Last month, we began our report on whether the robot could be cost-effective for general surgical procedures (GSN, May 2015, page 4). Here, in Part 2, we look at more specific ways robotic surgery may be cost-effective and the robot’s effect on a hospital’s bottom line.

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Cost Effective Robotic Surgery

In cost-effectiveness analyses that compare robotic-assisted laparoscopic cases with conventional laparoscopy, “there’s no contest—robotic surgery almost always comes out more expensive on a case-by-case basis,” said Michael Awad, MD, PhD, director of the Washington University Institute for Surgical Education, Washington University School of Medicine, St. Louis.

So perhaps the key is to take an open technique and make it minimally invasive. “This is where robotic surgery may have its greatest benefit—to help convert open to robotic,” Dr. Awad said. “In my opinion, open procedures are associated with greater costs compared with robotic or standard laparoscopy once you consider patient [hospital] LOS [length of stay], complications, pain, return to work or reoperations.”

David Jaques, MD, vice president of surgical services at Barnes-Jewish Hospital and professor of surgery at Washington University, both in St. Louis, agrees that the robotic platform does not need to migrate to areas where there are already well-developed minimally invasive surgical techniques, but when robotic surgery has helped accelerate the transition from open to minimally invasive techniques, patients have derived a benefit.

Perhaps the most compelling evidence in favor of robotic surgery is for prostatectomy and partial nephrectomy. A 2015 analysis, funded by Intuitive Surgical, showed robot-assisted surgery increased the rates of partial nephrectomy by 52% and that patients who underwent a partial nephrectomy had a lower risk for renal failure compared with those who had a radical nephrectomy (Health Affairs 2015;34:220-228).

“Saving the kidney cuts down on long-term dialysis costs, which amounts to robust long-term savings,” said Akash Bijlani, director of Healthcare Economics and Market Access at Intuitive Surgical. “This study shows that cost-effectiveness analyses should focus not only on upfront costs but also on long-term benefits to patients.”

For prostatectomy, a 2013 study found that robotic prostatectomy was on average $2,118 to $2,274 more costly per case than laparoscopic prostatectomy, but that this greater cost may be offset by advantages in long-term outcomes, namely a potentially lower risk for positive margins (Euro Urol 2013;64:361-369). A 2013 meta-analysis, which included 15 studies, showed that robotic prostatectomy had a lower risk for organ injury (0.4% robotic vs. 2.9% laparoscopic), and a lower rate of surgical margins positive for cancer (17.6% robotic vs. 23.6% laparoscopic) (BJU Int 2013;112:798-812). Thus, robotic surgery could potentially reduce cancer recurrence and the need for further treatment, but the authors acknowledged that more work is needed to confirm these findings.

Dr. Awad said that the robot is especially useful when navigating spaces that are narrow or hard to reach laparoscopically. In the foregut, for instance, when approaching the thoracic cavity through the abdomen, the surgeon is working through a very narrow space.

“It is challenging to reach up there with laparoscopic tools, but with the robot, it’s like I’m driving through the Lincoln Tunnel. I can usually reach the proximal esophagus from the abdomen,” Dr. Awad said. “The robot may be most advantageous in complex surgeries that involve reaching tight, narrow spaces, which is probably why it took off first in urology and gynecology, and is now expanding to rectum and foregut surgery.”

Conrad Ballecer, MD, also began seeing the potential of the robotic system once he realized the key was not to replicate laparoscopic techniques, but to make an open technique minimally invasive.

“If we’re replicating a laparoscopic technique robotically, the benefit from a patient standpoint will be negligible,” said Dr. Ballecer, MD, MS, co-director of the Center for Minimally Invasive and Robotic Surgery, Arrowhead Hospital and Banner Thunderbird Medical Center, Glendale, Ariz. “With the robot, we can mimic an open repair and work high up on the anterior wall, which is incredibly challenging laparoscopically. Here, we have taken a technique formally exclusive to open hernia repair and, using the robot, have made it minimally invasive.”

Additionally, Dr. Ballecer said he has observed impressive patient outcomes with this technique. “My patients are staying less time in the hospital, they are going back to work earlier and having fewer complications and less pain,” Dr. Ballecer said. “It has virtually become an outpatient procedure with patients averaging less than one day in the hospital. We can schedule patients for surgery on a Thursday and they are back to work on Monday. In this way, the cost benefits of robotic surgery may become notable on the backend.”

Although Dr. Ballecer said that to date there are no publications evaluating the robotic approach and that such an assessment is needed, he feels that his observations from more than 150 patients who have undergone this repair already speaks volumes.

Shorter Length of Stay, Greater Case Volume

According to a 2010 analysis by Richard Satava, MD, reduced LOS may convey a significant cost advantage for robotic surgery (Open Access Surgery 2010;3:99-107).

“This becomes a cost savings for the patient when enough nights in the hospital are saved to overcome the increased cost of the robotic procedure,” Dr. Satava and his colleagues wrote.

The rationale is that the number of available hospital beds limits the volume of inpatient procedures, and so reducing LOS could mean more available beds and thus a higher volume of possible procedures.

To this end, Peter Dunn, MD, director of perioperative services at Massachusetts General Hospital, Boston, has observed both a clinical and financial benefit in specific minimally invasive surgical valve cases performed by an experienced surgeon in a subset of patient. “Costs in the OR [operating room] were still more expensive for robotic surgery, but because these patients had a reduced LOS, our hospital margin was positive,” Dr. Dunn said.

There are several issues, however, with this LOS argument. First, according to Conor P. Delaney, MD, PhD, chief of colorectal surgery and vice chair of surgery at the University Hospitals Case Medical Center in Cleveland, in general “there are still no data showing a lower length of stay with robotics versus traditional laparoscopy.”

According to Terry Loftus, MD, chief medical director of Surgical Services and Clinical Resources for Banner Health, in Sun City, Ariz., the issue may not be available beds, it may be available OR space. “More available beds do not necessarily mean a higher volume of procedures for the hospital,” Dr. Loftus noted.

Patricia Sylla, MD, FACS, FASCRS, a colorectal surgeon at Mount Sinai Hospital in New York City, agreed that increasing the volume of cases may not be feasible. “The most successful robotic programs exist in community hospitals that have invested in growing the robotic case volume with a trained robotic team and multiple robots, but this situation may be more difficult to replicate in busy tertiary hospitals,” Dr. Sylla said.

Perhaps, in some instances, reduced LOS can backfire. With the increase in the number of robotic operations throughout the Banner Health system, Dr. Loftus has seen a shift from inpatient to outpatient procedures. In 2010, about two-thirds of robotic cases were inpatient, but now a little less than 30% are.

“Payors are realizing that with robotics many procedures can be done on an outpatient basis, so they’re no longer reimbursing at the inpatient rate,” Dr. Loftus said. “The trouble is that we’re buying robots based on past accounting with higher reimbursement, and now we’re paying for robots in an environment where most cases are outpatient with lower reimbursement. I think this is good for patient care, but in terms of business planning, no one saw that coming.”

Robotic Surgery in Broader Context

But how much does a robotic system really affect a hospital’s bottom line when compared with other expenses?

Several years ago, Dr. Jaques presented a cost graph of a day in the life of the OR, which showed OR expenses for the 175 procedures performed in the 58 ORs of a large academic medical center. The graph was sprinkled with unlabeled bullet points, some of which were clear cost outliers, but most of which were clumped together at the lower end of the cost spectrum. When Dr. Jaques asked the audience what they thought the outliers were, one person piped up “robotic surgery.”

Dr. Jaques revealed, however, that robotic surgery was not one of the outlier expenses. Although the two robotic procedures done that day were among the top third most expensive cases, ranking 44 and 47 at approximately $2,000 per case, their OR costs were substantially less than those for nearly all orthopedic or cardiovascular procedures. In fact, OR supply costs for orthopedic and cardiac procedures ranged from five- to eightfold more per case than those the robotic procedures. Implants, such as cochlear implants, knee replacements, valves and grafts accounted for nearly 80% of OR supply expenses in a given day. And perhaps surprisingly, screws were also among the higher cost items, with a single screw costing anywhere from $900 to almost $3,000.

“Although the robot is seen as a villain of cost to a hospital, it does not represent the bulk of the costs on a given day or even overall,” Dr. Awad said. “If the robot were something that would shut down a hospital, then we wouldn’t see it. Aggressive marketing of a new product can only take you so far. If there is no advantage to a new technology and it is breaking the bank, it wouldn’t continue to be around.”

Still, Dr. Jaques pointed out that, if the capital investment, annual maintenance and additional personnel required for robotic procedures were spread out, the overall expense per case increases by approximately $1,200. For hysterectomies, for example, the robotic approach cost the hospital about twice as much as the laparoscopic approach and four times more than the transvaginal approach.

“Supply expenses should be addressed for all procedures,” Dr. Jaques said. “The robot has drawn attention to this, but its contribution to overall OR supply costs is far less than implant-related procedures.”

In deciding what is best for patients, Dr. Delaney said, “in the end, health care is not about money, it’s about excellence. That said, we need appropriately efficient excellence and, although the robot is a phenomenal technology, overall robotic surgery is not there yet in terms of providing clinical improvements. The problem is that robotics is still laparoscopic surgery with a more expensive interface.”

There is emerging clinical and anecdotal evidence that, for particular procedures, patients and experienced surgeons, robotic surgery may become cost-effective, but this data remains limited. Still, just as laparoscopic surgery took years to catch on and become accepted, robotic surgery continues to evolve. Understanding where, how or if it fits into the surgical landscape will take more time, experience and innovation.

“We are now where we were with laparoscopy about a decade ago,” according to Julio Garcia Aguilar, MD, PhD, chief of colorectal service and Benno C. Schmidt Chair in Surgical Oncology at Memorial Sloan-Kettering in New York City. “Robotic surgery has potential but it needs to be studied more. Currently, there are too many opinions and not enough data to support its widespread use.”

Disclosures: Dr. Awad received food and beverage from Intuitive; Dr. Ballecer teaches robotics training courses run through Intuitive. Drs. Aguilar, Delaney, Dunn, Jaques, Loftus, Sylla reported no conflicts of interest.

On the Patient Side: Hospital Charges and Robotic Surgery

Understanding robotic surgery in terms of the costs to patients is important. For patients, the expense of robotic surgery can be viewed in terms of direct hospital charges and patient outcomes. But hospitals in the United States offer little transparency when it comes to their charges.

In a 2013 study, investigators tried to find pricing data for a common elective surgical procedure, total hip arthroplasty (JAMA Intern Med 2013;173:427-432). The authors reported that of 120 hospitals in the United States, 20 of which were top-ranked in orthopedics, only nine top-ranked hospitals (45%) and 10 non–top-ranked hospitals (10%) could provide a complete bundled price. Another three top-ranked hospitals and 54 non–top-ranked hospitals could give a price estimate. The prices ranged significantly from institution to institution. For top-ranked hospitals, a total hip arthroplasty cost between $12,500 and $105,000, and for non–top-ranked hospitals the range was similar ($11,100 to $125,798). The same procedure could vary in price by 1,000%.

For robotic surgery, data on hospital charges is also limited, but the available numbers do tend to show that a robotic procedure is more expensive for patients than its laparoscopic or open counterparts. One study found that total charges for a robotic hysterectomy were $44,700 compared with $25,557 for a laparoscopic procedure. Another study reported that hospital charges for endometrial cancer at a single institution were about $9,000 more expensive for robotic than laparoscopic surgery ($64,266 vs. $55,130) (Gynecol Oncol 2012;125:237-240).

“For surgeons, there is no specific CPT [Current Procedural Terminology] code for robotic surgery, so we use a laparoscopic surgery code to bill and thus the surgeon’s charges to patients are no different for robotic versus laparoscopic surgery,” said Dr. Ballecer. “Institutions, however, may vary in what they ultimately charge patients.”

There are other factors to consider, however. Do patients have insurance and if so, what kind of coverage do they have? Do patients who undergo robotic procedures have shorter length of stay? Do they have less pain? Do they go back to work earlier? And, perhaps most importantly, are they less likely to have postsurgical complications or need a reoperation? In other words, could shelling out $1,000, $5,000, $10,000 more for robotic surgery mean avoiding tens of thousands of dollars down the line in complications and future operations? There simply are not enough data to answer these questions.

“There is no one blanket statement we can use regarding costs to patients,” Dr. Loftus said. “We have a confusing health system and costs vary depending on the context.”