By Tami Kamin Meyer
“If you get the medicine right, the finances take care of itself,” said Dr. Ronald Grifka, Chief Medical Officer of the University of Michigan Health-West. It is with that mentality that his 208-bed hospital began investing in robotic surgical equipment, appropriate facilities, and expertly trained medical staff a decade ago.
According to Grifka, also a Professor of Pediatrics at the University of Michigan Medical School, the interest in robotic surgery has seen a rapid uptick in the past few years.
Buying robotic surgical equipment is pricy. Grifka acknowledged his facility has spent between $500,000 to $2 million for individual pieces of robotic equipment, so purchases are a serious consideration.
Why invest in such an expensive venture? “Patient experience is extremely important,” said Grifka. While he acknowledged robotic procedures are more costly than standard surgical operations, the additional expense is outweighed by the patient’s quicker recovery, he said.
“Insurance companies and patients like robotic surgery, but hospitals may not love the quicker recoveries. But, that helps the patient experience,” said Grifka.
Affording the unaffordable
Despite the sizeable investment required to create and maintain a viable robotic surgical facility, American hospitals are finding ways to tap into the new technology.
“Even though profits are down, some hospitals may be able to secure funding or grants to help cover the costs of investing in robotic surgery technology. For those who aren’t able to do so, they may choose to invest in robotic surgery equipment because of the potential to increase profits in the near future, which will outweigh the short-term cost,” said Gregory Lorenzo, Chief Financial Officer of IBR.
While acknowledging the upfront costs of robotic surgical equipment and its residual necessities, “some hospitals believe the long-term cost savings will justify the investment,” said Lorenzo. Hospitals “ultimately benefit” when patients experience shorter recoveries and fewer complications from robotic surgery than standard operations because that outcome reduces the facility’s expenses, he said.
Why invest in robotic technology?
According to Lorenzo, there are additional reasons beyond long-term savings and Grifka’s contention that patient experience is the ultimate reason for hospitals to invest in robotic surgical equipment, theatres, staffing, training and more. They are:
- Competitive advantage
- Research opportunities
Medical facilities that invest in robotic surgical equipment gain a competitive advantage over hospitals lacking the cutting-edge technology. Patients seeking robotic surgery would be highly attracted to facilities offering those services.
Moreover, investing in robotic surgical equipment “may provide opportunities to conduct research or clinical trials on new surgical techniques or technologies, which could lead to new revenue streams or partnerships,” said Lorenzo.
Since recovery from robotic surgery is less complicated than from standard operations, patients need fewer follow-ups and fewer ER visits from complications, said Grifka.
According to Grifka, patients and insurance companies are not the only parties to benefit when a medical facility invests in robotic surgeries. Having that advanced equipment onsite in the hospital is also a “tremendous advantage in education so future medical professionals can be better from the start.”
When robotic camera imaging is used during a procedure, the surgeon and everyone in the operating theatre can see what is being done, said Grifka. “That can help teach others because they can see it on the monitor.”
Another benefit of robotic surgical equipment is that today’s cameras are high-definition and 3D, allowing for images to be displayed on a 3D monitor. The technology even allows for “remote surgical televising, which allows assistance from another surgeon watching, advising, and more,” said Grifka.
Robotic procedures benefit surgeons, too
While the usual goal of surgery is to improve the patient’s life, surgeons are known to suffer from performing them.
“Ergonomically, robotic surgery is much healthier for a surgeon. From leaning down so much, 30 to 60 percent of all surgeons develop neck strain, backaches, and spine complications. Often, they have to undergo surgery themselves,” said Grifka.
“If a doctor has to retire early due to pain, the health care system suffers,” he opined.
Performing surgeries robotically puts far less strain on the surgeon, physically and mentally. That means they can perform more operations in a day, work longer hours, and toil more years, too,” he said.
In the long run, that reality is a backdoor benefit of a hospital investing in robotic surgery, said Grifka. “A hospital doesn’t want to lose a trained robotic surgeon because they are valuable.”
Which facilities are investing
In addition to the University of Michigan Health-West, Grifka said “all of the more advanced healthcare systems realize robotics is the wave of the future. They are competing with IT costs, medical records, labor, supplies and more. All of that makes it more challenging to invest in robotics but it is a necessity.”
Grifka and his team are putting their money where their mouth is with their latest purchase – a new knee replacement robot which will provide standardized results for every surgery. The hospital invested “several million dollars” in that technology, said Grifka.
Other facilities known to have adopted robotic technology include:
- Rochester Regional Health’s United Memorial Medical Center
- University Hospitals Cleveland Medical Center
- The Ohio State University Wexner Medical Center
- MedStar Georgetown University Hospital
- San Ramon Regional Medical Center
- Sarasota Memorial Hospital
Are robotics primed for PE investment?
Lorenzo, whose decade of experience advising clients about investments and retirement planning, said robotic surgery may be attractive to PE investors. Private equity firms may be interested in investing in companies that develop and manufacture robotic equipment or in healthcare facilities equipped with robotic equipment.
In Grifka’s mind, the timing is right and the market for robotic surgery is ripe. While the industry is faced with “competing financial interests, robotic surgery lowers the cost of care.”
