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1. New robots are specialized and hold the potential to disrupt the market

How has the market changed?

Historically, "robot" has been synonymous with the da Vinci Surgical System from Intuitive Surgical. Intuitive was the pioneer of robotics and was rewarded with the greatest market share for about 20 years. Industry leaders seem to have taken the hint, with many companies now focusing on specialization instead of all-encompassing surgical systems.

Who are the innovative disruptors in care delivery?

To name a few, XACT Robotics received a certification mark in September 2018 to sell its robot for needle steering, called Caesarea, in Europe. Its robot is being used for CT-guided procedures in the abdomen. Virtual Incision released a two-pound robot, aiming to gain FDA approval this year, which operates inside the abdomen and is designed to increase access to minimally invasive surgery through its miniaturization. Earlier this year, Johnson & Johnson announced its acquisition of Auris Health, a company focused on lung cancer robotics. And Intuitive itself announced in the summer that it was acquiring the robotic endoscope portion of Schölly Fiberoptic's business.

The notable exception is Medtronic, which announced the release of its highly anticipated robot in September, called Hugo. Though strikingly similar to the da Vinci, Hugo has a few differences. First and foremost, it is modular; all of its arms, console, and other parts of the system are on wheels and are separate from one another, enabling mobility and customization. This reduces setup time and expands its capabilities. Second, it was designed not just for robotic surgery, but also for laparoscopic and even open surgeries. And third, Hugo's open console allows for more interaction between the surgeon, patient, and OR staff.

How can you respond?

Despite the high cost of robots, hospitals continue to invest in them to keep up with competitors, recruit new physicians who trained on them in residency, and, in some cases, for the improved clinical outcomes. If you are thinking about investing in a new robot in addition to da Vinci, consider a more specialized or smaller robot to decrease costs and increase mobility where possible. Identify a strong need for a specialized robot in your market, as well as surgeon interest and patient benefit before making an investment decision.

2. The breadth of procedures adopted on the robot is expanding

How has the market changed?

Initially, the most widely adopted procedures on the robot were in urology and gynecology. But now, the types of procedures performed on the robot has expanded to include general surgery procedures like gallbladder removals and hernia repairs. Use of da Vinci for general surgery procedures in the US grew 32% in 2018.

How can you respond?

Identify gaps in your robotics service portfolio; specifically, is your organization an early adopter on any robotic procedure, or do your service offerings mainly fall into the late majority category? Evaluate patient need for and surgeon skill with additional procedures that may be performed robotically. Adopting additional procedures, either traditionally performed open or laparoscopically, may decrease physician fatigue and lead to shorter lengths of stay for the patient.

Ready-to-present slides: Surgical services market trends for 2019 and beyond

3. The outpatient shift is decreasing inpatient surgery volumes

How has the market changed?

As procedures continue to shift outpatient, and in some cases specifically to ambulatory surgical centers (ASCs), organizations need to consider new strategies as they approach robotics. For prospective buyers, the outpatient shift may make the case for investment more difficult, as inpatient surgery volumes continue to decrease. For current users, this may mean re-evaluating the current strategy around placement, which may also be difficult given that procedures performed in an ASC are often reimbursed at lower rates than those performed inpatient or in the HOPD. Almost 40% of hospitals in the United States had a da Vinci robot as of 2017, and although da Vinci robots can perform outpatient procedures, these primarily take place in the hospital setting. Though the outpatient shift may be hitting service lines and markets differently, the good news is that there is a seemingly large portion of surgeries performed outpatient that could be done using robots, meaning organizations may have the opportunity to recoup losses from investment in sheer volume of outpatient cases.

How can you respond?

Analyze the percent of robot-assisted surgeries your organization performs inpatient versus outpatient to diagnose how quickly your organization may need to change its robotics strategy. Then, strategize on the placement of existing robots, considering the possibility of moving one to an ASC or other outpatient setting. It is also important to think about the types of outpatient procedures your robot already performs, and map those to services that may be shifting outpatient in the future. Use our Outpatient Shift Estimator to understand the risk of shift for inpatient services in your market.

Hospitals should continue to monitor the shifting landscape of the robotics industry for potential market disrupters, competitors' adoption of procedures, and allocation and placement of robots in their market. In short, the use of surgical robots continues to grow as applications for use expand and industry competitors continue to innovate for the future.