Currently, only two to five percent of all surgical procedures involve robotic-assisted surgical devices (RASDs). How could this change over the next few years?June 15, 2017
Modern-day robotic-assisted surgical devices (RASDs) are the result of the evolution of laparoscopic surgery combined with the adaptation of industrial robotic technology for human surgical use. The science and technology enabling the first use of a surgical robotic device dates to 1985 and has been enhanced with the many subsequent innovations. To date, RASDs have undergone two generations of technology advances resulting in a global proliferation of RASDs performing hundreds of thousands of procedures annually.
The entrepreneurs, surgeons, and scientists who have contributed to the manufacture of these devices have refined and, in some cases, expanded their reach globally. Fewer than 50 RASD original equipment manufacturers (OEMs) exist; their go-to-market strategies, business acumen, and ensuing financial performance remain under scrutiny to determine whether their business models, returns on investment, and market share are sustainable. One pioneering OEM, Intuitive Surgical Inc., has commanded a 100 percent U.S. market share for more than a decade in the general concept RASD category, a Class II medical device.
The legacy of RASDs, their perceived value to the healthcare ecosystem, and their scientific and medical relevancy in 21st-century medicine is still being debated by academics, surgeons, entrepreneurs, and scientists. Myriad challenges face RASDs in a value-based healthcare ecosystem, where bundled payments and cost per procedure may well determine the adoption or the abandonment of a futuristic unproven minimally invasive surgical capability.
Only two to five percent of all surgical procedures involve an RASD. Frost & Sullivan determined RASDs are entering a third generation of development: a surgically specific RASD design and utility moving away from the general surgical concept mentality of Intuitive Surgical’s da Vinci product line. This paradigm shift is due in part to the initial cost of a general-purpose RASD, which hovers between $1 million and $1.5 million. Most sales also require a 4- to 5-year service agreement that can cost upwards of $100,000 per year and a supplemental contract stipulating that all surgical supplies and instruments must be purchased from the same OEM brand exclusively.
Orthopedics has led this effort, focusing on lower extremity joint replacement RASDs offered by the likes of STRYKER-MAKO, OMNI, and Smith & Nephew. At the same time, Verily Life Sciences, a research division of Alphabet, Inc. and Johnson & Johnson’s Ethicon’s surgical supply company, recently partnered to form Verb Surgical. Verb Surgical has embarked on an aggressive effort to create miniaturized RASDs that will be available to all surgeons in what it is calling a Surgery 4.0 digital platform.
Conceptually, its utility and enhanced haptics will allow surgeons to engage an RASD in an actual open surgical field. This innovation negates the current requirement for physicians to choose between RASD and historical surgical technique prior to surgical intervention and would eliminate the need to choose between RASD and a conventional surgical technique.
Much will be debated in the next few years about whether RASDs will be adopted as the new standard of surgical care or limited to singular procedures (MS-DRGs) as prescribed by reimbursement policy and/or surgical professional organizations such as the American Medical Association and the American Association of Orthopedic Surgeons. Ultimately, RASD OEMs must demonstrate an acceptable margin for sustainability as do the hospital and health systems in which they will be placed. If there is no statistically significant growth in RASD surgical procedures over the next two to three years, OEM costs may remain prohibitive, though if OEMs change their financial structure to allow leasing of RASDs or compensation based on the number of procedures, utilization could flourish.
Copyright © 2017 Frost & Sullivan
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