Hybrid operating room investment is a hot topic with members, as increasing complexity of interventional case mixes and rising interest in TAVR are sparking physician demand for access to these facilities. However, extremely high upfront costs are rightfully giving hospital leaders pause.
Because of this, our Service Line Strategy Advisor team has run financial analyses* for many members to evaluate the implications of hybrid OR investment. In these analyses, the five-year net present value (NPV) for hybrid OR investment is calculated based on various inputs such as standard upfront costs, incremental volume projections for hybrid OR-suitable procedures, expected reimbursement, labor, and maintenance.
So what’s the verdict? Across hospitals, hybrid OR investments tend to have a negative five-year NPV, largely due to the significant equipment and construction costs—$3.6 million on average—and the lack of any increased reimbursement for performing procedures in the hybrid space, but the situation improves slightly for hospitals capable of leveraging existing infrastructure and staff.
While this may look like a poor investment, it is important to realize that hybrid ORs should be thought of more as facility improvements, where the returns are more intangible but still very important. Hybrid ORs tend to make physician recruitment easier, and they increase a hospital’s reputation as the cutting-edge facility in their region. Also, as treatment options advance, the hybrid OR may take a more prominent role in care, and the FDA’s recent indication expansion of TAVR to intermediate-risk patients, is a great example of this.
Only looking at hybrid OR investment from the financial perspective misses out on the true benefits of the improved facilities, and based on the rapid pace at which hybrid ORs are popping up, hospital leaders are well aware of this.
*Please note: These analyses were completed between 2011 and 2015 and reflect CMS reimbursement policies in place at the time of assessment completion.