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Figure.
Robot System Shipments and Installations and Procedure Volume Data, 2010-2017
Robot System Shipments and Installations and Procedure Volume Data, 2010-2017

Installed base indicates units shipped minus trade-ins and returns. Although the overall structure of each financial statement is similar, some individual data points were not reported for the entire study period. For example, US procedure volume was introduced in 2010. To avoid introducing unsubstantiated assumptions, data are only presented when continuous elements are available for all years until 2017.

Table.  
Robot System Sales, Robotic Procedure Volume, and Revenue Data in 2017a
Robot System Sales, Robotic Procedure Volume, and Revenue Data in 2017a
1.
Jayne  D, Pigazzi  A, Marshall  H,  et al.  Effect of robotic-assisted vs conventional laparoscopic surgery on risk of conversion to open laparotomy among patients undergoing resection for rectal cancer: the ROLARR randomized clinical trial.  JAMA. 2017;318(16):1569-1580. doi:10.1001/jama.2017.7219PubMedGoogle ScholarCrossref
2.
Jeong  IG, Khandwala  YS, Kim  JH,  et al.  Association of robotic-assisted vs laparoscopic radical nephrectomy with perioperative outcomes and health care costs, 2003 to 2015.  JAMA. 2017;318(16):1561-1568. doi:10.1001/jama.2017.14586PubMedGoogle ScholarCrossref
3.
US Securities and Exchange Commission.  EDGAR company filings. https://www.sec.gov/edgar/searchedgar/companysearch.html. Accessed February 22, 2018.
4.
Stey  AM, Brook  RH, Needleman  J,  et al.  Hospital costs by cost center of inpatient hospitalization for medicare patients undergoing major abdominal surgery.  J Am Coll Surg. 2015;220(2):207-217. PubMedGoogle ScholarCrossref
5.
Childers  CP, Maggard-Gibbons  M.  Understanding costs of care in the operating room.  JAMA Surg. 2018;153(4):e176233. doi:10.1001/jamasurg.2017.6233PubMedGoogle ScholarCrossref
6.
Siu  J, Hill  AG, MacCormick  AD.  Systematic review of reusable versus disposable laparoscopic instruments: costs and safety.  ANZ J Surg. 2017;87(1-2):28-33. doi:10.1111/ans.13856PubMedGoogle ScholarCrossref
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Research Letter
August 28, 2018

Estimation of the Acquisition and Operating Costs for Robotic Surgery

Author Affiliations
  • 1Department of Surgery, David Geffen School of Medicine at University of California, Los Angeles
JAMA. 2018;320(8):835-836. doi:10.1001/jama.2018.9219

Despite evidence questioning the clinical benefit,1 the use of the robotic platform for surgical procedures is increasing.2 No benchmark exists for the cost of acquiring and operating robotic systems, and previous cost evaluations have either omitted key expenses1 or utilized billing records that do not itemize costs with sufficient granularity.2 Because 1 company supplies most robotic technology, and all their revenue comes from system, service, and instrument sales, the minimum cost to hospitals can be estimated by examining the revenue in this company’s financial statements. Establishing a cost benchmark can inform future cost-effectiveness evaluations.

Methods

The financial statements of Intuitive Surgical Inc (Form 10-K annual reports) from January 1999 to December 2017 were retrieved online.3 The Form 10-K is an annual report required by the US Securities and Exchange Commission that provides a summary of a company’s finances. Filings are independently audited and verified by the chief executive officer. Data were extracted and summarized for robot system sales, revenue sources (systems, service, instruments and accessories; rounded to the nearest $100 000) and approximate procedure volumes by specialty (gynecology, general surgery, urology). Procedure information is entered into the robotic platform for each case and is transmitted to the company. “Robot systems” refer to the sale or lease of the platform. “Service” refers to the maintenance and training contract. “Instruments and accessories” include finite-lifetime parts, endoscopes, simulators, and supplies (eg, drapes). To hospitals, system revenue is an acquisition cost with service and instrument and accessory revenue as fixed and variable operating expenses, respectively.

Results

By the end of 2017, the company shipped 5770 robot systems; after accounting for trade-ins and returns, 4409 platforms were installed globally including 2862 (65%) in the United States (Figure, A). The estimated annual procedure volume increased from 136 000 in 2008 to 877 000 in 2017. In 2017, 644 000 procedures (73%) were performed in the United States (Table). From 2010 to 2017, general surgery procedure volume increased the fastest (10 000 to 246 000) followed by gynecology (123 000 to 252 000) and urology (85 000 to 118 000) (Figure, B).

Total revenue in 2017 was $3.1 billion, with $2.3 billion (73%) domestically (Table). In 2017, 52% of revenue was derived from instruments and accessories, 29% from robot systems, and 19% from service. Dividing the total spending on robotic technology by the total number of robotic procedures performed in 2017 yielded a cost per procedure of $3568, with $1866 for instruments and accessories, $1038 for robot systems, and $663 for the service contract.

Discussion

The robotic surgical procedure market is large and increasing; in 2017, hospitals paid the primary supplier more than $3 billion, equating to $3568 per procedure.

Before robotic surgery, total operating room costs for common general surgery procedures ranged from $3000 (cholecystectomy) to $7000 (pancreatectomy).4 Instruments account for less than 20% of this cost5 because they are relatively inexpensive. For example, the marginal cost of a reusable instrument set is less than a few hundred dollars per procedure and disposable instruments, although more expensive, still cost less than $1000 for common laparoscopic procedures.6

In this study, the instruments and accessories used in robotic surgery cost an average of $1866 per procedure. In part, this reflects a limitation imposed by the company because of specifications to not use most instruments for more than 10 procedures. To our knowledge, no clinical data support this limit. In addition, $1701 per procedure was dedicated to purchasing and maintaining the system, costs that are novel to robotic surgical procedures.

The primary limitation of this study is the ability to estimate only the hospital costs imposed by the manufacturer. Because robotic surgery increases operating room time,1,2 and there are other hospital expenses such as staff training, infrastructure upgrades, and marketing, this study’s estimate represents the lower bound for the total cost of this technology. Reductions in downstream expenses, such as reduced length of stay, may offset these costs. However, especially in robotic vs laparoscopic comparisons, there are few data supporting this assertion.1,2

The continued use of the robotic platform in surgery requires demonstrating the superior clinical benefit of these devices while considering the full set of costs for these systems.

Section Editor: Jody W. Zylke, MD, Deputy Editor.
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Article Information

Accepted for Publication: June 11, 2018.

Corresponding Author: Christopher P. Childers, MD, Department of Surgery, David Geffen School of Medicine at University of California, Los Angeles (UCLA), Ronald Reagan UCLA Medical Center, 10833 Le Conte Ave, CHS 72-247, Los Angeles, CA 90095 (cchilders@mednet.ucla.edu).

Author Contributions: Dr Childers had full access to all of the data in the study and takes responsibility for the integrity of the data and the accuracy of the data analysis.

Concept and design: Childers.

Acquisition, analysis, or interpretation of data: All authors.

Drafting of the manuscript: Childers.

Critical revision of the manuscript for important intellectual content: All authors.

Statistical analysis: Childers.

Obtained funding: Childers.

Supervision: Maggard-Gibbons.

Conflict of Interest Disclosures: All authors have completed and submitted the ICMJE Form for Disclosure of Potential Conflicts of Interest.

Funding/Support: This work was funded by grant F32HS025079 from Agency for Healthcare Research and Quality (Dr Childers).

Role of the Funder/Sponsor: The funder had no role in the design and conduct of the study; collection, management, analysis, and interpretation of the data; preparation, review, or approval of the manuscript; and decision to submit the manuscript for publication.

Reproducible Research Statement: All data used for this study are available on request from the corresponding author.

Additional Contributions: We thank Gerald Kominski, PhD (University of California, Los Angeles), for his invaluable economic assistance in preparing the manuscript, for which he was not compensated.

References
1.
Jayne  D, Pigazzi  A, Marshall  H,  et al.  Effect of robotic-assisted vs conventional laparoscopic surgery on risk of conversion to open laparotomy among patients undergoing resection for rectal cancer: the ROLARR randomized clinical trial.  JAMA. 2017;318(16):1569-1580. doi:10.1001/jama.2017.7219PubMedGoogle ScholarCrossref
2.
Jeong  IG, Khandwala  YS, Kim  JH,  et al.  Association of robotic-assisted vs laparoscopic radical nephrectomy with perioperative outcomes and health care costs, 2003 to 2015.  JAMA. 2017;318(16):1561-1568. doi:10.1001/jama.2017.14586PubMedGoogle ScholarCrossref
3.
US Securities and Exchange Commission.  EDGAR company filings. https://www.sec.gov/edgar/searchedgar/companysearch.html. Accessed February 22, 2018.
4.
Stey  AM, Brook  RH, Needleman  J,  et al.  Hospital costs by cost center of inpatient hospitalization for medicare patients undergoing major abdominal surgery.  J Am Coll Surg. 2015;220(2):207-217. PubMedGoogle ScholarCrossref
5.
Childers  CP, Maggard-Gibbons  M.  Understanding costs of care in the operating room.  JAMA Surg. 2018;153(4):e176233. doi:10.1001/jamasurg.2017.6233PubMedGoogle ScholarCrossref
6.
Siu  J, Hill  AG, MacCormick  AD.  Systematic review of reusable versus disposable laparoscopic instruments: costs and safety.  ANZ J Surg. 2017;87(1-2):28-33. doi:10.1111/ans.13856PubMedGoogle ScholarCrossref
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