Custom Research Case Study: Robotic Surgery

How We Helped One Hospital Assess a Robotics Investment

Rachel Klein, Technology Insights

Feb. 7, 2013

Robotic surgery has a strong presence in U.S. hospitals. Despite recent negative press, many providers still feel pressure to invest. We've helped hundreds of members determine when, if, and how many robots are right for them.

Concerning robotic surgical technology, we often hear members say things like:

  • "Robotics is the future of surgery"
  • "I'll fall behind if we don't have a robot"
  • "We're losing patients to hospitals with the robot"

However, we also still hear substantial concern over the potential profit loss of having a robot and whether or not it will be used.

Will a Second Robot Make a Difference?

In a recent custom research project focusing on robotics technology, we helped one medium-sized hospital determine whether they should invest in a second surgical robot. For the purposes of our story, let's call them "Hospital X."

Hospital X had one robot, and their surgeons were clamoring for a second. They were performing more than 300 cases on the robot per year, and were at a tipping point for determining if a second system was right for their hospital.

We helped Hospital X model potential demand for a second robot by looking at a few factors:

  • Current utilization
  • Market share
  • Profitability of existing cases
  • Overall market growth

We spoke with their surgeons to better understand how they were using the system and who else within the hospital might have interest. From this research, we determined that a second robot was necessary for two important reasons.


1. New surgeons identified to profitably grow the program

Hospital X's current system was at capacity, and there were at least seven additional surgeons who had expressed interest in performing robotic procedures. These surgeons were in training to perform the procedures, and would likely take surgical cases elsewhere if they were not able to use the robot.

The current system was dominated by oncologic procedures, and surgeons expressed frustration about being bumped for other cases.

We helped Hospital X determine which procedures would bring in new patients for their hospital, rather than just converting existing cases to the robot.


2. Robot increases profit margins for some major procedures

While analyzing Hospital X's data, we saw that while many procedures did not make money on the robot, robotic prostatectomies would be more profitable than non-robotic procedures due to the substantial length-of-stay savings. The graph below shows the impact on profitability following implementation of the robot.

This also shows Hospital X the importance of focusing on consumer-directed marketing in their area given the large growth expected for this procedure.

Hospital X's Investment Decision

Hospital X decided to invest in a second robot based on the guidance and data provided by our team. Using our analysis, they are optimizing its use for those profitable procedures to offset its high capital cost.

The administrators noted that our analysis and insight helped them formulate a strong business case for purchasing a second system to present to their Board of Directors. Ultimately, this investment will help them remain competitive in their market.

  • This advice may not hold for your organization. We're here to help you navigate the investment challenges unique to your situation. Contact us with questions about robotic surgery, or request a customized assessment for your program. 

Rachel Klein, Technology Insights

Feb. 7, 2013

Robotic surgery has a strong presence in U.S. hospitals. Despite recent negative press, many providers still feel pressure to invest. We've helped hundreds of members determine when, if, and how many robots are right for them.

Concerning robotic surgical technology, we often hear members say things like:

  • "Robotics is the future of surgery"
  • "I'll fall behind if we don't have a robot"
  • "We're losing patients to hospitals with the robot"

However, we also still hear substantial concern over the potential profit loss of having a robot and whether or not it will be used.

Will a Second Robot Make a Difference?

In a recent custom research project focusing on robotics technology, we helped one medium-sized hospital determine whether they should invest in a second surgical robot. For the purposes of our story, let's call them "Hospital X."

Hospital X had one robot, and their surgeons were clamoring for a second. They were performing more than 300 cases on the robot per year, and were at a tipping point for determining if a second system was right for their hospital.

We helped Hospital X model potential demand for a second robot by looking at a few factors:

  • Current utilization
  • Market share
  • Profitability of existing cases
  • Overall market growth

We spoke with their surgeons to better understand how they were using the system and who else within the hospital might have interest. From this research, we determined that a second robot was necessary for two important reasons.


1. New surgeons identified to profitably grow the program

Hospital X's current system was at capacity, and there were at least seven additional surgeons who had expressed interest in performing robotic procedures. These surgeons were in training to perform the procedures, and would likely take surgical cases elsewhere if they were not able to use the robot.

The current system was dominated by oncologic procedures, and surgeons expressed frustration about being bumped for other cases.

We helped Hospital X determine which procedures would bring in new patients for their hospital, rather than just converting existing cases to the robot.


2. Robot increases profit margins for some major procedures

While analyzing Hospital X's data, we saw that while many procedures did not make money on the robot, robotic prostatectomies would be more profitable than non-robotic procedures due to the substantial length-of-stay savings. The graph below shows the impact on profitability following implementation of the robot.

This also shows Hospital X the importance of focusing on consumer-directed marketing in their area given the large growth expected for this procedure.

Hospital X's Investment Decision

Hospital X decided to invest in a second robot based on the guidance and data provided by our team. Using our analysis, they are optimizing its use for those profitable procedures to offset its high capital cost.

The administrators noted that our analysis and insight helped them formulate a strong business case for purchasing a second system to present to their Board of Directors. Ultimately, this investment will help them remain competitive in their market.

  • This advice may not hold for your organization. We're here to help you navigate the investment challenges unique to your situation. Contact us with questions about robotic surgery, or request a customized assessment for your program.