Is Robotic Surgery Cheaper?

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Stanford surgery professor Catherine Mohr tends to look at things her own way. In a recent TED talk about building green, she presented hard numbers to dispel some hype. In the following guest post, Mohr works through the economics of her own speciality: robotic surgery. Granted, she has a horse in this race: Mohr is also director of medical research at Intuitive Surgical, which produces surgical robots.

Is Robotic Surgery Cheaper?
By Catherine Mohr

There has been quite a bit of attention paid recently to medical technology and the high costs of high-tech medicine, but does high-tech really mean higher cost? The example of the Da Vinci surgical robot shows that sometimes spending money can actually save money.

In 2000, a new medical technology was introduced: the surgical robot. In that first year, only about 1,000 surgeries were done worldwide with these robots, and those surgeries cost a lot. When you total up the cost of all the instruments and supplies, the robots themselves, and training and service contracts for keeping those robots running, the average additional cost for using the Da Vinci was almost $11,500 for each surgery performed. Hardly a recipe for enthusiastic adoption. But it was gradually adopted – driven both by novelty and the promise of the early clinical results, which seemed to indicate that the minimally invasive surgery the robot enabled made for better patient outcomes with fewer complications.

Fast forward to 2009, and there are large numbers of academic papers attesting to the superior outcomes delivered by the Da Vinci. There were 1,200 systems worldwide in 2009, and more than 200,000 robotic surgeries were performed, including prostatectomies, gynecologic surgery, cardiac surgery and transoral ENT procedures. A startling 75% of the radical prostatectomies performed in the U.S. in 2009 were done with the Da Vinci – an unprecedented rate of adoption of a new technique in the traditionally conservative discipline of surgery. Several hospitals have even bought multiple systems, and Intuitive Surgical, the maker of these robots (and where I’m employed!), has grown from a little Silicon Valley startup into a billion-dollar company.

Are improved patient outcomes enough to explain how disruptive a force robotic technology has been in the surgical market when it seemed to come with such a price premium? Unlikely. Although patients were going home earlier, experiencing considerably less post-operative pain, and going back to work within two weeks rather than more than six weeks after surgery, these societal costs (while extremely important to the patient!) are not costs that the insurance company or hospital sees. So while they strongly drive the patient’s desire for robotic surgery, they don’t give the hospital any additional incentive to provide it. But, as expected, the answer to the mystery of the hospital’s incentive can be found in the economics of how paying more for technology in one part of patient care may result in lower overall costs for treating the patient’s condition.

One of the forces at work for improved economics was simply volume. With greater utilization of the robots in the field, the average per-procedure cost dropped considerably to just under $4,000 for instruments and robot amortization and maintenance. Still, when compared to $900 per-procedure cost for laparoscopic surgery, or $700 per-procedure cost for open surgical procedures, the residual $3.000 premium per procedure seems like a hard barrier to overcome. Especially since hospitals are typically paid a single fixed price for a given procedure. This total price varies by who the payer is, but in general, the more efficient the hospital is at keeping its costs down, the more money it makes. So why are they paying for the robots?

It turns out that, in order to understand why hospitals are so eager to develop their robotic programs, you have to look at the effect that transitioning to minimally invasive surgery has on the total cost of the hospitalization for that patient for that procedure. Keeping a post-surgical patient who had an uncomplicated surgery in a bed in a hospital while they recover from that surgery costs that hospital $1,500 per day on average; patients who have MIS surgery go home two-and-a-half days earlier on average than patients having the same surgery through an open incision. The savings from being able to discharge patients earlier not only wipes out the premium cost for the robot instruments and maintenance, but actually brings the hospital out about $500 per procedure ahead.

The second big savings comes from complications and transfusions. Complications — when the surgery does not go as planned and the patient is injured during the surgery — can be devastating for the patient, and extremely expensive for the hospital; a minor complication can wipe out the hospital’s entire profit on a surgery, and a major complication can cost the hospital almost three times what it will be reimbursed. As hospitals eat the costs of those complications, there is a strong financial incentive to avoid complications (in addition to the pure humanitarian one). By making minimally invasive surgery easier for the surgeon to perform well, robotic surgery has been consistently shown to have lower complication rates than either open or laparoscopic surgery (even when taking into account the learning curve during which surgeons are learning this new technology). For every surgery performed robotically instead of either open or laparoscopically, this effect translates into an additional $700 savings on average for the hospital in avoided complications and associated blood transfusions.

So a $1,200 per-surgery net cost savings for the hospital even when it is spending an extra $3,000 in the OR can explain much of the adoption. The freakonomics are simple.


frankenduf

in a separate study, it was found that patient satisfaction was unchanged, due to most could not discern any personality difference between the robot and the surgeon

Jim F

thats neat!

Shawn Veltman

Intuitive is a fascinating company - their robot surgery console gives the surgeon a full 3D view of what's being operated on, which gives even greater accuracy during procedures.

Intuitive is a great example of the kind of technology that can make you think you're living in a science fiction story.

Eric M. Jones

Cool stuff.

I do wish to pick a fine point:

Calling a thing a "Robot" should mean that it is a device with autonomy, otherwise it is just a remotely-control mechanism, albeit with considerable computer technology grafted on.

But I know I've lost this argument....

Ray

While I find robotic surgery to be really interesting, how much need is there really for surgery on robots?

kevin.rash@mercy.net

You will love this article.

David L

I would be interested to know how implementing robotic surgery impacts malpractice premiums. I know other risk management systems and practices can create significant insurance savings for healthcare providers.

Also, I know our healthcare reimbursement system is a mess, but let's not totally discount patient preference as a market force! If the patient can get back to work a full month faster after a robotic surgery, he/she will presumably be willing to incur a greater out-of-pocket, even if insurance doesn't cover the difference. So the calculus should not simply assume static demand on the part of the hospital.

Henry Lahore

Great article - made me realize that: Vitamin D can save hospitals by reducing complications

It took 9 years for robots to take over one kind of surgery.

There have been many reports of reduced surgery complications when the patients had enough vitamin D (> 50 ng/ml). A hospital could spend 25 cents for vitamin D should see an average payback of hundreds of dollars in reduced complications for some surgeries. A quick search at www.VitaminDwiki.com found 172 hits of vitamin D and surgery. There were reports of improved outcomes for bariatric, colon, hip, pancreatic, gastrointestinal, cardiac as well as many other surgeries. While it would be far better if people would take enough vitamin D so as to not need the surgery, this at least could be a start.

Jackson

A couple of points from a hospital administrator point of view:

1) While Dr. Mohr is correct that the post-operative costs for patients receiving minimally invasive surgery are less, there is one big downside to the Da Vinci robots. The surgery takes longer for the surgeons to perform, particularly when they are still in the learning curve. This means surgeons are performing fewer surgeries and in turn generating less revenue. So even if the total costs are lower when looking at the total care of patients from start to finish, there is less revenue to be generated because the volume is lower. If I have the choice of filling up my OR's with surgeries using da Vinci or filling up my OR's with surgeries using traditional methods, traditional methods will win every time if I am strictly looking at the economics.

2) Ultimately, I don't think hospitals are adopting these robots in large numbers for the economic reasons that Dr. Mohr points out. The reduced length of stay and reduced complications through MIS are certainly factors but the adoption is coming mainly because physicians want it and because it is considered a marketing differentiator. Physicians see the non-economic benefits (MIS, reduced infections, lower length of stay, etc.) and want to practice at hospitals that have this technology. Hospitals also see the benefit of marketing the Da Vinci to patients (see this cool technology we have? look how advanced we are?). This doesn't equate to the total costs of Da Vinci surgery being lower, it just means the hospitals are trying to capture more market share.

3) One other point on MIS and the total costs associated. Laporoscopic surgery is commonly available for things like gall bladder removal already. 25 years ago, removing a gall bladder required a large incicision and an open surgery with a hospital stay of a few days, more complications, etc. Today they are done in most hospitals across the country with minimally invasive technology in outpatient surgery. I had mine out 6 months ago and was home within 5 hours of arriving at the hospital. The costs are significantly less since the follow up care is so easy and because the MIS procedure is very quick to perform. Interestingly enough, in the United States we now spend significantly MORE money on gall bladder removals than we did 25 years ago? Why? Because the technology made it possible for more people to have the procedure. With fewer complications, risks, etc. there are fewer reasons to NOT have the procedure performed. The service is probably over utilized today (or it was under utilized 25 years ago) but the main point is that as a society we spend a lot more money today removing gall bladders than we did 25 years ago despite a hugely disruptive technology that makes it significantly less costly for each individual patient.

To be clear, I am not against the Da Vinci technology at all. It is fascinating and the early results on the outcomes for patients are encouraging. Improving quality and reducing follow up complications are very important and make a big enough selling point for me.

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Rosewood

It is all good until Dr. Bender shows up and instead of taking out your appendix tells you to bite his shinny metal...

Matthew

Jackson is completely right. The Davinci is another innovation that may or may not have beneficial effects for individual patients and improve outcomes--but that's not why it's spread so fast. It's spread because of doctor's desires, skillful marketing and the herd mentality of hospital executives. The same story was true for CT, MRI PET, drug eluting stents and loads more technologies that are already overused, have marginal if any beneficial outcomes and have helped rocket up health care costs. (Check out Shannon Brownlee's book "Overtreated" if you care to know more)

Still at least this time the NY Times outlines the bias of its writer up front!

Claire

Matthew stated it best - marketing to the executives and strategic planners and physicians looking for ways to increase their own market share were the key reasons robotics took off. Many surgeons, including those in prestigious academic medical centers tried and abandoned the robots in favor or training new surgeons in the techniques that required more manual dexterity and developing skills in tissue handling, albeit using counter-intutive endoscopic devices to do minimally-invasive techniques. They felt that not all hospitals would necessarily find robots affordable, or a market to support the costs - and in some cases, they believed after trialing the DaVinci, that it provided no real benefit in terms of procedure time or patient outcomes over the standard MI approaches. Intuitive Surgical clearly developed an impressive arguments that engage public emotions - nerve-sparing prostatectomies and surgeons whose hands shake being the two I remember. As advanced as the technology is, the argument could be made that insurers will find a way to argue against reimbursing them as our healthcare reform initiatives gain traction. Economics will ultimately rule, and the majority will find paying the difference for a few weeks shorter recovery impractical, as long as the end result of the treatment is the same.

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超纯水设备

Matthew stated it best - marketing to the executives and strategic planners and physicians looking for ways to increase their own market share were the key reasons robotics took off. Many surgeons, including those in prestigious academic medical centers tried and abandoned the robots in favor or training new surgeons in the techniques that required more manual dexterity and developing skills in tissue handling, albeit using counter-intutive endoscopic devices to do minimally-invasive techniques. They felt that not all hospitals would necessarily find robots affordable, or a market to support the costs - and in some cases, they believed after trialing the DaVinci, that it provided no real benefit in terms of procedure time or patient outcomes over the standard MI approaches. Intuitive Surgical clearly developed an impressive arguments that engage public emotions - nerve-sparing prostatectomies and surgeons whose hands shake being the two I remember. As advanced as the technology is, the argument could be made that insurers will find a way to argue against reimbursing them as our healthcare reform initiatives gain traction. Economics will ultimately rule, and the majority will find paying the difference for a few weeks shorter recovery impractical, as long as the end result of the treatment is the same.
超纯水设备
www.jsgxfn.cn

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miriam

Hard to believe it would be cheaper. I've heard colleagues complain that it is much longer than the comparable laparoscopic procedure-- example avg 280 min vs 140 min for a lymph node dissection. Since OR time is the most expensive part of a patient's stay (estimates of about 35$/ min), even holding outcomes equal (but in general, longer surgery= worse outcomes) I'd say that I don't want to be on this part of the learning curve thankyouverymuch.

Devil's Advocate

A naysayer's perspective:

The robotic surgeries have fewer minor complications, but they (at least anecdotally) have more major complications. The surgeon has better fine motor control with the robot, but he also has less tactile feedback. This means that a major mishap (I've seen an experienced Da Vinci operator cut an inferior vena cava) can more easily occur.

Now, once that inferior vena cava is cut, the robot needs to get out of the way so the surgeon can fix it, and the anesthesiologist can get better access to the patient to keep her alive while this is going on. And unfortunately, the Da Vinci is huge and completely in the way.

If you get the robots smaller and add better tactile feedback, they'll catch on. Otherwise, they're pretty dangerous.

Also, those minor benefits in prostate surgery? Well, there's one problem there: the Da Vinci surgeries seem to have higher rates of impotence.

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Quadbypass

I had a quadruple heart bypass operation in March using minimally invasive surgery. I was out of the hospital quicker than a patient having traditional surgery and I was released to normal activity in 2 weeks and back at work in 3 weeks.

My brother had a traditional triple bypass 5 years ago and at 6 weeks was just getting where he could walk around a block.

I can't say enough positive things about robotic surgery from a patient's perspective.

Just Asking

Quadbypass: did you have minimally invasive surgery with or without a robot? Right now most minimally invasive cases are done without one.

Turnip Truck Rider

Marketing, marketing and "keeping up with the jones' " is what has kept this technology moving forward.

Less pain, quicker recovery, shorter hospital stays - compared to what? It is comparing it to OPEN SURGERY NOT laparoscopy. A s*killed laparoscopic surgeon doesn't need the crutch of 3D. A *skilled laparoscopic surgeon HAS less pain, quicker recovery and shorter hospital stays...they ALSO have significantly fewer trocar puncture sites.

Explaing to me the patient/surgeon pre-op discussion and how the DOUBLE surgical time is justified. "Hi, betty, i'm learning how to use the robot and want to use YOU during my learning curve." I think not - NEVER being discussed. 45 minutes under anethesia before a robot is docked is abuse, plain and simple.

Reminds me of the lasers for gallbladders - "doc, I want my gallbladder out with the laser. Many rusting away in OR hallways.

This is a marketing ruse pushed on patients and compared to traditional OPEN surgery with the claims - however, the public does not know this.

Pushing non-laparoscopists to perform laparocsopic cases by assuring them that the robot with "help" them defeat the learning curve is insane and akin to malpractice. If you don't currently possess keen laparoscopic skills now, do you think your patient would approve of you performing surgery on them if the KNEW for one second that you would be taking this lack of skill ACROSS the room!? Not likely.

Taking a 25 minute oophorectomy and performing a 2 hour debacle is not the right thing to do for the patient.

I'm missing the Ethics lesson here.

Train right, do no harm.

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Quadbypass

Just asking -

Sorry I didn't specify. It was with a robot. If you have to have a bypass it is the way to go!.

Jessica

Just want to remark that the surgical robot wasn't introduced in 2000. The RoboDoc was clinically applied 1992!

Talking about robots in case of daVinci is questionable, I would prefer telemanipulation system.

Anyway, interesting article.