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ClearCount Medical Solutions' SmartSponge System

Updated: 5:15 p.m.

PITTSBURGH, Pennsylvania — ClearCount Medical Solutions, developing technology so no one leaves a surgical sponge where it doesn’t belong, is the latest Pittsburgh company to receive the steady drizzle of venture funding raining on the city.

The 5-year-old business said it closed on $3.4 million of financing, led by Draper Triangle Ventures. It will use the money to drive sales and further develop an RFID-based solution to keep track of surgical devices. ClearCount Chief Executive Officer David Palmer said the company wants to continue research on its sponge tracking and location system to lower its cost, while also expand its technology to work with certain surgical tools.

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“We will continue to build and expand on our RFID platform in the operating room,” Palmer said.

Companies like ClearCount — and a Minnesota competitor, SurgiCount Medical — think they can help eliminate “never events,” such as instruments left behind during surgery, which are no longer reimbursed by many insurers as well as the Centers for Medicare and Medicaid Services. Leaving a surgical sponge inside a person can cost more than $200,000 in liability costs, according to some studies.

While these companies have gained traction, health systems are still trying to determine the most cost-effective technology to track sponges and other tools. A simple counting procedure detects 82 percent of sponges left behind, according to a May article in Surgery.

ClearCount uses RFID technology to constantly track sponges — up to 80,000 counts per procedure, the company state. But it also claims to be the only system that will find a sponge once its discovered missing. The system includes a wand medical staff wave around an operating room to locate the missing sponge.

“We answer the question, ‘What do you do once the count is off?’ ” Palmer said.

ClearCount won its FDA approval in 2007 and in less than a year cinched a deal with Cardinal Health to distribute its sponge. ClearCount previously closed on $4.1 million of private equity in October 2008, which was also lead by Draper. Palmer expects another equity round in about a year’s time.

ClearCount is the sixth Pittsburgh company in the last month to announce a raise and there are about 30 medical companies out raising for money.