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The profound impact of the pandemic on the business of health care is still being calculated. The latest reports suggest that over three dozen hospitals went bankrupt in 2020, and the American Hospital Association estimated that hospital and health system losses totaled at least $323.1 billion at the end of 2020. Hospital Value Analysis Committees (VAC) will be under pressure to supply hospitals with the latest and greatest medical devices at the same time with considerably smaller capital expense budgets.
Greater emphasis is being placed on rethinking the way capital equipment is acquired. Hospitals are increasingly leaning on medical device companies for lower pricing, better terms, more attractive leasing and shared-risk models. As a result of the pandemic, capital equipment and intensive pricing models for procuring systems and equipment need to adapt and change.
One quickly growing area in post-pandemic recovery is the shared-risk model, where medical device manufacturers are willing to share the financial burden of recovery. A new approach gaining traction is a Digital Surgery-as-a-Service model, where surgical robots are operationally expensed on a per-usage basis, rather than procured by a large upfront capital purchase. This profound shift is happening now.
The first advantage of the Digital Surgery-as-a-Service paradigm is that it shifts medical equipment, such as surgical robots, to a mode where manufacturers can participate in the financial realities of hospitals, and establishs a healthier ongoing model that both fuels innovation and access to important technology.
Second, Digital Surgery-as-a-Service shifts the emphasis from recovering recovering sunk capital expenditures to a model that has less economic impact and makes medical considerations paramount. With no CAPEX costs to be recouped, the model changes to device utilization. Device manufacturers recoup their costs through increased use of their systems. In addition, the choices for the healthcare sector will no longer be limited to “one price fits all” offerings. Each case can be priced out according to what the surgeon chooses to utilize.
Thirdly, Surgery-as-a-Service models democratizes access to advanced technologies among healthcare providers. Local, community hospitals and Ambulatory Surgery Centers (ASC) are able to have access to the latest equipment and newest technologies.
The most successful hand movements and procedural steps and judgement can be captured and offered to other surgeons as recommendations or assistance to up level surgical skills.
Greater Variation and Choice
With Surgery-as-a-Service, single purpose, “one-trick-pony surgical robots” will give way to systems that can accommodate a variety of surgical procedures, use a variety of tools and be navigation agnostic. Surgical robots’ utilization will be driven by versatility in the types of procedures they can address and the functions they can perform.
Similar to the iPhone, it will be new apps that will drive utilization. As an example, consider hand-stabilization, which can have a transformative role in lengthy surgeries for MIS procedures and smaller work areas. Hand-stabilization can even provide surgeons with added dexterity for procedures that today are reserved only for the surgeons with exceptional skills.
Benefits for the Surgeon
The shift to Digital Surgery-as-a-Service will add an important capability to surgeon. For years, surgical robots have been great data collectors, able to capture the exact interactions between surgeon and patient in a way nothing else can.
Mining this data will produce two extraordinary benefits. First, the most successful hand movements and procedural steps and judgement can be captured and offered to other surgeons as recommendations or assistance to up level surgical skills. Such assistance could improve efficacy and outcomes, resulting in a better practice of medicine and better patient care. Second, this same data could be used train residents along with observing procedures in the operating room.
There is no denying the massive tragedy brought by the pandemic. Most families have been affected in some substantial way. At the same time, a profound crisis can bring some important innovation. After the 1918 Spanish Flu pandemic, a number of European countries put centralized healthcare systems in place and the United States adopted employer-based insurance plans. Epidemiology also advanced significantly, and the medical community began to address occupational and social conditions leading to ill health.
Post-pandemic recovery is ushering in a new age of how surgical robots are being acquired by hospitals. The recovery for hospitals and medical centers will take time, and all medical device manufacturers will need to do their part in aiding in the recovery for hospitals. While some of these ideas have existed for some time, the urgency and disruption of our times may pave way for some new and valuable innovation.
About the Author
Bruce Lichorowic, President and CEO of Galen Robotics, has made a career of focusing technology on problems and opportunities to drive substantial change and improve or save lives, including producing critical improvements in surgical robotics. He has also pioneered the commercial use of adaptive agents for simplifying data systems and real-time analytics for providing clarity and understanding. At Galen Robotics, Lichorowic leads the company in the development of ultra-precise robots designed to advance new frontiers of microsurgery combined with the application of learned knowledge and guidance based on real-time data.
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