Outlook for robot-assisted surgical technology in value-based environments

Robot-assisted surgical procedures have been on the rise over the past two decades, and the upward trend is expected to continue. 

The adoption of robot-assisted surgical technology varies widely across healthcare providers and surgeons, and is primarily influenced by reimbursement and cost-related considerations.

Robotic technology is available for almost every therapeutic area, including orthopaedic joint replacement, urology, general and gastrointestinal surgery, spine fusions, and gynaecology. Soon, robots will be used for more intricate vascular surgery. 

Economist Intelligence Clearstate expects robot-assisted procedures for prostatectomy to grow by more than an average of 15% annually until 2023 in countries such as China and Indonesia. Robot-assisted hip and knee replacement surgeries will increase by more than 20% annually in China and Australia in the same forecast period.

Financing robotic equipment is a key challenge for most hospitals and facilities

Obtaining capital funds for robots is a major hurdle for hospitals. Even large health systems lack the funding to meet their emergent needs. High equipment costs are an even greater roadblock for smaller healthcare systems or stand-alone hospitals and ambulatory service centres (ASCs). In the US, lower reimbursement levels for ASCs compared to hospitals limit the likelihood of purchasing robotic equipment. 

Hospitals and facilities need to examine, when considering adding or expanding robot-assisted procedures, the cost of the specific robot, speciality instrumentation, software and equipment, and the impact on integrating this technology into the electronic medical record (EMR).

Surgical device companies currently provide various schemes to support capital acquisition, such as straight-purchase or lease agreement with options for fair market value (FMV), out-right purchase at the end of the term or lease renewal.

The shift to value-based purchasing decisions 

Value-based programmes offer incentive payments to healthcare facilities based on the quality of care provided to patients. As more countries shift from fee-for-services to value-based care models, hospital executives must consider the financial impact of robot-assisted, laparoscopic or open procedures. Some facilities are transitioning from laparoscopic and open procedures to robotic procedures, to reduce the length of patient stay and avoid re-admittance. 

With value-based healthcare, there are strong justifications for the capital purchase and additional operating costs of robots. This equipment can reduce operative time, the risk of complications and the patient’s length of stay. 

Reduced operative time enables surgeons to perform more procedures while responding to the most urgent cases. Better operational efficiency will help drive surgical volume, increasing the technology’s ROI.

Some hospitals, such as those in the US, may also benefit from a shift in billing mechanisms. Traditionally, hospitals billed a flat rate based on operating room time. Now, charges are based on case-complexity, and despite shorter operating times, robot-assisted surgeries are more expensive.  For hospitals planning to invest in  robotic technology in the near future, the ROI will look different from facility-to-facility.

Surgical device companies need to support hospitals in optimising their capital investments to ensure that equipment purchases meet the needs of the specific surgical environment. For example, facilities should consider whether they can accommodate the length of time a given procedure takes. Real-time 3D imaging scans, used in the operating room, can take up to 15 minutes, so if multiple scans are needed, this can drastically increase the time required to perform a surgical procedure.

The future of robot-assisted technology in value-based environments 

As this industry continues to grow, more companies will enter the robot-assisted procedure space. 

Surgical device companies seeking to expand access to robot-assisted procedures need to:

  • understand the unique surgical environment and market in each country 
  • understand the reimbursement landscape for surgical procedures in each country
  • engage local hospitals and professionals to build and sustain a high volume of robot-assisted surgeries, such as through training of surgeons and staff
  • develop products and services for regional and local market needs, and varying facility needs

Through Economist Intelligence Clearstate’s team of consultants and Surgical Gateway, our proprietary data solution, we support strategic and tactical business planning and provide answers on the what, where and how to gain market share.