoluTion Masimo Set® is the world’s leading pulse oximetry technology, demonstrated by both independent and objective research and the real-world success of our customers and partners. THe cHoice oF clinicianS in THe timelier detection of true events, clinicians world’S leading HoSpiTalS can intervene earlier for better patient because of its unmatched reliability during outcomes and improved patient safety.1 challenging conditions of motion and low perfusion,1 clinicians at thousands of hospitals inTegraTed in more induSTrY-leading around the world count on Masimo Set® every producTS THan anY oTHer pulSe day to help them care for patients. and while oximeTrY TecHnologY many leading hospitals have already integrated Masimo Set® is integrated in more industry- Masimo Set®, more are converting every day. leading multiparameter monitors than any other pulse oximetry technology – more leading hospitals and clinicians choose than 100 monitors from 50 leading brands. Masimo Set® to help them deliver effective in many of these monitors, Masimo Set® is and efficient patient care. With fewer false the only pulse oximetry technology offered. alarms,2 clinicians can focus on the patients in addition, more and more of our original who need the most attention. With more equipment manufacturer (oeM) partners are accurate measurements,1 clinicians can more enhancing the capabilities of their monitoring tightly control oxygenation levels. and with solutions by integrating our rainbow® technology. 1 Shah N et al. J Clin Anesth. 2012 aug;24(5):385-91. 2 barker SJ. Anesth Analg. 2002 oct;95(4):967-72. leading hospitals and clinicians choose Masimo Set® to help them deliver effective and efficient patient care. Physio-control® with rainbow® ZOll® with rainbow® masimo set® is integrated in more industry-leading products than any other pulse oximetry technology Ge® with Masimo seT®, rainbow® integration underway Ms-2040™ Very low power seT® OeM Board dräger® with rainbow® perFormance during moTion and low perFuSion True Alarm Detection – Sensitivity (%) 100 90 80 70 60 50 40 30 20 10 0 Masimo SET® Philips 24C Philips CMS-B Datex-Ohmeda 3740 Nellcor N-395 Datex-Ohmeda AS-3 Datex-Ohmeda 3800 Datex-Ohmeda 3900 Nellcor N-200 Philips CMS Nellcor N-295 GE 8000 Novametrix MARS Nellcor NPB-190 Nellcor NPB-180 Novametrix 520A Spacelabs 90308 Nonin 8600 BCI 3304 Criticare 5040 0 10 20 30 40 50 60 70 80 90 100 False Alarm Rate – 100 - Specificity (%) a total of 70 volunteers were tested with motorized hand motions. each motion was studied during both room air breathing and hypoxemia. Pulse oximeters on the stationary hand were used to provide control measurements for comparison. sensitivity was defined as ability to detect a true spo2 <90%. specificity was defined as the ability to detect a true spo2 >90%.2 “masimo set® is advantageous because even though it significantly reduces false alarms, it doesn’t do that by ignoring physiological changes.” Philips® with Masimo seT®, rainbow® integration underway Ms-2013™ low power seT® OeM Board Mx-5™ low power rainbow® OeM Board Welch allyn® with rainbow® christian poets, md director, neonatal Intensive care medical school, Hanover, Germany 68 69 69 Helping clinicianS Screen For criTical congeniTal HearT diSeaSe and preSerVe babieS’ eYeSigHT From the very beginning, infants and children have been at the heart of our research and development. as a result, Masimo leads the industry in solutions designed exclusively for these most vulnerable patients. enabling newborn Screening For criTical congeniTal HearT diSeaSe (ccHD),1,2 spurring the uS Secretary of Health and Human Services to add “motion-tolerant” pulse oximetry to the the breakthrough performance of Masimo Set® is often most Recommended uniform Screening Panel for newborns.3 Masimo appreciated by clinicians caring for fragile newborns. up to Set® pulse oximeters and sensors meet the recommended 30% of all congenital heart disease (cHD) deaths occurring in criteria for newborn screening, were exclusively used in the two the first year of life are unrecognized at post-natal discharge. studies that were the basis for the ccHD workgroup decision to Helping clinicianS reduce reTinopaTHY oF premaTuriTY beTTer care For cYanoTic paTienTS opTimal newborn reSuSciTaTion in cyanotic infants, Masimo Set® with the blue Sensor every second matters during newborn resuscitation. Masimo Set® pulse oximetry has been shown to reliably assist recommend newborn screening, and were the first to receive Premature infants requiring neonatal intensive care need is the only pulse oximeter shown to enable accurate the Masimo Newborn Sensor ensures the fastest response clinicians in screening for critical congenital heart disease FDa 510(k) clearance with labeling for ccHD screening. enough oxygen to preserve vital organ function, but too maintenance of targeted oxygen saturation levels.5 and for time with maximum sensitivity – allowing clinicians to focus on 1 ewer aK et al. Lancet. 2011 aug 27;378(9793):785-94. 2 de-Wahl granelli aD et al. BMJ. 2009;338. 3 Secretary of Health & Human Services letter to the Secretary’s advisory committee on Heritable Disorders in Newborns and children (SacHDNc); dated September 21, 2011. 4 castillo a et al. Acta Paediatr. 2011 Feb;100(2):188-92. 5 cox PN et al. Anesthesiology. 2007;107:a1540. (abstract). much oxygen can cause severe eye damage from retinopathy very low birth-weight babies, only the Masimo NeoPt-500 real-time patient management instead of the device. in addition, of prematurity (RoP). Masimo Set® is the only pulse oximetry Sensors are designed for both size and performance in Masimo Set® is being used by hospitals to supplement the shown to help clinicians dramatically reduce RoP.4 infants as small as 500 grams. standard aPgaR score to assess general newborn health. newborn Screening wiTH maSimo SeT®2 n = 39,821 BaBies physical exam alone physical exam + masimo SeT® pulse oximetry Screening2 Sensitivity for ccHd detection Specificity for ccHd detection 63% 98% 83% 99.8% reducTion oF rop wiTH maSimo SeT®5 seVere reTinOPaThy Of PreMaTuriTy (rOP) raTe center period 1 (pre-policy change) period 2 (post-policy change) period 3 (post-policy change) a b 12% with Nellcor 5% with Masimo 4% with Masimo 13% with Nellcor 13% with Nellcor 6% with Masimo spo2 screening was conducted on 39,821 newborn babies, preductally (palm of right hand) and postductally (either foot) before routine physical examination. the baby was considered to be screening positive if: 1) either preductal or postductal spo2 measurement was <90%; 2) if in three repeat measurements, both preductal and postductal spo2 were <95%, or the difference between the two measurements was >3%. In period one, the baseline rate for severe roP in two centers, both using nellcor pulse oximetry, is established. In period two, the oxygen targeting policies, caregivers, and patient characteristics were the same at both centers, but only center a switched to masimo set®, which led to a significant reduction in roP (from 12% to 5%). In period three, center B switched to masimo set® and experienced a reduction in roP from period two (from 13% to 6%). * eve is pending ce Mark. Not currently available in the u.S. Masimo’s latest innovation in pulse oximetry, eve,* is an intuitive application that transforms the Radical-7® into a simple yet powerful newborn screening tool designed for improved accuracy and efficiency. 70 70 71 addreSSing THe number one TecHnologY Hazard in HoSpiTalS TodaY–alarmS proViding earlier noTiFicaTion oF poTenTial riSk wiTH adVanced alarmS core TecHnologY adVanTageS oF maSimo SeT® significant events. Masimo Set® broke through past barriers and alarm paradigms of the past to notify clinicians when While standard Spo2 and pulse rate alarms can > 3d desat index alarm™ helps clinicians detect multiple transient desaturation events that may identify patients at risk for the Joint commission, the ecRi institute, the anesthesia Patient reduced false alarms by over 95%. in an area like the icu where significant changes in physiology have occurred. sometimes provide a signal of deteriorating respiratory failure.5 Safety Foundation, and numerous other leading industry bodies up to 90% of all alarms used to be false, Masimo has helped have repeatedly cited alarm fatigue among the most pressing reduce the false alarm incidence to just 5%.4 adaptive threshold alarm helps clinicians reduce alarms patient conditions, Masimo’s advanced 3D alarms give you another dimension of • low Spo2 alarm limits are typically set too low to spot multiple transient desaturations that could indicate patient distress. 3D Desat index Delta alarm signals after five desaturations below 93% over a period of 60 minutes or less (Figure 2). patient safety hazards.1-3 conventional approaches to alarm and reduces the time required to set patient-specific alarms advanced notification of parameter conditions management were developed mainly to address the problems auTomaTed, paTienT-cenTric approacH wiTH by automatically adjusting the audible alarm to the patient’s that may precede clinically significant events. > 3d perfusion index delta alarm helps clinicians quickly detect critical changes in peripheral perfusion.6, 7 of conventional pulse oximetry’s inability to measure through adapTiVe THreSHold alarm* baseline (Figure 1). motion. Fixed alarm thresholds and delays sometimes reduce non We designed adaptive threshold alarm to help clinicians actionable alarms, but with potentially delayed notification of manage the frequency of alarms, improving on the limited * adaptive threshold alarm is ce Marked. currently not available in the u.S. • changes in peripheral perfusion can reflect significant underlying cardiovascular changes. 3D Perfusion index Delta alarm notifies clinicians when there is a 25% change in Perfusion index (Pi) within a period of 60 minutes or less (Figure 3). Figure 1: adaptive Threshold alarm example Figure 2: 3d desat index alarm example Figure 3: 3d pi delta alarm example SpO2 100% Desat Index Alarm Limit 93% Low SpO2 Alarm Limit 90% alarm frequency of fixed threshold alarm and adaptive Threshold alarm, both with 10-second delay. Baseline SpO2 Fixed Threshold Alarm Event Adaptive Threshold Alarm Event Adaptive Threshold Fixed Threshold Alarm sounds after five desaturations below 93% over a period of 60 minutes or fewer 0 20 40 60 80 Time (in minutes) Perfusion Index 1.0 0.9 0.8 0.7 0.6 PI Baseline determined by the Radical-7 PI Delta % Change = 25 (within a 1 hour period) Alarm triggered 100 150 200 250 300 Time (in minutes) 1 The Joint commission Sentinel event alert. 2012;49. 2 ecri institute. 2012. 3 Stoelting rk et al. APSF. 2011. 4 Shah n et al. J Clin Anesthesiology. 2012. 5 wong mw et al. J Trauma Inj Infect Crit Care. 2004; 56(2):356-362. 6 de Felice et al. Pediatr Crit Care Med. 2008;(9)2:203-208. 7 ginasar et al. Acta Anaesthesiol Scand. 2009; 53:1018-1026. SpO2 100 98 96 94 92 90 88 86 84 82 80 72 72 1 Hour Time 73 73 adVancing pulSe oximeTrY x-cal™ TecHnologY For enHanced paTienT SaFeTY Masimo’s newest innovations demonstrate that our commitment to pulse oximetry technology has never been stronger. x-cal TecHnologY For enHanced paTienT SaFeTY poor quality and performance of system components: cable and sensor. monitors equipped with X-cal-enabled FirST eVer noninVaSiVe FracTional Spo2 meaSuremenT until now, pulse oximeters could only measure and display functional oxygen saturation (Spo2). So, when patients had elevated carboxyhemoglobin (from carbon monoxide poisoning) and/or elevated methemoglobin (adverse reaction to more than 30 common drugs used in hospitals, like caines, nitrates, and Dapsone), the displayed functional oxygen saturation overstated the actual oxygen saturation value. Masimo Spfo2™* is the first truly fractional, noninvasive oxygen saturation measurement. Spfo2 allows more precise arterial oxygenation assessment in patients with elevated dyshemoglobins – common throughout the hospital and pre-hospital settings – as compared to functional oxygen saturation (Spo2). as a result, Spfo2 should enable earlier interventions and more timely therapeutic decisions. For example, in a patient who is a smoker with an Spo2 of 97%, carboxyhemoglobin level of 12%, and methemoglobin of 1%, if Spfo2 were available, it would be displayed at 84%. it is well accepted that clinicians would frequently make different diagnostic and therapeutic decisions at an oxygenation of 84% versus 97%. TFa-1™ diSpoSable ForeHead SenSor* expanding its versatility of sensors, Masimo now offers the tFa-1 transflectance forehead adhesive sensor as an alternative to traditional digit sensors. the forehead provides rapid detection of saturation changes compared to digit sites during low perfusion and offers easy access during surgery, resuscitation, and in patients with finger deformities or when the digit is not accessible. utilizing more than seven wavelengths of light and breakthrough signal processing, Masimo rainbow® Pulse co-oximeters can measure and display oxygen content (Spoc™), along with its components, hemoglobin and fractional arterial oxygen saturation (Spfo2). and improVed clinician eFFiciencY masimo has implemented a new technology called X-cal in its sensors, cables, and monitors to enhance patient safety and improve clinician efficiency. all masimo components 1) imitation Masimo sensors and cables 2) cables and sensors used far beyond their expected life circuit boards will not function with imitation cables and sensors and will display a message to replace cables and sensors that have been used beyond their useful life. work together as an integrated system to measure through 3) third-party reprocessed pulse the indication to change a sensor or cable only occurs challenging conditions including motion and low perfusion. oximetry sensors When all components are fully functioning, the system works as intended. In contrast, when any of these system components is How x-cal workS outside of active patient monitoring to avoid disruption to clinical practice. for example, if the end of a single- patient-use sensor’s expected life is reached while actively compromised, erroneous measurements can occur. X-cal is seamlessly integrated into masimo sensors, cables monitoring a patient, the sensor will continue to operate and circuit boards and is provided at no additional cost to until monitoring with that sensor is stopped. at the next X-cal is designed to address three common factors that can end-users. X-cal can detect imitation cables and sensors re-application of the same sensor, the monitor will display impact measurement accuracy and patient safety due to and measures the active patient monitoring time of each a message to advise the clinician to replace the sensor. 1 SenSor 2 cable 3 moniTor Masimo Set® Measure-through Motion and low Perfusion™ pulse oximetry has three system components: 1) the sensor that connects to the patient; 2) the patient cable that connects the sensor to the Masimo circuit board in the monitor; 3) the Masimo circuit board (Set® Spo2 or rainbow® Pulse co-oximetry) installed in a multiparameter patient monitor or Masimo pulse oximeter. Patient Monitor or Masimo oximeter * SpfO2 and TFA-1 are CE Marked. Currently not available. in the U.S. 74 75 See MoRe Do MoRe 76 76 77 HelPiNg cliNiciaNS oPtiMiZe blooD MaNageMeNt With the rainbow® measurement platform – including noninvasive total hemoglobin (SpHb®) – Masimo supports some of the most common, costly, and critical decisions made in healthcare. riSkS and coSTS oF in which significantly lower hemoglobin red blood cell TranSFuSionS triggers are used to determine need for Red blood cell (Rbc) transfusion is one of the transfusion – are safe.3 in addition, the most frequent procedures performed in u.S. cost of each Rbc unit is estimated between hospitals, with one in ten inpatients receiving $522 and $1,183 per unit, without including one or more blood units.1 While blood loss morbidity-associated costs.4 beyond the cost during surgery is a known risk factor, Rbc of transfusion, each Rbc unit transfused is transfusion overuse can increase patient risk associated with increased cost of care and and the cost of care.2 Meta-analysis of pooled transfusions that occur at higher hemoglobin results from multiple observational studies, levels increase the cost of care more than each of which adjusts for risks between those given at lower hemoglobin levels.5 With patients, shows that patients receiving Rbc the growing recognition of the need to reduce transfusions have a 69% higher mortality, 88% transfusions, noninvasive and continuous higher infection rate, and 250% higher rate of hemoglobin (SpHb) can be a key tool to help acute respiratory distress syndrome (aRDS).2 clinicians overcome the limitations of existing Multiple randomized controlled trials indicate approaches, although SpHb monitoring is not that restrictive transfusion practices – those intended to replace blood draws. 1 aHRQ. inpatient Sample. 1997-2007. 2 Marik Pe et al. Crit Care Med. 2008;36(9):2667-74. 3 carson et al. Cochrane Database Syst Rev. 2012 apr 18;4:cD002042. 4 Shander a et al. Transfusion. 2010;50(4):753-765. 5 Murphy g J et al. Circulation. 2007;116:2544-2552. Prior to using this device, the user should read and understand the operator’s Manual and Directions for use. laboratory diagnostic tests using blood samples should be conducted prior to clinical decision making to completely understand the patient’s condition. comparisons between SpHb measurements and laboratory diagnostic hemoglobin measurements may be affected by sample type, collection technique, physiological, and other factors. “Deciding to transfuse based on a single static measurement more often results in patients receiving unnecessary transfusions with increased risks, costs, and the depletion of an already scarce blood supply. New medical technologies and devices that continuously monitor hemoglobin, oxygen, and perfusion will become essential for transfusions.” dr. aryeh Shander chief, Department of anesthesiology, Pain Management and Hyperbaric Medicine, icahn School of Medicine at Mount Sinai, Mount Sinai Hospital, New york 78 78 79 oVeruSe oF blood TranSFuSionS growing recogniTion oF THe need limiTaTionS wiTH exiSTing approacHeS assists in better decision-making. While SpHb monitoring is To reduce TranSFuSionS To aSSeSS TranSFuSion need not intended to replace blood draws, it nonetheless identifies Many transfusions are unnecessary. a systematic, expert the most universally available information about whether a significant changes in hemoglobin trends and lack of review of 494 studies for positive impact on health outcomes transfusion is needed during surgery is estimated blood loss, significant changes in hemoglobin between invasive blood showed that 59% of Rbc transfusions are “inappropriate.”1 which is often overstated. Visible blood and fluid loss appears sampling and laboratory analysis.5 given the risks and costs of Rbc transfusions, there is a growing to indicate how much blood has been lost, but in a recent study recognition of the need to implement strategies to reduce Rbc at Duke university, anesthesiologists estimated blood loss at continuous hemoglobin means clinicians have real-time visibility transfusions. the Joint commission has introduced Patient 40% more than it actually was.4 the implication is that the need to the directional trend of hemoglobin – whether it is stable, rising, blood Management Measures that encourage hospitals to for transfusion may appear to exist, when in fact it does not. or falling. this can help clinicians avoid unnecessary transfusions evaluate appropriateness of transfusions as a continuous quality when the SpHb trend is stable even though the clinician may indicator.2 the american Medical association and the Joint How SpHb moniToring HelpS wiTH otherwise perceive hemoglobin to be dropping. likewise, when the commission also recently identified Rbc transfusions as one of TranSFuSion deciSionS SpHb trend is rising but the clinician may otherwise believe that the top five overused procedures in medicine, defining overuse Masimo’s SpHb measures hemoglobin noninvasively and it’s not rising fast enough. inside and outside the operating room, as “circumstances where the likelihood of benefit is negligible or continuously. the noninvasive aspect makes the technology a declining SpHb trend may also allow clinicians to identify internal zero, and the patient is exposed to the risk of harm.” 3 easy to apply to the patient, and the continuous aspect bleeding and permit earlier interventions. a systematic, expert review of 494 studies for positive impact on health outcomes showed that 59% of Rbc transfusions are “inappropriate.” appropriaTe uSe oF TranSFuSion InaPProPrIate // aPProPrIate // uncertaIn (cid:127) 12% 59% (cid:127) (cid:127) 29% the american medical association and the Joint commission also recently identified rBc transfusions as one of the top five overused procedures in medicine, defining overuse as “circumstances where the likelihood of benefit is negligible or zero, and the patient is exposed to the risk of harm.”3 494 studies were evaluated by an expert panel in a systematic method to assess appropriateness of rBc transfusion, revealing a significant opportunity to reduce unnecessary transfusions.1 1 Shander et al. TransMed Rev. 2011. 232-246. 2 Joint commission Perspectives. the Joint commission continues to Study overuse issues. Volume 32, (Radical-7) Number 5, 2012: 4-8(5). 3 http://www.jointcommission.org/ patient_blood_management_performance_measures_project/ 4 Hill SJ et al. ASA. 2011 (abstract). 5 Frasca D et al. Crit Care Med. 39(10); 2011; 2277-2282. Hemoglobin continuous hemoglobin trending between invasive blood sampling provides a real-time indication of whether: > hemoglobin is stable when it may appear to be dropping > rising when it may not appear to be rising > or dropping when it appears to be stable. SpHb Lab hemoglobin Time 80 80 81 SpHb Helped clinicians reduce Transfusion Frequency in lower blood loss Surgery1 SpHb Helped clinicians reduce the amount of blood Transfused in Higher blood loss Surgery2 Frequency of Intraoperative Blood Transfusions Average RBC Units Transfused Per Patient reducing blood TranSFuSionS and coST 5% 4% 3% 2% 1% 0% 4.5% 0.6%* Standard Care Group SpHb Group 87% Reduction in Blood Transfusion Frequency 2.5 2.0 1.5 1.0 0.5 0.0 1.9 47% reduction 1.0** 0.9 Average RBC Units Reduced Per Patient Standard Care Group SpHb Group randomized controlled trial in 327 orthopedic patients. * p=0.03 vs Standard care group prospective cohort study in 106 neurosurgery patients. ** p<0.001 vs Standard care group SpHb Helped clinicians decrease the Time to Transfusion, when a Transfusion is Truly indicated2 range of potential blood cost Savings per patient with SpHb monitoring3 Time to Transfusion Start After Need Established (min) 50 40 30 20 10 0 50.2 9.2*** Standard Care Group SpHb Group 41min Reduction in Time to Transfuse proJecTed SpHb SaVingS range of rbc Transfusion cost estimates low blood loss Surgery1 High blood loss Surgery2 $522 $1,183 $47 $106 $470 $1,065 clinical eVidence THaT SpHb moniToring to reduce the percent of patients receiving three or more in lower blood loss surgery, the 0.09 lower Rbc units per HelpS reduce TranSFuSionS Rbc units from 73% to 32% and reduce the average number patient with SpHb monitoring is projected to reduce Rbc there are now two studies showing that SpHb monitoring of Rbc units transfused by 47% (from 1.9 to 1.0 units per costs by $47 to $106 per patient monitored.1 in higher helps clinicians reduce Rbc transfusions. patient).2 in this study, the researchers also showed that blood loss surgery, the 0.90 lower Rbc units per patient SpHb monitoring has been shown in a randomized controlled received them sooner by 41 minutes on average. $470 to $1,065 per patient monitored.2 these estimates trial in lower blood loss surgery (orthopedic) to reduce the do not take into account the expense of SpHb monitors frequency of intraoperative blood transfusions by 87% proJecTed coST SaVingS From SpHb moniToring or sensors, or the other costs associated with over- (from 4.5% to 0.6%) and the average number of Rbc units To reduce TranSFuSionS transfusion or delayed interventions. with SpHb monitoring, patients who needed Rbc units with SpHb monitoring is projected to reduce Rbc costs by transfused by 90% (from 0.1 to 0.01 units per patient).1 to project the potential savings from SpHb monitoring, SpHb monitoring has also been shown in a prospective estimates for Rbc transfusions ($522 to $1,183) by the cohort study in higher blood loss surgery (neurosurgery) expected reduction in Rbc transfusions per patient.3 we can simply multiply the range of published cost prospective cohort study in 106 neurosurgery patients. *** p<0.001 vs Standard care group 1 ehrenfeld Jm et al. ASA. 2010. lb05. (abstract). 2 awada wn et al. J Clin Monit Comput. 2015 Feb 4. [epub ahead of print] pubmed pmid: 25649717. 3 Shander et al. Transfusion. 2010;50(4):753-765. 82 83 riSk and coST oF undeTecTed bleeding in addition to assisting with transfusion management, continuous SpHb can also help clinicians inside and outside the operating room identify changes in hemoglobin that may be associated with internal bleeding. bleeding affects up to 35% of patients in childbirth, clinical estimation of blood loss surgery, intensive care, and obstetric care is inaccurate and changes in standard vital areas.1 bleeding is considered a significant signs can occur long after the bleeding has risk factor for patients, and late detection begun. low hemoglobin identifies bleeding further increases risk and cost.2 Surveys over 90% of the time, but is only assessed show that the majority of u.S. hospitals have intermittently and requires a blood draw multiple patients per year with serious injury and laboratory analysis.4 in some parts or death due to late detection of bleeding.3 of the world, laboratory testing is simply not available. limiTaTionS oF currenT approacHeS To deTecT bleeding by measuring hemoglobin continuously, a significant number of injuries or deaths clinicians can become aware of real-time due to bleeding are preventable. Prevention drops in hemoglobin that may be indicative requires identifying that a patient has of bleeding. identification of low or falling experienced significant bleeding and then hemoglobin levels allows interventions intervening to stop the bleeding and improve that may prevent preventable death and the patient’s condition. identifying bleeding is disability. SpHb monitoring is not intended challenging because even during surgery and to replace blood draws. 1 Hebert Pc. Crit Care. 1999: 3(2):57-63. 2 Herwaldt la. Infect Control Hosp Epidemiol. 2003; 24(1):44-50. 3 HRa Research of Hospital executive. 2012. 4 bruns b et al. J Trauma. 2007; 63(2):312-5. poTenTial For earlier idenTiFicaTion oF Falling Hemoglobin ValueS Hb Value (g/dL) 9.0 8.5 8.0 7.5 7.0 6.5 6.0 Lab tHb ordered early due to declining SpHb values Patient transported to OR for splenectomy Standing lab order 10 11 12 13 14 15 16 17 18 tHb lab test Masimo SpHb (unblinded) Blood transfusion initiated 19 Hours “Masimo SpHb helped prevent a potentially life-threatening event. i am now using it for all my major craniofacial procedures and can’t see doing a surgery without it.” Jeffrey Fearon, md Physician for 8-year-old girl who had just completed craniofacial surgery in which SpHb signaled undetected bleeding through a dramatic drop in hemoglobin over a 5-minute period. 84 85 85 Single Hemoglobin measurement comparison between Three devices and the central laboratory Hematology analyzer2, 3 SpHb (g/dL) CO-Oximeter Hb (g/dL) HemoCue Hb (g/dL) 18 16 14 12 10 8 5 4 SpHb 1.0 g/dl (armS) Bias + Standard Deviation = 0.0 + 1.0 g/dL 18 16 14 12 10 8 5 4 CO-Oximeter 1.1 g/dl (armS) Bias + Standard Deviation = 0.9 + 0.6 g/dL 18 16 14 12 10 8 5 4 HemoCue accuracY oF noninVaSiVe and conTinuouS Hemoglobin moniToring compared To common inVaSiVe meTHodologieS 1.3 g/dl (armS) Bias + Standard Deviation = 0.3 + 1.3 g/dL While hemoglobin is one of the most common laboratory tests performed, most clinicians are unaware of variation that should be expected when comparing hemoglobin measurements – both within and between various device models. this is because clinicians do not typically measure hemoglobin more than once in the same patient at the same time. Variation is induced by physiology, blood sampling technique, device methodology, and individual device calibration.1 4 6 8 10 12 14 16 18 4 6 8 10 12 14 16 18 4 6 8 10 12 14 16 18 Hematology Analyzer tHb (g/dL) Hematology Analyzer tHb (g/dL) Hematology Analyzer tHb (g/dL) Trended Hemoglobin measurement comparison between Three devices and the central laboratory Hematology analyzer2, 3 Difference in Consecutive Hemoglobin Values (SpHb) (g/dL) Difference in Consecutive Hemoglobin Values (HbABG) (g/dL) Difference in Consecutive Hemoglobin Values (HbCAP) (g/dL) SpHb R=0.64 18 16 14 12 10 8 5 4 CO-Oximeter R=0.60 18 16 14 12 10 8 5 4 HemoCue R=0.39 4 6 8 10 12 14 16 18 4 6 8 10 12 14 16 18 4 6 8 10 12 14 16 18 Difference in Consecutive Hemoglobin Values (tHb) (g/dL) Difference in Consecutive Hemoglobin Values (tHb) (g/dL) Difference in Consecutive Hemoglobin Values (tHb) (g/dL) 18 16 14 12 10 8 5 4 86 the results of an independent study conducted in a surgical intensive care unit illustrate the variation that can be expected between hemoglobin device methods. a total of 471 hemoglobin measurements were evaluated from 62 patients. the results of an independent study conducted in a surgical intensive care unit illustrate the variation that can be expected between hemoglobin device methods. a total of 471 hemoglobin measurements were evaluated from 62 patients. Noninvasive and continuous hemoglobin (SpHb), a satellite laboratory co-oximeter (Siemens RapidPoint 405), and a point-of-care device (Hemocue 301) were all compared to reference hemoglobin from the central laboratory hematology analyzer (Sysmex Xt2000i). in this study, the absolute accuracy and trending accuracy of SpHb was similar to the two widely used invasive methods2 when all three methods were compared to the central laboratory hemoglobin analyzer, both in single- measurement comparisons as well as trended measurement comparisons. only SpHb provides hemoglobin noninvasively and continuously – for real-time visibility to hemoglobin changes, or lack of changes, in-between invasive blood sampling and laboratory analysis. 1 berkow l. J Clin Monit Comput. 2013 Mar 26. 2 Frasca D et al. Crit Care Med. 2011 oct;39(10):2277-82. 3 aRMS was calculated as defined by the iSo 80601-2-61. Some independent researchers have conducted their own testing and obtained similar results, while other researchers have reported larger differences when comparing SpHb measurements to laboratory measurements. 87 aiding clinician aSSeSSmenT oF Fluid reSponSiVeneSS and Fluid managemenT wiTH pVi® Fluid administration is one of the most common hospital interventions. although it is critical to improving patient status and enabling end organ preservation, unnecessary fluid administration is associated with increased morbidity and mortality.1 While commonly used, traditional “static” measurements such as central venous pressure are not reliable to predict whether a patient will respond to volume administration with an increase in blood flow (stroke volume or cardiac output) and therefore are not effective to guide fluid management decisions. clinical and Financial beneFiTS oF dYnamic moniToring TecHnologieS Helping aSSeSS Fluid reSponSiVeneSS wiTH pVi decisions and patient outcomes in two randomized controlled Masimo Set® pulse oximetry technology has the unique ability to trials.17,18 in a study of colorectal surgery patients managed with New “dynamic” monitoring technologies that measure stroke also provide a dynamic fluid responsiveness variable called pleth the enhanced Recovery after Surgery (eRaS) protocol including volume variation (SVV), pulse pressure variation (PPV), or variability index (PVi) that is similar to SVV and PPV but PVi is goal-directed fluid therapy guided by PVi, 30-day hospital costs were stroke volume response (∆SV) are effective at predicting fluid responsiveness and enabling goal-directed fluid noninvasive. PVi is displayed on the same monitor and obtained reduced by $2,867 and median length of stay was reduced by 2 days.19 with the same sensors as are used for Masimo Set® pulse oximetry also, PVi has also been shown to help assess which patients will management. a meta-analysis of 32 randomized controlled or rainbow® monitoring – with no incremental procedural cost. PVi become hemodynamically unstable with the addition of Positive end operating room8 Fluid Responder Detection – Sensitivity (%) 100 90 80 70 60 50 40 30 20 10 0 intensive care unit9 masimo pVi has been shown to help clinicians assess fluid responsiveness as reliably as new invasive parameters, and better than traditional invasive parameters. Pleth Variability Index (PVI) Arterial Pulse Pressure Variation (PVV) Cardiac Index (CI) Pulmonary Capillary Wedge Pressure (PCWP) Central Venous Pressure (CVP) Sensitivity 1.0 0.8 0.6 0.4 0.2 0.0 PVI, AUC = 0.97 CVP, AUC = 0.56 SVV, AUC = 0.99 0 10 20 30 40 50 60 70 80 90 100 Fluid Non-Responders Detection – 100 - Specificity (%) 0.0 0.2 0.4 0.6 0.8 1.0 1-Specificity This observational study evaluated 25 surgical patients before and after volume expansion, with fluid responders (sensitivity) defined as a cardiac index increase of >15% and fluid non-responders (specificity) defined as a cardiac index increase of <15%. This study has shown pVi to be an effective alternative indicator for accurate, noninvasive, and continuous fluid responsiveness in mechanically ventilated patients undergoing major surgery. trials showed that goal-directed fluid management has been shown to help clinicians assess fluid responsiveness in expiratory Pressure (PeeP), which may allow clinicians to more carefully Lactate Levels (mMoIL-1) with dynamic monitoring technologies reduces surgical mechanically ventilated patients under general anesthesia during select ventilator settings and monitor effects more closely.20 complications by 32% and shortens length of stay by 1.2 surgery,8,9,10,11 in the icu in adults and children,12,13 and in septic days.3 Depending on the morbidity rate of the patient patients in early stages of shock in the emergency department.14 incluSion in Fluid managemenT guidelineS population, goal-directed fluid management with dynamic the positive and expanding evidence for PVi has led to its inclusion monitoring technologies is estimated to save between Helping improVe Fluid managemenT wiTH pVi in guidelines and best practices for fluid management. in 2012, $808 to $7,000 per patient.4 While these technologies have PVi has also been shown to improve fluid management compared the united Kingdom’s National Health Service (NHS) included PVi been shown to improve clinical and cost outcomes, they are to standard care in two randomized controlled trials, reducing in its intra-operative Fluid Management Pack, which serves as a invasive and/or complicated and therefore are underutilized intraoperative fluid infused and intraoperative and postoperative guide for hospitals implementing fluid responsiveness monitoring and still only justified for the highest risk patients.5,6,7 as a lactate levels.15,16 in addition, compared to goal-directed therapy to improve patient outcomes.21 in 2013, the French Society for result, many patients who could benefit from goal-directed fluid management are not receiving it. with invasive dynamic monitoring technologies (PPV and ∆SV), goal-directed therapy with PVi showed similar fluid management anaesthesia and intensive care (SFaR ) added PVi to its guidelines for optimal hemodynamic management of surgical patients.22 1 bundgaard-Nielsen M et al. Acta Anaesthesiol Scand. 2007; 51(3):331-40. 2 Michard F et al. Chest. 2002. 3 grocott et al. Br J Anaesth. 2013. 4 Simon t et al. Critical Care. 2013. 17(2):196. 5 benes J et al. Critical Care. 2010, 14:R118. 6 Miller t et al. aSa. 2013. #4293. 7 gan tJ et al. IARS. 2013. 8 cannesson M et al. Br J Anaesth. 2008;101(2):200-6. 9 Zimmermann M et al. Eur J Anaesthesiol. 2010 Jun;27(6):555-61. 10 Fu Q et al. Biosci Trends. 2012 Feb;6(1):38-43. 11 Haas S et al. J Anesth. 2012 oct;26(5):696-701. 12 loupec t et al. Crit Care Med. 2011;39(2);294-299. 13 byon HJ et al. BJA. 2012 Dec;Doi 10.1093/bja/aes467. 14 Feissel M et al. J Crit Care. 2013 May 14. 15 Forget P et al. Anesth Analg. 2010;111(4):910-4. 16 yu y et al. J Clin Monit Comput. 2014 Feb 21. 17 Delaporte a et al. ESA. 4aP3-9. 2014. 18 bahlmann H et al. ESA. 3aP5-5. 2014. 19 thiele RH et al. Journal of the American College of Surgeons (2015), doi: 10.1016/j. jamcollsurg.2014.12.042. 20 Desebbe o et al. Anesth Analg. 2010;110:792-798. 21 http://www.ntac.nhs.uk/Newsandevents/ioFM_technology_adoption_Pack_Published.aspx. 22 Vallet b et al. SFAR. 2013. 2.5 2.0 1.5 1.0 0.5 0.0 This randomized study of 82 abdominal surgery patients found that pVi- based, goal-directed fluid management reduced the volume of intraoperative fluid infused and reduced intraoperative and post- operative lactate levels.9 Financial benefits of using enhanced recovery after Surgery (eraS) protocol including pVi for goal-directed Therapy outcome conventional approach without pVi enhanced recovery after Surgery approach with pVi 30-day hospital costs $18,017 median length of stay 5 days $15,150 3 days most recently and as part of a multi-modal perioperative management approach called enhanced recovery after Surgery (eraS), pVi was shown to help reduce 30-day hospital costs by $2,867 per patient and reduce median length of stay by 2 days. PVI Group Control Group Start At 24 Hr At 48 Hr Intraoperative Surgery 88 89 pao2 range and aVailable moniToring meTHodS PaO2 (mmHg) Hyperoxia Oxygen Reserve Normoxia Hypoxia SpO2/SaO2 ORI with SpO2 PaO2 in utilizing oRi the researchers noted mean of 40 sec advance alarm before Spo2 reached 98% and about 52 seconds advance alarm before the patients reached 90% Spo2. oxygen reserve index: a new noninvasive method of oxygen reserve measurement. Szmuk p., Steiner J., olomu p., dela cruz b.S., Sessler d. Proceedings of the american Society of anesthesiologists, october 14, 2014. New orleans; boc12. FirST noninVaSiVe & conTinuouS parameTer To proVide inSigHT inTo oxYgen reSerVe in paTienTS receiVing SupplemenTal oxYgen Pulse oximetry (Spo2) provides noninvasive approximately 100 to 200mmHg). oRi is and continuous visibility to arterial blood intended to supplement, not replace, Spo2 oxygenation in hypoxia (less than normal monitoring and Pao2 measurements. as oxygenation) and normoxia (normal an “index” parameter with a unit-less scale oxygenation). During supplemental oxygen between 0.00 and 1.00, oRi can be trended administration, clinicians often use the and has optional alarms to notify clinicians of partial pressure of oxygen (Pao2), which is changes in a patient’s oxygen reserve. invasive and intermittent, to monitor levels of hyperoxia (higher than normal oxygenation). in patients receiving supplemental oxygen between invasive sampling, changes in Pao2 such as those in surgery, conscious sedation, can go unnoticed and lead to unexpected or the intensive care unit, oRi may provide an hypoxia or unintended hyperoxia. advance warning of a pending hypoxic event. in addition, oRi may provide an indication of oxygen Reserve index (oRi™) provides an unintended hyperoxic state. in this way, oRi real-time visibility to oxygenation status may enable proactive interventions to avoid in moderate hyperoxic range (Pao2 of hypoxia and unintended hyperoxia. 90 90 91 at tHe Root oF tRaNSFoRMiNg PatieNt caRe 92 92 93 WHy Root? From Masimo’s inception, the root of our inspiration has been unwavering – patients, their families, and their caregivers. this inspiration guides us every time we set Root is a powerful new patient monitoring Root includes a dock for the Radical-7® or out to solve a previously “unsolvable” problem, and connectivity platform that enhances Radius-7,™ an instantly interpretable display, in every new measurement we create, and our breakthrough rainbow® and Set® and iris™ connectivity ports for third-party in every new software, hardware, or systems measurements with multiple additional devices such as iV pumps and ventilators. Root innovation we have developed. all our parameters – including Sedline® brain integrates multiple streams of data and simplifies innovations are designed for one purpose – function monitoring, o 3™ regional patient care workflows, empowering caregivers to enable clinicians to get to the root of better oximetry,* and capnography and gas to help make quicker patient assessments, care for their patients. that’s why we called our monitoring – in an integrated, clinician- earlier interventions, and better clinical decisions latest innovation Root.® centric platform. throughout the continuum of care. “Root integrates rainbow® measurements so at any moment i can see what i want to see and how i want to see it—a great advantage to the anesthesiologist in a data- rich operating room. Root makes it easy to use SpHb and PVi together to optimize transfusions and fluid management.” dr. keith ruskin Professor of anesthesiology at yale-New Haven Hospital in New Haven, ct 94 94 * o3 regional oximetry is ce Marked. currently not available in the u.S. 95 geTTing To THe rooT oF rooT® inSTanTlY inTerpreTable, HigH-ViSibiliTY diSplaY With the Radical-7 handheld inserted in its dock, Root enables instant interpretation of Masimo’s breakthrough noninvasive measurements. the brilliant, high-resolution, adaptive display is designed to aid clinicians’ rapid assessment of patient status in three distinct ways: > “Trend” view in which each measurement value is displayed alongside its graphical trend > “analog” view for quick assessment through gauges showing measurement values in relation to alarm ranges When docked with Root, the Radical-7’s screen can transform into an alarm status visualizer, with a three-dimensional, anatomical image that associates device measurements with alarm status. trend view inTuiTiVe ToucHScreen naVigaTion For eaSY and adapTable uSe in anY HoSpiTal enVironmenT With a simple tap, swipe, or drag-and-drop, screen views and parameter sizing can be customized to suit any hospital environment, workflow, clinician preference, or patient-specific need. this allows Root to be used across a wide variety of care areas with disparate clinical and operational requirements – from the operating room to the intensive care unit to the medical-surgical floors. analog view alarm STaTuS ViSualizer eaSilY cuSTomizable ToucHScreen a three-dimensional, anatomical image that associates device measurements with alarm status. Screen views and parameter sizing are easily customized with a simple tap, swipe, pinch, or drag-and-drop. no alarm approaching alarm alarm state 96 96 97 97 THe power oF maSimo breakTHrougH meaSuremenTS in a paTienT-worn moniTor untethered, continuous monitoring with Radius-7™ allows patient mobility without the hassle of disconnecting and reconnecting from traditional monitoring devices. THe mobiliTY oF paTienT moniToring unlock breakTHrougH and aSSeSSmenT rainbow SeT® meaSuremenTS Studies have shown that patient mobility is a key Radius-7 is the first and only wearable, wireless factor in more rapid patient recovery.1 However, monitor to leverage breakthrough Masimo continuously monitoring mobile patients rainbow Set® technology to enable the presents challenges. Radius-7* is the first rainbow continuous monitoring of: Set® noninvasive wearable, wireless monitor for the Root Patient Monitoring Platform. Radius-7 is designed to allow patient mobility along with continuous monitoring, enabling early identification of clinical deterioration. opTimize workFlowS and eFFiciencieS Radius-7 is designed to promote greater patient comfort and independence while reducing nurse time to disconnect the monitor each time the patient moves. Radius-7 utilizes a standard wireless short- > oxygen saturation (Spo2) and pulse rate monitoring with Masimo Set® Measure- through Motion and low Perfusion™ pulse oximetry for reliable detection of desaturation and accurate pulse rate while dramatically reducing false alarms2, 3 > Respiration rate monitoring through either rainbow acoustic Monitoring™ for acoustic respiration rate (RRa®) or through the plethysmograph waveform (RRp™*) to identify respiratory depression or tachypnea3 range communication to Root via secured > Noninvasive and continuous hemoglobin bluetooth with upgradeability to WiFi† (SpHb) monitoring with rainbow® Pulse co- for direct communication throughout the oximetry may help clinicians detect bleeding hospital to the Patient SafetyNet™¥ remote earlier, avoid unnecessary blood draws, and monitoring system. optimize transfusion decisions. 1 Needham D. et al. Archives of Physical Medicine and Rehabilitation. Vol 91, issue 4, PP 536–542, april 2010. 2 taenzer a.H. et al. Anesthesiology. 2010 Feb;112(2):282-7. 3 Pyke Joshua et al. Patient Safety & Quality Healthcare. May/June 2009.*Radius-7 and RRp are ce Marked. currently not available in the u.S. † the configuration for long-range communication is not yet released. ¥ the use of the trademarks Patient SafetyNet and PSN is under license from university Health System consortium. one Radius-7 battery charges while the other is being worn by the patient, making battery exchange quick and convenient. 98 99 Flexible meaSuremenT expanSion in rooT wiTH maSimo open connecT With Root, Masimo is providing an open invitation to other companies, from small to large, to develop and commercialize their innovations and deliver them via the Root platform. expanding maSimo meaSuremenTS Root offers expanded measurement capability through software upgrades and Masimo open connect™ (Moc-9™) modules. Sedline brain function monitoring monitoring, Masimo capnography and gas monitoring, and o3 regional oximetry are all provided as Moc-9 modules. Moc-9 modules expand Root’s capability via third- party development of additional measurements. deSigned To STimulaTe THird-parTY innoVaTion* Moc-9 is designed to spur third-party development of additional measurements by companies other than Masimo. Market barriers and development costs often keep small, innovative companies from delivering products to the clinicians and patients who need them most. With Root, Masimo is providing an open invitation to other companies, from small to large, to develop and commercialize their innovations and deliver them to market via the Root platform. We anticipate a whole new ecosystem of third-party measurements to spring from Root – seeding whole new fields of innovation in patient monitoring. 100 101 * Root with third party expandability and O3 are CE Marked. Currently not available in the U.S. rooT wiTH brain FuncTion moniToring Featuring 4 simultaneous channels of high-quality eeg data, Sedline® provides continuous information about both sides of the brain and provides information about a patient’s response to anesthesia. THe rooT oF beTTer daTa FaciliTaTing indiVidualized TiTraTion Patients respond differently to anesthetics, Sedline enables individualized titration which can mean over- or under-administration of sedation and faster emergence, while during surgery and conscious sedation offering reliable monitoring during challenging procedures. Sedline brain function monitoring conditions such as electrocautery. provides continuous information about a patient’s response to anesthesia. Sedline use of Sedline and its Patient State index enables monitoring of both sides of the brain (PSi) has been shown to help clinicians manage simultaneously. the Density Spectral array (DSa) patients to significantly faster emergence from enables immediate recognition of asymmetrical anesthesia and recovery.1 activity, identification of the specific frequency in which most eeg activity is occurring, and easy- to-see display of burst suppression events. “Sedline gives me a better idea of where i stand at each phase of anesthesia. the PSi number helps guide me to make subtle changes in my anesthetic appropriate for the patient’s heart rate and blood pressure, and thus arrive at the end where i want to be.” david drover, md Stanford university Hospital, Stanford, ca 1 Drover DR et al. Acta Anesthesiology. 2002; 97:82-89. 102 103 103 rooT wiTH regional oximeTrY* o3™ regional oximetry uses near-infrared spectroscopy (NiRS) and reflectance pulse oximetry to enable simultaneous monitoring of tissue oxygen saturation (rSo2) in the brain and arterial blood oxygenation (Spo2). THe rooT oF beTTer brain oxYgenaTion moniToring utilizing regional oximetry during surgery to better monitor cerebral oxygenation. Regional oximetry – also known as tissue oximetry or cerebral oximetry – enables a powerFul combinaTion continuous assessment of the oxygenation o3’s combination of highly accurate regional “Masimo o3 Regional oximetry will have the unique ability to measure both rSo2 and Masimo Set® Spo2 pulse oximetry simultaneously from the same forehead sensor. this may provide of the tissue beneath the sensor. o3 helps oximetry measurements and onboard pulse the anesthesiologist or perfusionist for the first time with a clinicians detect regional hypoxemia oximetry enables continuous assessment of that pulse oximetry alone can miss.1 For deviations between rSo2 and Spo2, taken from this important reason, more and more either the o3 sensor or from the Radical-7 anesthesiologists and perfusionists are docked in Root.2 differential analysis of regional to central oxygen saturation monitoring that could help the clinician in maintaining brain oxygenation and safe cerebral perfusion during cardiac procedures.” 1 Redford D et al. Absolute and Trend Accuracy of Masimo O3 regional oximetry in Healthy Volunteers During Controlled Hypoxia 2014 STA Annual Meeting. January 15-18, orlando, Fl. abs#46. 2 if regulatory approval has been obtained in your country and Root has the relevant software update. * o3 regional oximetry is ce Marked. currently not available in the u.S. michael a.e. ramsay, md chief of the Department of anesthesiology and Pain Management, baylor university Medical center, Dallas o3 moniToring every root offers plug and play monitoring with all moc-9 modules. 104 105 105 rooT wiTH capnograpHY and gaS moniToring changes in expired respiratory gas can be an early indicator of an adverse respiratory event. Hypoventilation, hyperventilation, airway obstruction, and other potentially life-threatening conditions can be rapidly detected with capnography – enabling clinicians to intervene as early as possible. capnography and gas monitoring also provide insight into the effectiveness of the anesthesia breathing circuit, aiding clinicians in maintaining proper gas concentrations and ventilation levels. nomoline™ – no moiSTure Sampling line Nomoline technology eliminates common problems associated with conventional sidestream gas analysis. incorporating a special polymer and a hydrophobic bacterial filter, the Nomoline allows water in the sampling line to evaporate into the surrounding air, while leaving oxygen, carbon dioxide, and anesthetic gases unaffected. Specially designed for low-flow applications and functional in any orientation, Nomoline technology can be used in any clinical application for all types of patients from neonates to adults. Nomoline is designed to extend the product life in single-use applications, such as high humidity environments. Nomoline’s innovative design also allows multi-patient use as a resposable solution, along with the use of generic cannulas. Root with capnography and gas monitoring measurements delivered through either complements our breakthrough noninvasive mainstream or sidestream options, Masimo portfolio with innovative, multispectral customers can now benefit from end-tidal co2, technologies for measuring respiratory Fico2, RR, N2o, o2, and inhalation anesthetic gases and inhalation anesthetic agents. agent monitoring in a range of hospital the solutions range from integrated oeM environments—from the operating room to solutions to external “plug-in and measure” gas intensive care to the medical-surgical floors. analyzers to handheld devices. With multiple irma™ – a compleTe moniTor in a probe Single-patient-use cannula and Nomoline adapter Single-patient-use cannula and multi- patient-use Nomoline adapter iSa™ – HigH perFormance in a SideSTream analYzer enabled by state-of-the-art spectrometer technology that utilizes nine different wavelengths of light and powerful signal processing algorithms, iSa provides the clinician with precise capnography and gas measurements with crisp waveforms that help depict the clinical situation for adults and neonates, from the operating room to the general floor. additionally with virtually no warm-up time and full accuracy performance in ten seconds iSa saves time in critical situations. iSa is factory calibrated and does not require field calibration, minimizing maintenance efforts for hospital biomedical engineering departments. iSa sidestream analyzers are available as standalone or easy- Designed with the latest advancements in miniaturized components and to-integrate oeM modules. microprocessor technology, the iRMa mainstream analyzer weighs less than 1 ounce and fits in the palm of your hand. this versatile, complete mainstream capnography and gas monitoring system can be utilized with adult, pediatric, or infant patients. iSa co2 with Nomoline attached to the back of the Root, enabling quick disconnect and movement to any Root in which capnography and gas monitoring is desired Irma aX+ etcO2, rr, n2O, inhalation anesthetic agent identification Irma co2 etcO2, ficO2, rr Isa or+ etcO2, rr, n2O, O2, inhalation anesthetic agent identification Isa co2 etcO2, ficO2, rr Isa aX+ etcO2, rr, n2O, inhalation anesthetic agent identification 106 107 keeping clinicianS and paTienTS connecTed inTegraTing meaSuremenTS To enable meaningFul uSe oF HealTH inFormaTion TecHnologY keeping clinicianS and paTienTS connecTed clinicians spend their time caring for patients, not recording data. two-way, Hl7-based connectivity to the eHr. ace significantly new standards for hospitals require meaningful use of the masimo’s pulse oximeters also feature a built-in wireless radio reduces the time and complexity to integrate and validate custom electronic health record (eHr) by charting changes in vital signs for communication through a hospital’s wireless network—with Hl7 implementations, and demonstrates masimo’s commitment as well as documentation of interventions. masimo enables seamless integration to the eHr. Patient safetynet incorporates to innovation that automates patient care with open, scalable, automatic recording and transmission of key data into the eHr so the masimo adaptive connectivity engine (ace), which enables and standards-based connectivity architecture. today’s challenging hospital environment subjects clinicians to mountains of information and multiplying documentation requirements. Masimo simplifies and automates this process, streamlining workflows and improving patient safety by empowering clinicians to focus on patients rather than technology. Through iris, root is designed to provide built-in integration to multiple standalone devices, including iV pumps, ventilators, beds, and other patient monitors. third-party device iris icon root device icons Patient safetynet view Wireless 802.11 or wired connection Patient safetynet appliance connectivity to electronic health record & central monitoring stations notifications iriS™ inTegraTion plaTForm* be remotely viewed with Patient SafetyNet, Despite huge advances in medical technology, transmitted through notification systems or the lack of device communication and to electronic health record (eHR) systems to integration creates risks to patient safety facilitate better patient care and meaningful in hospitals around the world. existing use, and eventually displayed on Root at the approaches for device interoperability require point of care to facilitate decision support. separate hardware, software, and/or network infrastructure, which can clutter the patient iris offers a built-in connectivity gateway that can integrate multiple standalone devices. room, burden it management, and increase Device connectivity with iris is designed to the complexity and cost of care. Root with iris leverage existing network infrastructures and offers a built-in connectivity gateway that can reduce costs while enhancing workflows and integrate multiple standalone devices such as decision support to improve patient safety, iV pumps, ventilators, beds, and other patient whether the clinician is at the bedside, down monitors. iris allows device information to the hall, or across the globe. * iris is ce Marked. currently not available in the u.S. 108 108 109 eNHaNciNg PatieNt SaFety tHRougHout tHe HoSPital 110 110 111 Helping proTecT paTienTS From Hidden dangerS wiTH Spmet® Monitoring for unintended consequences of drugs commonly given in hospitals and during certain procedures. addreSSing THe riSk oF dangerouS that reduces the delivery of oxygen to the drug reacTionS tissues. While methemoglobinemia can Many drugs commonly used in hospitals occur in all care areas and patients, it is – such as lidocaine, benzocaine, dapsone, often unrecognized and undiagnosed. if not and nitrates – cause a dangerous reaction detected and treated immediately, it can known as acquired methemoglobinemia result in avoidable injury or death. Masimo noninvasive methemoglobin (SpMet) helps clinicians assess for methemoglobinemia, facilitating earlier detection and immediate treatment to reduce patient risk enabling Quick TreaTmenT wiTH Spmet Masimo noninvasive methemoglobin (SpMet) helps clinicians assess for methemoglobinemia especially in care areas where drugs that cause methemoglobinemia are used most often, such as procedure labs and the operating room. this enables them to quickly adjust exposure to the dangerous drug and initiate potentially life-saving treatment. 1 ash-bernal Ra et al. Medicine. 2004;83:265-273. “ acquired methemoglobinemia is fairly common and causes morbidity and mortality in both the inpatient and outpatient settings. acquired methemoglobinemia is often unrecognized and thus untreated.” rachel ash-bernal, md and other researchers at Johns-Hopkins Hospital, Baltimore, md medicaTionS known To cauSe meTHemoglobinemia Benzocaine, cetacaine, chloroquine, dapsone, emla topical, flutamide, lidocaine, metoclopramide, nitrates, nitric oxide, nitroglycerin, nitroprusside, nitrous oxide, Phenazopyridine (Pyridium), Prilocaine, Primaquine, riluzole, silver nitrate, sodium nitrate, sulfonamides preValence oF meTHemoglobinemia number of methemoglobinemia cases patient age care areas Fatalities 138 (2.5 cases per hospital per month) 4 days to 86 days surgery, intensive care, outpatient clinics, pediatrics, emergency department, cardiac cath lab 1 fatality 3 near fatalities results from a retrospective study at two Johns Hopkins Hospitals over a 28-month period, using laboratory co-oximeter results, and patient electronic medical records.1 112 112 113 113 proTecTing more paTienTS bY moniToring eVerY breaTH to expand the rainbow® platform’s promise of breakthrough noninvasive measurements, we have grown beyond our optically based technologies to include clinical measurements derived from sound. rainbow acoustic monitoring™ noninvasively and continuously measures respiration rate using an innovative adhesive cloth sensor with an integrated acoustic transducer that is easily and comfortably applied to the patient’s neck. rainbow acouSTic moniToring™ While we offer standard capnography allowing more paTienTS To be moniTored, continuous monitoring of respiration rate is solutions, we believe rainbow acoustic more SaFelY THan eVer beFore especially important for post-surgical patients Monitoring™ is better suited for post-surgical When rainbow acoustic Monitoring™ is receiving patient-controlled analgesia for monitoring and conscious sedation. used in conjunction with rainbow® Pulse pain management. co-oximetry and the Patient SafetyNet Masimo’s rainbow acoustic Monitoring™ system, clinicians can follow key indicators the anesthesia Patient Safety Foundation now provides noninvasive and continuous of oxygenation with industry-leading (aPSF) and the Joint commission respiration rate that has been shown to be Masimo Spo2; ventilation with breakthrough recommend continuous oxygenation and accurate, easy-to-use, and enhances patient acoustic respiration rate (RRa); circulation ventilation monitoring in all patients compliance.2 acoustic Respiration Rate (RRa) with Masimo Measure-through Motion receiving opioid-based pain medications.1 may help clinicians reliably and continuously pulse rate (PR); and hemoglobin levels conscious sedation can induce respiratory assess breathing – facilitating earlier detection with Masimo’s continuous and noninvasive depression and place patients at considerable of respiratory compromise and patient distress hemoglobin (SpHb) – enabling clinicians to risk of serious injury or death. However, – offering a breakthrough in patient safety for monitor more patients, more safely than current methods for respiration rate post-surgical patients on the general floor and ever before. monitoring are limited by patient tolerance. for procedures requiring conscious sedation. 1 Stoelting RK et al. APSF Newsletter. 2011. (www.apsf.org). 2 Macknet MR et al. Anesthesiology. 2007;107:a84. (abstract). 3 Ramsay M et al. Anesth Analg. 2013;Doi: 10.1213/aNe.0b013e318290c798. 4 Patino M et al. Paediatr Anaesth. 2013 Dec;23(12):1166-73. abiliTY To deTecT reSpiraTorY pauSe3 resPiraTiOn raTe MeThOd oridion capnostream Sara v4.5 masimo rainbow acoustic monitoring™ v7804 Sensitivity (respiratory pause detected when actual respiratory pause occurs) 62% 81% retrospective analysis of 33 pacu subjects. reference respiration rate determined by expert observer. a total of 21 episodes of respiratory pause were identified, defined as 30 seconds with no breathing activity. paTienT Tolerance4 capnography (oridion capnostream 20) rainbow acoustic monitoring™ Fifteen of 40 pediatric patients removed the nasal cannula while only one removed rainbow® acoustic sensor. 114 115 115 Helping improVe ouTcomeS on medical-Surgical FloorS wiTH maSimo paTienT SaFeTYneT in august 2012, the Joint commission Sentinel event alert on the safe use of opioids in hospitals recommended implementation of better dosing along with continuous oxygenation and ventilation monitoring (instead of spot checks) in post-surgical patients.1 Patient SafetyNet – combined with Masimo Set® pulse oximetry and rainbow acoustic Monitoring™ or standard capnography – offers a clinically proven, cost-effective approach to continuous postoperative monitoring with high nursing satisfaction and patient compliance. 0Patients Suffered Brain Damage or Died Over a 5-year Period† % 65Reduction in Rapid Response Team Activations % 48Reduction in ICU Transfers reducing reScueS and icu TranSFerS Set® and Patient SafetyNet remote monitoring the general floor, clinicians can be confident their For many years, clinicians have understood the and wireless notification system in a post-surgical patients are being watched even when they aren’t risks of not continuously monitoring patients floor where only intermittent spot-checking at the bedside, while families can be assured their on the general floor. However, excessive false was used before, Dartmouth-Hitchcock Medical loved ones are receiving maximum protection. alarms due to patient motion made improving center reduced rapid response activations by the safety of these patients an elusive goal. in 65% and icu transfers by 48%,2 and saved $1.48 proVen coST-eFFecTiVeneSS the last decade, Masimo Set® has been shown million annually. in addition, there were zero brain- When translated into financial impact, in multiple studies to improve the process of damaged patients over a 5-year period.3 Just as the Dartmouth-Hitchcock study showed Significant reductions in rapid response team activations and icu transfers were observed in an 11-month evaluation of Patient SafetyNet on a post-surgical unit. Rescue events decreased 65%, from 3.4 to 1.2 per 1,000 patient discharges, and icu transfers decreased 48%, from 5.6 to 2.9 per 1,000 patient days after implementation. the financial impact resulted in annual opportunity cost savings of $1.48 million. Results drove expansion of the use of Patient SafetyNet to other care areas.2, 3 care in neonates and pediatric patients due to pulse oximetry has become a standard of care that implementing Masimo Set® and reducing costs associated with emergency its Measure-through Motion and low Perfusion™ in the oR, Pacu, and icu, we now believe that Patient SafetyNet to more safely monitor rescue events.3 With both the clinical and performance. However, a landmark study in 2010 Measure-through Motion and low Perfusion™ post-surgical patients could also have a financial rationale now in place, hospitals showed that Masimo Set® also improves clinical pulse oximetry will become a standard of care on significant impact on the hospital’s bottom are increasingly implementing general floor outcomes in adults. after implementing Masimo the general floor. With Masimo technologies on line by increasing icu bed availability and monitoring with Masimo technologies. Halo index™* enableS aSSeSSmenT oF paTienT STaTuS Halo index is a new indicator for cumulative trending assessment of the global patient status. Physiologic deterioration often occurs long before a patient crisis and manifests through subtle and often undetected changes in multiple physiologic parameters. Masimo designed Halo index to mimic the systematic approach that expert clinicians use in assessing patient physiologic deterioration – analyzing the patient history and extracting key vital sign parameter characteristics to assess global patient status. Halo index currently uses available Masimo parameters but is scalable to include additional information from the patient data repository. each parameter’s significance is weighted and combined into the Halo index, a single displayed number with a range from 0 to 100 that provides a cumulative trending assessment of global patient status. increases in Halo index suggest physiologic deterioration and may indicate a need for clinicians to more closely assess the patient. 1 the Joint commission Sentinel event alert. 2012;49. 2 taenzer aH et al. Anesthesiology. 2010;112(2):282-287. 3 taenzer aH et al. anesthesia Patient Safety Foundation Newsletter. Spring-Summer 2012. * Halo index is ce Marked. currently not available in the u.S. Patient SafetyNet can display actual parameter values (above) or color-coded alarm states (left), which allows more patients to be viewed simultaneously on screen. in this example, Halo index indicates a declining patient condition while displaying parameter trends and their contribution (the size of the bubbles below the parameter) to the Halo index.* 116 † Since expansion, no patients suffered irreversible, severe brain damage or died as a result of respiratory depression from opioids over a 5-year period. 117 clinician-cenTric moniToring wiTH mYView™ MyView empowers clinicians to see things their way. the level of information required can change clinician, patient, and care area to provide dramatically by clinician and care area, but the parameters, waveforms, and trends that medical devices historically function in a clinicians want to see and what their patients static manner with the same parameters, and family see. While a physician may want to waveforms, and trends displayed the same see all parameters and waveforms, a medical way. While Masimo measurements and assistant may only want to see Halo index* display flexibility continue to expand, this or a few parameters and no waveforms. if no doesn’t mean that all clinicians need to clinician is in the room, the patient and family see all of the information in the same way. may be best served with no specific device MyView technology – featured in Masimo information, but rather a visual indicator with Patient SafetyNet – is being expanded a green, yellow, or red color indicating device to allow wireless sensing of the device, alarm status. MyView in Patient SafetyNet automatically senses when the physician approaches and highlights his or her patients for easy viewing. When no clinicians are in the room, the clinician may select a device display that is entirely green, yellow, or red—depending on the alarm status. this eliminates a common distraction for the patient and family while limiting unnecessary concerns or questions for caregivers. When the clinician re-enters the room, MyView recognizes the clinician and displays the measurements that interest the particular clinician. * Halo index is ce Marked. currently not available in the u.S. clinician-centric view with the use of a presence tag or smartphone allows caregivers to see the customized information most important to them upon approach to a patient. 118 118 119 eXPaNDiNg ouR iMPact beyoND tHe HoSPital 120 120 121 aS HealTHcare conTinueS To grow ouTSide THe HoSpiTal, So do we industry-leading Masimo technologies are increasingly being used to enhance the quality of patient care outside the hospital. a new leVel oF care in THe Home For pediatric patients requiring continuous monitoring at home, Masimo Set® offers advantages for parents caring for special needs children – dramatically reducing false alarms during motion and low perfusion that can complicate an already difficult situation. adding a SaFeTY neT in poST-acuTe care as hospital costs rise, more patients are receiving care in long term acute care and skilled nursing facilities. a major challenge in these facilities is weaning patients off ventilator care, which can put patients at increased risk of adverse events. Post-acute care facilities integrating Masimo Set® bedside pulse oximeters and Patient SafetyNet remote monitoring and notification systems have experienced considerable reduction in rapid response activations as well as emergency “transfer outs.” “the sensitivity and motion artifact rejection characteristics of the non-Masimo Set® pulse oximeters we tested were not adequate for a pediatric sleep laboratory setting.” bob brouillette, md Montreal children’s Hospital, Montreal, canada reliable Sleep lab moniToring During sleep lab monitoring, conventional pulse oximetry fails to provide the fidelity and accuracy required to help clinicians detect clinically relevant physiologic events. Masimo Set® technology is integrated in leading sleep lab monitoring systems, enabling clinicians and patients to benefit from its unmatched reliability in this challenging environment. “ Masimo technology has raised the bar in the quality of care that can be delivered in a post-acute setting – the right thing to do for patient safety.” gene gantt, rrT linde Respiratory Support Services 122 123 Quick and noninVaSiVe SpHb and Spo2 aSSeSSmenT the Pronto-7® is designed specifically for faster noninvasive total hemoglobin (SpHb) spot-check testing, along with Spo2, pulse rate, and perfusion index. a reVoluTionarY deVice For a 5” x 3” x 1” and weighing just 11 ounces – VarieTY oF clinical SeTTingS puts the power of noninvasive hemoglobin Hemoglobin is one of the most commonly ordered spot-check into any clinician’s hands in tests in both the hospital and non-hospital almost any environment, including hospitals, setting; however, traditional laboratory testing clinics, blood donation centers,* and and processes involve delayed results. the emergency medical services. Pronto-7 represents a breakthrough solution for noninvasively measuring hemoglobin and operation is easy and intuitive with the oxygen saturation together, in under a minute. Pronto-7’s touchscreen interface. embedded 802.11 b/g and bluetooth® capability enable SpHb is not intended to replace lab testing wireless printing or emailing of test results, but it can provide immediate and additional as well as transmission to eHR systems. in information to aid patient assessment. addition, new spot-checks can be downloaded the palm-sized Pronto-7 – approximately directly to the device. 1 de benoist b et al. Worldwide prevalence of anemia 1993-2005 WHo global Database on anaemia geneva. World Health Organization. 2 adams PF et al. current estimates from the National Health interview Survey, 1996. Vital Health Stat. 10.1999:1-203. * use in blood donation settings is ce Marked. Prior to using this device, the user should read and understand the operator’s Manual and Directions for use. laboratory diagnostic tests using blood samples should be conducted prior to clinical decision making to completely understand the patient’s condition. comparisons between SpHb measurements and laboratory diagnostic hemoglobin measurements may be affected by sample type, collection technique, physiological, and other factors. 124 124 125 immediaTe capnograpHY aT THe poinT oF paTienT conTacT emma™ – emergencY mainSTream analYzer seconds. the continuous capnograph allows for confirmation capnographs measure carbon dioxide (co2) concentrations and continuous monitoring of endotracheal tube placement, in expired gases. they are used during anesthesia, enables clinicians to assess the depth and effectiveness of emergency care, and intensive care—where capnography is compressions, and allows clinicians to recognize return of often used as a substitute for blood gas measurement or to spontaneous circulation (RoSc).1 its primary use is short- monitor the performance of assisted ventilation. eMMa is a term monitoring of end-tidal co2 and respiration rate in compact, portable, lightweight mainstream capnograph that adults, pediatric, and infant patients. requires virtually no warm-up time with full accuracy in 15 1 Neumar RW et al. Circulation. 2010;122:S729-S767. eMMa fits onto a breathing circuit, facilitating cPR “Monitoring respiratory rate and end-tidal carbon dioxide in the positive-pressure ventilated patient represents the greatest opportunity to avoid harm and improve clinical outcomes in all of resuscitation.” daniel davis, md Professor of clinical emergency Medicine, Director, center for Resuscitation Science, ucSD emergency Medicine, San Diego, ca 126 126 127 127 Helping clinicianS idenTiFY carbon monoxide poiSoning wiTH Spco® carbon monoxide (co) poisoning is the most common cause of poisoning in industrialized countries,1 but is often misdiagnosed because its symptoms are similar to the flu, and moderate poisoning is possible with no symptoms at all.2 a deadlY poiSon reVealed wiTH Spco our first rainbow® measurement was noninvasive carboxyhemoglobin (Spco), helping clinicians identify and assess co levels in the blood. a recent study at Medical university Vienna in austria assessed 32,396 emergency Department patients with Spco by Pulse co-oximetry. of 32 patients with a diagnosis of co poisoning, 22 (69%) would not have been identified without an elevated Spco measurement.2 in another study, researchers examined data from the undersea Hyperbaric Medicine Society’s co poisoning surveillance system (supported by the centers for Disease control) and found that patients who were initially measured using Pulse co-oximetry had an almost one-hour reduction in time from the end of co exposure to treatment.3 “We believe that all 50-plus people in the hotel would have been dead at dawn if it were not for this lifesaving intervention from Masimo.” Skip kirkwood, mS, Jd, emT-p chief, eMS Division, Wake county Dept. of emergency Services , Raleigh, Nc SaVing liVeS eVerY daY in emergency medical services, Spco is helping protect both victims and first responders from the dangers of co poisoning. Spco helps paramedics and emergency medical technicians to identify and assess co levels in the blood. Spco is also helping firefighters reduce the risk of co poisoning that they face every day. Just one severe co poisoning nearly doubles the risk of premature death, and consistent co exposure may cause long-term heart and brain damage.4,5 When even mild levels of co are circulating in the blood, the heart and brain are robbed of critical oxygen. this can cause mental confusion that leads to poor decision making and also increases the risk of heart disease or stroke – two conditions already accounting for nearly 50% of on-duty firefighter deaths.6 these factors are why industry-leading organizations have lined up to support co education, and the National Fire Protection association (NFPa) recently released an updated Fire Rehabilitation Standard (NFPa 1584) requiring firefighters exposed to smoke at incident scenes and during training to be assessed for carbon monoxide (co) poisoning. 1 unintentional non-fire-related carbon monoxide exposures - united States, 2001-2003. MMWR Murb Mortol Wkly Rep. 2005; 54:36-39. 2 Roth D, et al. Int J Clin Pract. 2014; 10.1111/ijcp.12432. 3 Hampson Nb. J Emerg Med. 2012 May 23. 4 Hampson Nb et al. Crit Care Med. 2009; 37(6): 1941-47. 5 bledsoe be. JEMS. 32:54-59, 2007. 6 bledsoe be. FireRescue Magazine. September 2005. “there is nothing more important in our profession than firefighter safety. the new 1584 standard builds on the older standard and more comprehensively addresses medical monitoring and carbon monoxide poisoning of the firefighter. i am excited to see this updated standard and that Masimo is at the forefront of making sure firefighters go home at the end of their shifts.” gary ludwig Fire chief of the champaign (ill.) Fire Department 128 129 leading THe mHealTH reVoluTion We are witnessing an exciting convergence of medical device until now no fingertip pulse oximeter has been available with Masimo Set® Measure-through and mobile device technology that promises to utterly Motion and low Perfusion™ pulse oximetry – the same technology used on more than 100 million transform healthcare. patients a year in leading hospitals worldwide. iSpo2® iS THe world’S FirST pulSe oximeTer For ioS and android mobile plaTFormS combining a Masimo “board-in-cable,” reusable or disposable sensor, and an application running on a smart phone or tablet device, iSpo2* feature Masimo’s proven Measure-through Motion and low Perfusion™ pulse oximetry – Spo2, pulse rate, and perfusion index. * For sports and aviation use only in the u.S. “this pulse oximeter is without a doubt the best one available for the consumer market. Masimo uses impressive digital signal processing combined with proprietary leD technology. if you need a serious pulse oximeter, this is the one to get.” kirk Shelley, md, phd Professor of anesthesiology, yale university New Haven, ct MightySat™* is available in three versions – each of which provides oxygen saturation (Spo2), pulse rate (PR), and perfusion index (Pi) measurements in a compact, battery-powered design with a large color screen that can be rotated for real-time display of the pleth waveform as well as measurements. optional bluetooth wireless functionality enables measurement display via a free, downloadable app on ioS and android mobile devices as well as the ability to trend and communicate measurements. and for those who want to use their pulse oximeter to evaluate another physiologic dimension, MightySat is the only fingertip pulse oximeter available with the optional Pleth Variability index (PVi), a measure of the dynamic changes in the Pi that occur during one or more complete respiratory cycles. * For sports and aviation use only in the u.S. “i would recommend Masimo’s MightySat to anyone interested in health and fitness – understanding what goes on inside your body is paramount to improving performance.” Stig Severinsen Ph.D. in medicine, four-time World champion freediver and owner of multiple guinness World Records, including history’s longest breath-hold of 22 minutes 130 130 131 Taking noninVaSiVe moniToring To all creaTureS greaT and Small We ramped up our animal Health business in 2013, offering veterinarians the same industry-leading monitoring solutions that have helped so many human patients. Masimo Set® monitors and sensors* at risk – during anesthesia-induced operating greatly enhance the accuracy of arterial procedures and post-operative recovery. oxygen saturation (Spo2) and pulse rate (PR) monitoring, particularly in the most innoVaTiVe capnograpHY proTecTS challenging conditions of motion and paTienTS From THe operaTing room low perfusion.1 Masimo Set® supports To recoVerY veterinarians in providing the highest level up to 60% of all post-surgical animal deaths of care – especially when their patients are occur in the post-operative setting. and 74% up to 60% of all post-surgical animal deaths occur in the post-operative setting. and 74% of these deaths are related to cardiovascular or respiratory problems. of these deaths are related to cardiovascular or respiratory m-lncS™ proVideS more SenSor opTionS THan problems.2 the eMMa capnograph is Masimo’s most anY SenSor and cable SYSTem cost-effective method for monitoring end-tidal co2 and can With multiple designs to serve the needs of all patient be used to help identify animals needing an intervention in types, M-lNcS sensors offer flexibility for improved cPR/resuscitation, during surgical procedures, and in post- patient monitoring from the operating table to the operative recovery. the water-resistant durable capnograph recovery room. the M-lNcS tc-i tip-clip ear Sensor also meets american animal Hospital association (aaHa) is suited for animals over 30 kg. guidelines for end-tidal co2 monitoring. With multiple designs to serve the needs of all patient types, M-lNcS sensors offer flexibility for improved patient monitoring from the operating table to the recovery room. 1 Shah N et al. J Clin Anesth. 2012 aug;24(5):385-91. 2 brodbelt D et al. Vet Ane and Anal. 2008; 35: 365-373. * animal Health products are pending Masimo quality system release. 132 133 SenSor Masimo provides a full line of reusable sensors for various clinical applications cable Rugged, durable design with reliable connectors for better performance TecHnologY look for Masimo Set® – the market leader in pulse oximetry – for accurate measurements during challenging conditions looKiNg FoRWaRD to tHe NeXt 25 yeaRS 134 134 135 perSpecTiVeS on THe FuTure From THe Founder and ceo, Joe kiani When Masimo was a garage start-up, more than two Masimo is well positioned for decades ago, i never imagined it would become a a future where healthcare and global company with more than half a billion dollars in medical technologies get pushed annual revenues and more than 3,000 employees. to home and mobile devices. as i reflect on the past 25 years, i am proud Masimo technologies also will be seen to a as people increasingly use at-home and even further with measurements from or “revolution via evolution” – has the of our accomplishments, yet i can’t help but greater extent outside clinical settings, as mobile devices to monitor themselves, other potential developers through ability to help unleash innovation that think: Maybe i should have dreamed bigger. the role of the “empowered patient” evolves. they’ll send results to their clinicians from Masimo open connect™ or Moc-9. will improve patient outcomes and safety, one of my core values is to never be content People are becoming more accountable for wherever they happen to be. Healthcare of while reducing the cost of care. with “good enough.” i’m always striving to their own healthcare, driven by policy and the future will be contextualized by almost Disruptive technologies that improve fix my sights higher, to set more challenging technology changes. Fortunately, Masimo is constant biofeedback, with wireless networks patient care don’t always come from large, i remember others in the medical device goals for my team and myself to accomplish well positioned for a future where healthcare and consumer devices for health monitoring well established companies. yet market industry – i won’t name names – literally more than before. and medical technologies get pushed to home creating a richer connection between patients barriers and development costs often laughed at me when i proposed this concept. it is not hubris to envision that within the next and mobile devices. and their caregivers. keep small, innovative companies from i’m mindful that proprietary mindsets had delivering their products to the clinicians essentially blocked Masimo from much of five to 10 years, Masimo technologies will be leveraging our well-earned reputation for in keeping with the theme of connectivity and patients who need them most. the uS market years ago. closed systems monitoring more than 200 million patients unprecedented performance and quality, we and empowerment, we will witness the With Root, Masimo is providing an open that fence off creative, more effective a year, as our products become ubiquitous will be unveiling more consumer and mobile Root® patient monitoring and connectivity invitation to other companies, from small technologies are marked relics. in healthcare settings and beyond. our monitoring technologies. armed with these platform continue to evolve and realize its to large, to develop and commercialize technology will expand and evolve to meet the and other devices, consumers will become full potential. Root is already available with their innovations through Masimo’s “open- by doing something like Root, Masimo future needs of healthcare, by helping improve more attuned to their physiology. We’ll see Masimo Set® pulse oximetry, capnography, innovation” Moc-9 platform. is lowering the hurdle for innovative surgical and post-surgical outcomes with people playing a larger, more proactive role noninvasive rainbow® parameters, brain technologies to get to the healthcare shorter lengths of stay. by better assessing with their healthcare, rather than merely function monitoring, and rainbow acoustic this seemingly incremental functionality market, lowering the cost of these monitors, patients we can help reduce the cost of care. being passive spectators of their “sick care.” Monitoring™. yet Root is designed to expand – part of a concept i call “microfixing” and in the end, saving even more lives. 136 137 i’m reminded of the personal computer saga. before the Pc, innovation is key to the future of healthcare. Without For example, you can dramatically improve patient safety computers were cold, massive, institutional machines housed innovation, we won’t find the cure to cancer or heart disease with today’s technologies. you don’t need new technology to in antiseptic rooms where only geniuses or highly specialized or alzheimer’s. We won’t have the solutions we hope will be eliminate the 200,000 preventable patient deaths in u.S. technicians were allowed to touch them. With the advent of the there for our kids. However, we need more than technology. hospitals—you need the will. Pc, computers became something everyone could play with. We see a compelling analogy with our Root platform. the thinking was that someone needed to do for patient monitoring what was done for computing. that is, make it accessible for other developers, create an open architecture to speed innovation, and deliver technologies at a lower cost. that’s why we were able to price Root at about the level someone would pay for a Pc – a couple thousand dollars instead of $10,000 or $15,000 – so it can become truly ubiquitous. Root also allows us to address interoperability in a more meaningful way. More than a dozen medical devices can be connected to a patient, but those devices are handicapped if they can’t communicate with each other. up to 80% of medical errors in hospitals involve communication problems between healthcare professionals. i believe many of these errors could be avoided if devices could “talk” to each other, and even shut each other off or alarm when a measurement on another product is approaching a dangerous level. Restrictive business agreements are a barrier to interoperability therapeutic devices, and it infrastructure all together and, again, an outdated strategy for med tech companies with intelligent, predictive algorithms in this Patient Data to make more money. information-blocking practices harm Superhighway, then physicians, along with patients and their patients. We can envision a day, hopefully soon, when providers families, could be informed of dangerous trends; more lives only buy devices that share data, particularly when taxpayer could be saved; and the process of care could be improved dollars are involved. substantially, further reducing cost. likewise, data accessibility is the companion of device once again evoking the empowerment of patients, they interoperability – and both are essential to create a Patient should also be able to access their own health information Data Superhighway. this highway would securely house a from medical devices. the Health information technology for patient’s complete electronic medical history and would economic and clinical Health (HitecH) act of 2009 states be populated with real-time information from vital-signs that eligible professionals “provide patients with an electronic monitors, labs and other sources. if we bring monitors, copy of their health information upon request.” it’s a laudable innovation is key to the future of healthcare. improving patient safety can be done with today’s technologies. you don’t need new technology to eliminate the 200,000 preventable patient deaths in u.S. hospitals. 138 139 Human warmth, tenderness, and understanding are key ingredients to a more humane and more effective healthcare system. requirement. but it should be done as a matter of course and should include empathy and love are not just for doctors and nurses. Medical technology easy-to-understand data from medical devices. executives, engineers, health insurance providers, even the orderlies, those who deal with hospital linens, and, of course, patients, need to find room We know that a lack of meaningful communication and information sharing in their hearts for love. the best medical treatment comes when those among medical technologies, clinicians and patients contributes to poor providing care love what they do and for whom they do it. patient outcomes. Patients who know in layman’s terms how their devices are programmed, function and interact with their healthcare would be better if we are to reach a goal of mine – articulated through the Patient Safety able to communicate with caregivers. greater communication throughout Movement Foundation we created in 2012 – to eliminate preventable patient the healthcare ecosystem is key. implicit in that is something that too often deaths by 2020, then innovative technologies, open engineering architecture, is neglected in healthcare discussion and debates. and that is empathy and data accessibility and the Patient Data Superhighway, and last but not least, love. i disagree that empathy and emotion do not have a place in healthcare. love, will have to become part of our healthcare system of the future. Human warmth, tenderness and understanding are key ingredients to a more humane and more effective healthcare system. Masimo is here to help make that happen. that’s what i mean by dreaming big. Joe kiani Chairman & CEO 140 140 141 141 SeNioR MaNageMeNt teaM From left to right: Tetsuro maniwa, President, Masimo Japan; Stacey Taggart, President, europe, Middle east & africa; mark de raad, executive Vice President & chief Financial officer; paul Jansen, executive Vice President, business Development; Jon coleman, President, Worldwide Sales, Professional Services & Medical affairs; rick Fishel, President, Worldwide oeM business and blood Management; Joe kiani, chief executive officer; Yongsam lee, executive Vice President, chief information officer; Tom mcclenahan, executive Vice President, general counsel; anand Sampath, executive Vice President, engineering & chief operating officer; robert zyzanski President, Masimo Sweden board of directors (not pictured): Joe kiani, chairman of the board of Directors; Steven barker, MD, PhD; robert coleman, PhD; Sanford Fitch; Jack lasersohn; craig reynolds 142 143 aPPeNDiX 6 coNtiNeNtS HaVe MaSiMo tecHNologieS OEM OEM masimo is integrated in more masimo is integrated in more industry-leading products than any industry-leading products than any other pulse oximetry technology other pulse oximetry technology 144 144 145 TecHnologieS and producTS MoNitoRS eXteRNal MeaSuReMeNt tecHNologieS PatieNt SaFetyNet™ SySteM iSpo2® Spo2, PR, Pi uSpo2® Spo2, PR, Pi mightySat™ Spo2, PR, Pi, PVi emma™ Portable mainstream capnometer pronto-7® rainbow® 4D with SpHb® spot-check with wireless communication rad-5v® Masimo Set® radius-7™ Patient-worn monitor radical-7® complete rainbow® Pulse co-oximetry, rainbow acoustic Monitoring™, upgradeable, color touchscreen display, standard wireless radio, MyView™ root® complete rainbow® Pulse co-oximetry and rainbow acoustic Monitoring™, upgradeable, touchscreen, standard wireless radio, MyView™, Moc-9™, iris™ Shown with Radius-7™ rad-8® Masimo Set®, leD display pronto® rainbow Set® with SpHb® spot-check rad-57® rainbow Set® Pulse co-oximetry iSa™ Sidestream capnography and gas Monitoring Sedline® brain Function Monitoring o3™ Regional oximetry patient Safetynet remote monitoring and notification System > Direct alarms to nurse via pager > MyView™ for clinician-centric monitoring > iRiS for 3rd party device integration > open architecture with Hl7 interface to hospital eHR tecHNologieS aND PaRaMeteRS ciRcuit boaRDS SeNSoRS Measure-through Motion and low Perfusion™ pulse oximetry Noninvasive blood constituent and fluid responsiveness monitoring Noninvasive respiratory monitoring > end-tidal carbon Dioxide (etco2) > acoustic Respiration Rate (RRa®) > Fractional concentration of inspired carbon rainbow® pulse co-oximetry rainbow acoustic monitoring™ capnography and gas monitoring > Functional oxygen Saturation (Spo2) > Pulse Rate (PR) > Perfusion index (Pi) > Pleth Variability index (PVi®) > Respiration Rate from the Pleth (RRp™) > carboxyhemoglobin (Spco®) > Methemoglobin (SpMet®) > total Hemoglobin (SpHb®) > oxygen content (Spoc®) > Fractional oxygen Saturation (Spfo2™) > oxygen Reserve index (oRi™) > Plus all Masimo Set® measurements brain Function monitoring Noninvasive depth of sedation monitoring > Patient State index (PSi) See Regulatory Notice 146 Dioxide (Fico2) > Respiration Rate (RR) > Nitrous oxide (N2o) > oxygen (o2) mS-2011 mS-2040 > inhalation anesthetic agent identification (agent iD) mS-2013 mx-5 masimo SeT® Sensors Spo2, PR, Pi, PVi® rainbow® SeT Sensors SpHb®, Spoc®, Spco®, Spfo2™, SpMet®, Spo2, PR, Pi, PVi® rainbow® acoustic Sensor RRa® Sedline® Sensor PSi nasal cannula mainstream adapter 147 caNNulaS aND aDaPteRS nomoline™ low humidity Multi- patient use adapter o3™ Sensor rSo2 and Spo2 nomoline™ High humidity Multi-patient use adapter naTional and inTernaTional awardS For excellence SelecT oem parTnerS masimo set® is integrated in more than 100 oem monitors from 50 leading brands. In addition, more and more of our oem partners are enhancing the capabilities of their monitoring solutions by integrating rainbow® technology. BECKER’S Hospital Review 2000 technology excellence 2013 best clinical application of technology award for SpHb 2014 top 50 leaders in Patient Safety 2014 Hubert H. Humphrey “Dawn of life” award 1995 excellence in technology innovation for Measure- through Motion and low Perfusion Pulse oximetry 2006 Medical Design excellence 2009 Zenith award American Association for Respiratory Care 2000 outstanding Medical Device company 2007 excellence in technology innovation for Noninvasive total Hemoglobin Monitoring 2001 innovative Product and technology 2007 groundbreaking innovation of rainbow® Set 2001 Distinguished leadership 2001 Medical Design excellence 2003 New Standard of care 2003 technology of the year in Patient Monitoring 2003 Platform abby for innovations in Healthcare 2005 innovative Product and technology 2006 application of technology for Noninvasive Methemoglobin and carboxyhemoglobin Monitoring 2007 Patient Monitoring technology leadership of the year 2008 excellence in Medical technology 2008 outstanding growth 2008 outstanding Medical Device company 2008 best in class 2008 Zenith award American Association for Respiratory Care 2009 Patient Monitoring ceo of the year 2009 Masimo Set® and Patient SafetyNet help Dartmouth-Hitchcock Medical center win the 4th annual Health Devices achievement award 2010 Respiratory Product best-in-class award 2011 Product Design award for the Pronto-7 2011 WINNER 2011 Medical Design excellence gold for the Pronto-7 2011 High-tech innovation for the Pronto-7 2012 National entrepreneur of the year life Sciences award Winner 2012 gold “Stevie” award for best New Health Product for the Pronto-7 OEM OEM masimo is integrated in more masimo is integrated in more industry-leading products than any industry-leading products than any other pulse oximetry technology other pulse oximetry technology 2009 best in class 2013 Hot Product award for eMMa and iSpo2 148 149 149 maSimo’S global reacH Masimo is committed to improving patient care globally, with over 3,000 talented people worldwide and operations in North america, europe, latin america, the Middle east, asia, and australia. HeaDQuaRteRS iNteRNatioNal oPeRatioNS MaNuFactuRiNg ceNteRS corporaTe HeadQuarTerS 52 Discovery irvine, ca 92618 uSa tel: 949 297 7000 inTernaTional HeadQuarTerS Puits-godet 10 2000 Neuchâtel Switzerland tel: +41 327201111 couNtRy oFFiceS ThE AMERICAS canada 4878 levy Saint-laurent Qc H4R 2P1 canada tel: 888 336 0043 laTin america / mexico Paseo de la Reforma 404 Piso 6 – 602 edificio Moncayo col. Juárez México, D.F. 06600 México Delegación cuauhtémoc tel: +5255 5511-2799 ASIA aSia paciFic 31 ubi Road 1 #04-05 Singapore 408694 tel: +65-6521-6700 cHina Room 502, Suite e triumph tower bldg. 6 170 beiyuan Rd beijing 100101 china tel: +86 1058236155 india 70/2 Miller’s Rd Miller’s boulevard, 2nd Floor bangalore 560052 Karnataka State india tel: + 1 800 425 MaSiMo Japan Sumitomo Fudosan Korakuen bldg. 17F 1-4-1, Koishikawa, bunkyo-ku tokyo 112-0002 Japan tel: +81 338685201 AuSTRALIA auSTralia abN 71 124 372 701 Suite 3, bldg. 7 49 Frenchs Forest Rd Frenchs Forest, NSW 2086 australia tel: +61 294523763 EuROPE auSTria Meldemannstr. 18 1200 Wien austria tel: +43 (0) 1 533 73 61 uM u.S. manuFacTuring 40 Parker irvine, ca 92618 uSa mexico manuFacTuring calzada Del oro No. 2001 Modulo-6, Mexicali, 21395 Mexico 6 coNtiNeNtS HaVe MaSiMo tecHNologieS uM France espace européen d’ecully bat g 15 chemin du Saquin 69130 ecully France tel: +33 0472 179370 germanY Niederlassung Deutschland lindberghstr 11 82178 Puchheim germany tel: +49 89800658990 iTalY Via Filzi 33 20124 Milano italy tel: +39 0245076308 neTHerlandS Hart van brabantlaan 12-14-2016 5038 Jl tilburg Netherlands tel: +31 135832479 Spain Ronda de Poniente 12 2F 28760 tres cantos Madrid Spain tel: +34 918049734 TurkeY Mustafa Kemal Mah. 2125. Sok Kolbay is Mrk c blok No:6/10 Sogutozu ankara turkey tel: +90 312 219 54 38 uk unit Q, loddon Matrix House, basing View basingstoke. Hants. Rg21 4DZ united Kingdom tel: +44 (0)1256 479988 MIddLE EAST middle eaST offices 505-508 Manhal center Manhal Square, Jubaiha amman Jordan tel: +962 7 9701 1135 SubSiDiaRieS maSimo SemiconducTor 25 Sagamore Park Rd Hudson, NH 03051 uSa tel: 603 595 8900 134 couNtRieS HaVe Masimo Set® maSimo Sweden ab Svärdvägen 15, 182 33 Danderyd Sweden tel: +46 8 544 98 150 tHiRD PaRtieS maSimo diSTribuTorS maSimo oemS 59 oeM PaRtNeRS WoRlDWiDe 21 couNtRy oFFiceS WoRlDWiDe oVeR 330 DiStRibutoRS WoRlDWiDe 3,000 MaSiMo eMPloyeeS WoRlDWiDe 150 151 2014 FiNaNcialS Financial perFormance condensed consolidated Statements of income (unaudited) (in thousands, except per share information) reVenue Product Royalty total revenue cost of goods sold gross profit operating expenses: Selling, general and administrative Research and development litigation award and defense costs total operating expenses operating income Non-operating expense income before provision for income taxes Provision for income taxes Net income including noncontrolling interest Net income (loss) attributeable to noncontrolling interest Net income attributable to Masimo corporation stockholders Net income per share attributable to Masimo corporation stockholders: basic Diluted Weighted-average shares used in per share calculations: basic Diluted YEAR EndEd: January 3, 2015 december 28, 2013 $556,764 29,879 586,643 195,864 390,779 241,016 56,581 (10,331) 287,266 103,513 1,472 102,041 27,678 74,363 1,845 $72,518 $1.33 $1.30 54,708 55,571 $517,429 29,816 547,245 188,418 358,827 215,469 55,631 8,010 279,110 79,717 3,991 75,726 20,005 55,721 (2,660) $58,381 $1.03 $1.02 56,690 57,480 152 152 153 Financial perFormance condensed consolidated balance Sheets (unaudited) (in thousands) aSSeTS current assets: cash and cash equivalents accounts receivable, net inventories Prepaid income taxes other current assets Deferred income taxes, current total current assets Deferred cost of goods sold Property and equipment, net intangible assets, net goodwill Deferred income taxes, noncurrent other assets total assets January 3, 2015 december 28, 2013 liabiliTieS and eQuiTY January 3, 2015 december 28, 2013 $134,453 $95,466 accounts payable current liabilities: 71,017 69,718 417 21,471 18,065 315,141 67,485 101,952 27,771 20,979 24,193 7,485 76,759 56,813 3,740 19,384 19,636 accrued compensation accrued liabilities income taxes payable Deferred revenue current portion of capital lease obligations 271,798 total current liabilities 61,714 Deferred revenue 24,866 long term debt 28,104 other liabilities 22,793 total liabilities 22,565 commitments and contingencies 6,822 equity: $565,006 $438,662 Masimo corporation stockholders’ equity: common stock treasury stock additional paid-in capital accumulated other comprehensive (loss) income Retained earnings total Masimo corporation stockholders’ equity Noncontrolling interest total equity total liabilities and equity $38,045 33,600 24,541 6,562 21,067 79 123,894 453 125,145 7,773 257,265 52 (185,906) 288,686 (2,093) 205,260 305,999 1,742 $307,741 $565,006 $28,004 29,486 23,028 2,406 20,755 111 103,790 566 225 7,680 112,261 57 (83,454) 273,129 3,995 132,742 326,469 (68) $326,401 $438,662 condensed consolidated Statements of cash Flows (unaudited) (in thousands) YEAR EndEd: YEAR EndEd: caSH FlowS From operaTing acTiViTieS January 3, 2015 december 28, 2013 caSH FlowS From inVeSTing acTiViTieS Net income including noncontrolling interest $74,363 $55,721 Purchases of property and equipment borrowings under revolving line of credit 125,000 adjustments to reconcile net income including noncontrolling interest to net cash provided by operating activities: Depreciation and amortization Share-based compensation loss on disposal of property and equipment Provision for doubtful accounts benefit from deferred income taxes income tax benefit from exercise of stock options granted prior to January 1, 2006 excess tax deficit from share-based compensation arrangements changes in operating assets and liabilities: Decrease (increase) in accounts receivable increase in inventories increase in deferred cost of goods sold Decrease (increase) in prepaid income taxes increase in other assets (Decrease) increase in accounts payable increase in accrued compensation increase in accrued liabilities increase (decrease) in income taxes payable increase in deferred revenue increase (decrease) in other liabilities 12,818 11,005 368 583 (320) 264 396 4,862 (13,434) (5,888) 3,316 (2,619) (1,375) 4,948 1,837 3,909 199 227 increase in intangible assets Net cash used in investing activities caSH FlowS From Financing acTiViTieS 11,421 11,674 249 728 (8,613) Debt issuance costs 693 Repayments on capital lease obligations Proceeds from issuance of common stock excess tax deficit benefit from share-based compensation arrangements Repurchases of common stock Repurchases of equity by noncontrolling interest, net of equity issued Net cash provided by (used in) financing activities effect of foreign currency exchange rates on cash Net increase (decrease) in cash and cash equivalents cash and cash equivalents at beginning of period cash and cash equivalents at end of period 1,308 (9,576) (9,453) (9,594) (1,660) (756) 1,238 4,557 6,406 (381) 1,467 (842) Net cash provided by operating activities 95,459 54,587 January 3, 2015 (75,061) (3,353) (78,414) december 28, 2013 (9,360) (3,926) (13,286) (436) (111) 4,680 (396) (102,453) (38) 26,246 (4,304) 38,987 95,466 $134,453 ––– ––– (132) 3,289 (1,308) (19,790) ––– (17,941) 552 23,912 71,554 $95,466 154 155 Forward-looking STaTemenTS all statements other than statements of our dependence on Masimo Set® and Masimo of intangible assets we have recorded; the any obligation to update, amend or clarify historical facts included in this document that rainbow® Set® products and technologies maintenance of our brand; the amount and these forward-looking statements, whether address activities, events or developments for substantially all of our revenue; any type of equity awards that we may grant as a result of new information, future events that we expect, believe, or anticipate will or failure in protecting our intellectual property to employees and service providers in the or otherwise, except as may be required under may occur in the future are forward-looking exposure to competitors’ assertions of future; our ongoing litigation and related applicable securities laws. statements. Forward-looking statements intellectual property claims; the highly matters; and other factors discussed in the include statements which are predictive competitive nature of the markets in which “Risk Factors” section of our most recent noTe regarding THiS annual reporT in nature, which depend upon or refer to we sell our products and technologies; any periodic reports filed with the Securities and Please note that this annual report does not future events or conditions, which include failure to continue developing innovative exchange commission (“Sec”), including our constitute the company’s “annual report words such as “expects,” “anticipates,” products and technologies; the lack of most recent annual Report on Form 10-K, to security holders” for purposes of the “intends,” “plans,” “believes,” “estimates” or acceptance of any of our current or future Quarterly Reports Form 10-Q and current requirements of the Sec. For a copy of the similar expressions. these forward-looking products and technologies; obtaining Reports on Form 8-K, all of which you may company’s annual report to security holders statements are based on management’s regulatory approval of our current and future obtain for free on the Sec’s website at required under Rule 14a-3 of Regulation 14a current expectations and beliefs and are products and technologies; the risk that www.sec.gov. although we believe that the of the Securities exchange act of 1934, as subject to uncertainties and factors, all the implementation of our international expectations reflected in our forward-looking amended, please refer to the company’s annual of which are difficult to predict and many realignment will not continue to produce statements are reasonable, we do not know Report on Form 10-K for the fiscal year ended of which are beyond our control and could anticipated operational and financial benefits, whether our expectations will prove correct. January 3, 2015, which you may obtain for free cause actual results to differ materially including a continued lower effective tax you are cautioned not to place undue reliance on the Sec ‘s website at www.sec.gov. and adversely from those described in the rate; the loss of our customers; the failure on these forward-looking statements, which forward-looking statements. these risks to retain and recruit senior management; speak only as of the date hereof, even if include, but are not limited to, those related product liability claims exposure; a failure to subsequently made available by us on our to: actual foreign currency exchange rates; obtain expected returns from the amount website or otherwise. We do not undertake 156 157 VEnIMuS, VIDIMuS, VICIMuS Masimo • 52 Discovery • irvine, ca 92618 • tel: +41 32 720 1111 © 2015 masimo. masimo, set, rainbow, rainbow acoustic monitoring, rainbow 4d, rainbow resposable, 3d desat Index alarm, adaptive Probe off detection, aPod, Blue, dcI-mini, dos, dst, e1, emma, eve, fastsat, fst, Halo Index, Iris, Irma, Isa, ispo2, ispo2 rx, lncs, lnoP, masimo open connect, masimo Patient safetynet, measure-through motion and low Perfusion, mightysat, m-lncs, moc-9, ms-1, ms-2011, ms-2013, ms-2040, mst, mX-1, mX-3, mX-5, myview, nomoline, o3, orI, Phasein, Pronto, Pronto-7, Pulse co-oximeter, Pulse co- oximetry, PvI, rad-5, rad-57, rad-5v, rad-8, rad-87, rad-9, radical, radical-7, radius-7, ram, ras, root, ros, rra, rrp, satshare, sedline, signal extraction technology, signal I.Q., smartone ,softouch, spco, spfo2, spHb, spmet, spoc, sst, tfa-1, uspo2, X-cal, Improve patient outcomes and reduce the cost of care by taking noninvasive monitoring to new sites and new applications, and closer to the Heart are trademarks, registered trademarks, or service marks of masimo corporation. all rights reserved. apple, iPhone, iPad, iPod, and iPod touch are registered trademarks of apple Inc. registered in the u.s. and other countries. Ios is a trademark or registered trademark of cisco in the u.s. and other countries and is used under license. android is a trademark of Google Inc. all other products, logos, or company names mentioned herein may be trademarks and/or registered trademarks of their respective companies. 6800-8752a-0215 

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