or, Capitalism Does Have a Heart
Stuart K. Hayashi
The following is a section of the longer essay, “How Billionaires and Capitalism Save Billions of Lives — Including Yours.” That essay includes an index listing various case studies of a for-profit initiative saving lives. The blog post below is of at least one such case study. You can return to that index here.
State University of New York.
Medical treatments such as vaccines, cancer drugs, and genetically engineered insulin are not the only lifesavers. Medical devices matter as well. Cardiac patients have benefited greatly from the feats of C. Walton Lillehei, Earl Bakken, Manuel “Manny” Villafaña, Wilson Greatbatch, and Kurt Amplatz.
Lillehei was a cardiac surgeon who dreamed of performing various new types of operations. But the technology that would allow him to do this in a manner safe for the patient did not yet exist. In the 1950s, he therefore sought out help to create it.
One issue with cardiac surgery was that to operate safely on the heart, the surgeon had to cut off its blood flow — the very same blood flow that had to continue in order for the patient to stay alive. The maneuver by which get around this seeming Catch-22 was for an object outside of the patient’s chest cavity to act as a temporary substitute performing the functions normally performed by the heart and lungs. Lillehei theorized that this object should be another person. This
would be an anesthetized “donor” temporarily donating his or her own body, whose heart and lungs would be pumping blood and oxygen for two people instead of one as the procedure commenced. This was to be known as “extracorporeal” — outside-the-body — “circulation” of the blood “by cross-circulation.”
In the first such experimental surgery in 1954, Lillehei operated on a little boy with the boy’s father in the room being the donor. The first several surgeries caught the medical community’s attention, but the procedure would always be dangerous. Still, the precedent Lillehei set inspired other innovators to search for improvements.
Lillehei intended for his method to be an alternative to what was still an even riskier one — John Gibbons’s heart-lung bypass machine. Here, during the operation the patient would be attached to a giant machine — one bigger than the patient and occupying much of the room — that would be doing the work of the heart and lungs. Fortunately, another loner named John Kirklin made significant improvements upon this contraption, especially shrinking it down.
For Lillehei’s part, he continued refining as well. With Dr. Richard DeWall, he introduced the first clinically successful bubble oxygenator in such an operation. This was a device that helped the patient continue to receive enough oxygen, and it was used for decades until replaced by the membrane oxygenator in the 1980s. And Lillehei noted other dangers to the patient during heart operations. The patient could suffer from brain death if blood did not flow at a fast enough rate. To mitigate this, Lillehei
induced mild hypothermia on the patient. When in this state, the patient’s brain could survive as blood flowed more slowly. And Lillehei
also pioneered with the technique of “hemodilution,” reducing the quantity of donor blood that would need to be transfused.
Heart-lung bypass machine improver John Kirklin made a database of the mortality rate from open-heart surgeries that he performed. In 1955, just a year following Lillehei’s groundbreaking cross-circulation surgery, that rate remained a terrifying 50 percent. But in 1956 that figure had dropped to 20 percent and, by 1957, it was 10 percent. Today, the figure is less than 5 percent and almost all deaths from the surgery were from patients who were already at that high a risk. (The figures are from pages 86–87 of
this book.)
Much of Lillehei’s success came from knowing when to ask for help. He received it from two entrepreneurs as they acted as competitors to one another — Earl Bakken and Manny Villafaña.
Lillehei wanted to ensure that, subsequent to their operations, his patients’ hearts would continue to function. A recurring issue was one of heart block. This
was when the heart’s lower chambers failed to receive the electrical pulses they needed from the heart’s higher two chambers.
Lillehei surmised that if the upper chambers could no longer supply the vital electrical impulses, a human-made contrivance would have to do the job instead. This necessitated someone knowledgeable about electricity. For such a gizmo, he turned to a then-inexperienced engineer named Earl Bakken. Bakken figured he would have to start a company of his own to manufacture such devices. As a show of confidence, Lillehei invested $15,000 in it at its start, gaining major ownership of its stock.
With the resources that Lillehei provided him, in 1957 Bakken invented the first wearable pacemaker. This machine would remain outside of the patient’s chest cavity and have to be hooked onto the clothing. Lillehei had the honor of being the first doctor to attach Bakken’s pacemaker to someone.
Bakken’s company would become the multi-billion-dollar, publicly traded Medtronic of Minnesota. The initial $15,000 that Lillehei put in had gained in value. When Lillehei sold his stock in it in 1974, he netted over a million dollars from it. (
Page 32.)
Eventually retiring in my home state of Hawaii, Bakken got rich enough
to donate “millions of dollars” to various health- and education-related charities.
Not everyone who worked for Bakken was happy with him, though. A disgruntled employee — Manuel “Manny” Villafaña — left Medtronic to start his own ventures. Fortunately, Lillehei’s gratitude to Bakken did not preclude him from collaborating with this upstart entrepreneur. Villafaña was a go-getter who was born in New York City to Puerto Rican immigrant parents and who was over twenty years Lillehei’s junior.
Often, parts of a cardiac patient’s heart would have to be replaced. Villafaña founded St. Jude Medical to get to the bottom of this. Lillehei acted as a consultant to this company as it designed the artificial bi-leaflet heart valve. For his services, he was paid in still more stock. The company’s sale enriched Lillehei still further. And it commensurately enriched the ethnic Puerto Rican entrepreneur.
According to the Minnesota Science and Technology Hall of Fame, “An estimated 250,000 patients each year receive a medical device produced by a company that Manny Villafana founded.”
This was where yet another innovator, Wilson Greatbatch, arrived. Whereas Bakken’s pacemaker had to be worn on the clothing, Greatbatch’s could be implanted into the body.
It was a fortuitous accident that inspired Greatbatch. In the 1950s, he was employed at Cornell University’s animal farm. He spent his time attaching machines to sheep and goats that monitored their brain waves, heart rates, and blood pressure. In a barn, he assembled these monitors by hand. One day, he absent-mindedly installed a resistor into his machine. That triggered a response in which the machine alternated between electrically pulsing for 1.8 milliseconds and then pausing for one second. This, by coincidence, matched the beating of human hearts.
This same decade, two cardiac surgeons had visited Cornell’s farm to observe the research performed on the animals. Greatbatch overheard them discussing the recurring complication of heart block. Whereas many other people would have written off the old mistake with the resistor as a past annoyance and forgotten about it, Greatbatch
drew a mental connection between that incident and the dilemma vexing the surgeons. The accident was the lead that he pursued.
Greatbatch worked on his implantable pacemaker from 1958 to 1960, spending his life savings of $2,000 throughout the struggle. Nothing about this was easy. And he long believed that heavier government regulation would have made his feat even more difficult to achieve. In an interview conducted in 1988, he
remarked,
The problem for a small inventor today is the FDA. So many laws have been written that a small operator can’t do something like a pacemaker. The regulations are so complex and the required testing is so expensive that a small company can’t do it. . . . If I did today what I did twenty years ago, I would go to jail. Imagine making pacemakers in a barn and taking them to a hospital and putting them into patients! But we did it, and it worked. It was done very ethically, and a lot of people are alive today because of that work.
When it came to finding a firm to manufacture units of this invention, Greatbatch first approached Medtronic. Given the very machine that launched the company, this seemed a natural fit. Ironically, Medtronic ultimately rejected Greatbatch’s model. He then pitched his creation to one of Manny Villafaña’s corporations — Cardiac Pacemaker, Inc. (CPI).
Villafaña accepted his offer. Lillehei served as a consultant here as well, and helped work out the bugs. As with St. Jude Medical, this other Villafaña outfit paid Lillehei in still more shares. When Villafaña sold Cardiac Pacemaker to Eli Lilly, Lillehei
banked an additional $2 million.
As ScienceHeroes.Com
determines, Greatbatch’s work saved over 22.5 million lives.
And, as a consequence of this lifesaving, Greatbatch’s pocketbook was not in poor condition either. The
New York Times states, “Mr. Greatbatch profited handsomely from his invention and invested” in refining it to making models that were even safer. Subsequent to the success of his first pacemaker model, Greatbatch wanted to develop a more reliable means of powering the device. He found that in the form of a lithium-iodide battery in 1972.
Greatbatch’s profit was such magnitude
that his estate could bequeath $10 million for the restoration of the pavilion of a historical landmark, the Darwin D. Martin House Complex.
We commonly hear it said that the provision of healthcare to those who are in need, such as having pacemakers implanted into their bodies, is more important than the entrepreneur’s freedom to enterprise and keep the profit that motivates them. And, the contention continues, if provision of pacemaker implantations and other healthcare to the needy means violation of the entrepreneur’s freedom to enterprise and keep the profit, then so be it. Too often overlooked is that if the State had been too severe in restricting that freedom to enterprise and profit, entrepreneurs would not have been willing or able to invent pacemakers in the first place.
Working in a similar vein was Austrian-born Kurt Amplatz, yet another doctor in Minnesota. An added major heart problem was atrial septal defect in infants. The atria — the upper chambers of the heart — are supposed to be divided by a septum that closes. When the septum cannot close, the baby’s life is in a precarious state. To mitigate this risk and separate the atria artificially, Amplatz invented Amplatzer Septal Occluder and Amplatzer Cribriform Occluder. In 1958, he was able to insert these devices into an infant.
As he was able to do this using a catheter, open-heart surgery was not required. To market this medical device, he cofounded the company AGA Medical and earned over 100 U.S. patents. In 2010, the same St. Jude Medical that Manny Villafaña started had purchased AGA Medical for $1 billion. The extent of the wealth that Amplatz amassed can be discerned by how, in 2009, his daughter
turned over $50 million to the University of Minnesota Children’s Hospital.
Return to index of case studies of lifesaving for-profit ventures.
