February 10, 2010      

Despite the worldwide recession and high installation and capital equipment costs, the surgical robotics market is expanding at a rapid pace. For some types of surgical procedures, robotically assisted surgery is now becoming the standard technique.

While the medical benefits that robotic-assisted surgery provides patients and surgeons have been extensively documented, other drivers—some quantifiable, some not—are also promoting the use of robots and robotic-assistive techniques for an increasing number of surgical procedures. The end result is an unstoppable market ripe with opportunity for investors and entrepreneurs.

Bump in the Road for MIS
A recent Harvard Medical School study, viewed by many as critical of robot-assisted surgery, did not in fact address the subject, but oddly enough it highlighted many of the medical benefits of the approach. The study, conducted by surgeons and published in October 2009 in the Journal of the American Medical Association (JAMA), found that cancer patients who underwent prostate removal using minimally invasive surgery (MIS), or laparoscopic techniques, were more than twice as likely to experience incontinence or impotence 18 months after the procedure when compared with those who had their prostates removed using more traditional open-incision techniques. This study raised fears in certain quarters that the findings would have a negative impact on the booming surgical robotics market.

[Editor’s Note: With MIS techniques, long-handled instruments are inserted through a number of small incisions in the skin to operate deep within the body using flexible and finely controlled fiber-optic camera-tipped wands—endoscopes—for guidance. MIS techniques often duplicate more traditional surgical techniques except for the size of the incision that gives the surgeon access. Laparoscopy is an MIS procedure in which a laparoscope visualizes the interior of the abdominal or pelvic cavity. Robotics technology can increase the precision of minimally invasive (laparoscopic) techniques and reduce the difficulty of performing them.]

The research, which was widely reported in the general press, was held partly to blame for a drop in the stock price of Intuitive Surgical Inc. from $257.49 on the day the study was published to $246.35 two weeks later. Intuitive Surgical is the only manufacturer of U.S. Food and Drug Administration (FDA) approved robotic-assistive devices for minimally invasive prostatectomies.

Number and Types of MIS Procedures Increasing
The Harvard study was responsible for consternation among investors and other observers because it demonstrated an increase in complications resulting from a procedure that has been shown in many previous studies to decrease complications, reduce recovery time for patients, and lower the overall cost of both the procedure and follow-up care. Quantified, positive results are the very reason that the number of MIS procedures has been steadily increasing, both in absolute number and in the type of clinical procedures, since the technique was first introduced as an exploratory procedure for gynecological and orthopedic problems in the 1960s. In fact, some laparoscopic MIS techniques have become the standard for certain procedures, even for surgeries that formerly required large incisions such as gastroenterological, vascular, and thoracic surgery.

Most robot-assisted surgery automates minimally invasive surgical procedures. The report, however, was not a condemnation of robot-assisted techniques per se, or of laparoscopic prostatectomies. Its authors compared Medicare data for almost 9,000 patients treated between 2003 and 2007. The percentage of laparoscopic procedures that used robotic assists increased drastically during that time, but the study’s authors did not differentiate between robotic and nonrobotic MIS procedures.

Unexpected Results
The authors of the Harvard Medical School study did find that minimally invasive techniques were equally effective in treating cancer compared with standard surgeries, and that hospital stays for those patients who underwent laparoscopic techniques averaged two days versus the three days of recovery required for those who underwent standard procedures. Patients who had laparoscopic procedures also experienced fewer respiratory problems and internal scarring. Further, blood loss for MIS patients was much less. Only 3 percent of MIS patients required blood transfusions, compared with 21 percent of those who underwent traditional surgery.

What raised red flags in the study was a doubling of genital and urinary function complications 30 days postsurgery for patients who had laparoscopic procedures. About 5 percent of laparoscopic patients had complications versus 2 percent for those who underwent open-incision procedures. After 18 months, laparoscopic patients continued to report twice the rate of incontinence and erectile dysfunction.

While disturbing, the results are not that surprising. Almost all forms of laparoscopic surgery carry with them a higher rate of some long-term complications when compared with traditional open-incision procedures. During MIS procedures, surgeons operate by remote control—manipulating small instruments that are inserted through a hollow tube called a trocar, tracking their own progress using video screens displaying images from fiber-optic-mounted cameras inserted through a second small incision. The trocar and other instruments must be inserted blind, so the potential for damage to internal organs is higher. Visibility is lower as well. For example, it is far less likely that a surgeon operating through a tube will spot a developing problem in a blood vessel just out of view of the camera.

Advantages of MIS Procedures
Studies comparing the effectiveness and complication rates of laparoscopic procedures versus standard methods—more than 800 of which have been published during the past five years, according to Intuitive Surgical—overwhelmingly demonstrate that laparoscopic procedures reduce patient risk and carry a far lower healthcare cost overall. For example, a 2002 study published in the journal Archives of Gynecology and Obstetrics found that laparoscopic hysterectomies were as effective at treating women with endometrial cancer as traditional hysterectomies, but drastically reduced recovery times, blood loss, and the risk of wound infections.

Similarly, the JAMA study in question concluded that laparoscopic surgery was equally effective at treating cancer compared with traditional methods. The study’s authors noted that laparoscopic techniques also cut the risk of major surgical and respiratory complications, along with other immediate threats to the patient’s life.

Automating MIS Procedures
There are many other reasons why the surgical community has embraced laparoscopic techniques, including a reduction in recovery time, overall cost, and scarring. However, the difficulty of performing non-assisted laparoscopic techniques and an increased need for precision have contributed to the growth of robotic-assistive devices for laparoscopic surgery. Systems such as Intuitive Surgical’s da Vinci Surgical System work in the same way that “fly-by-wire” systems make flying simpler for pilots—by taking over direct control of the control surfaces and simplifying the hand movements pilots or surgeons must make to get instruments to do what they want.

Fig_1

The number of academic papers addressing various aspects of robotically assisted surgery, like that of MIS in general, is large and growing at a rapid pace. This alone is an indication of the strength of the market going forward. The majority speak to clinical results, often comparing robotically assisted procedures with traditional approaches. The results are largely favorable.

Robotic-assistive surgical techniques are not to the point where they can replace current methods for many classes of surgeries. For example, in numerous cases it is impossible to suture wounds quickly enough using laparoscopic tools or to simply cut away diseased tissue.

In addition, robotic-assistive devices do not provide the feel many surgeons rely on to help guide them through tissues of varying depth, density, and resistance. Such capabilities are under development, but are not widely available even at costs that range above $1 million per unit. While robot-assisted surgery is not always a replacement for traditional techniques, it can be applied in a complementary role, both for MIS and for open-cavity surgery.

Practice Makes Perfect
Well-engineered robots are not enough to make a given robotically assisted laparoscopic procedure a success or to make a robotic-assistive system itself accepted by the market. Experience and adaptation on the part of the surgeon, surgical support staff, and device manufacturers are critical.

Studies clearly demonstrate that the numbers of surgeries a particular surgeon, surgical team, or hospital conduct are far better predictors of a positive outcome than the specific technique involved. The same applies to robot-assisted surgery. Most surgeons who use robotic-assistive systems do too few to get really good at what can be a tricky and subtle procedure.

For surgery in general, and robot-assisted surgery in particular, practice makes perfect, a fact acknowledged by Dr. Jim Hu of Brigham and Women’s Hospital in Boston. Hu, lead author of the JAMA study, has performed more than 700 robot-assisted prostate surgeries. Following the release of the Harvard study, Hu noted in an interview with the Associated Press that he had performed several hundred laparoscopic prostatectomies before he was satisfied with the low levels of complications in his patients.

The FDA requires that surgeons take a two-day course before using robotic-assistive devices in prostate surgery and be monitored during their first few cases by a surgeon who has completed a minimum of 20 procedures. According to Hu, the average U.S. surgeon, however, still only performs approximately 12 robotically assisted surgical (RAS) procedures per year. As robot-assisted surgery becomes more commonplace and surgeons perform more procedures, the complication rates will decline even further.

Traditional Measures of Success
For investors, the number of procedures is less an indicator of positive outcomes and more an indicator of a successful product. It is not enough to examine how well a surgical device company is run, or how well its device performs in trials. It is also necessary to quantify the mean time between failure, cost of repairs, and likelihood of surgeons to repeatedly use the device, as well as the ability of hospitals to buy, install, and support the technology. These analyses, though more common for less abstruse industries such as data processing or manufacturing, are critical for evaluating the “success” of any given system, including robotic-assistive surgical technology.

If a device breaks down too often to be used frequently, requires supplies or skills unavailable to hospitals, or is too difficult or too unpleasant for surgeons to use frequently, then it will not be used often enough to deliver the kind of results required. It may be possible to justify the cost to develop, buy, and launch a spacecraft if it can be used only once, but the same is not true of a surgical-assist system. Without frequent use, no robotic-assistive system is practical on either a cost basis or as a reliable tool for healthcare.

Benefits to Surgeons
The primary benefits of laparoscopic surgery are the small incision size and comparatively low blood loss. According to a 2005 analysis by Drs. Mark Talamini and Eric Hanly of The Johns Hopkins University School of Medicine, robot-assisted surgery is beneficial in other ways as well.

Talamini and Hanly note that nonrobotic laparoscopic tools provide only 4 degrees of freedom of movement, compared with 6 for robotic devices (and for the human hand). Also, a three-dimensional, magnified image of the point of surgery gives a far clearer view than is possible with open surgery. Robotic manipulators, they continue, also provide surgeons with improved sewing and resecting ability compared with nonrobotic manipulators, and have the potential to provide better control than even a human hand by reducing the chance of mistakes due to cramps, weakness, tremors, or other human frailties.

Surgery, unlike knowledge work in general and most other areas of medicine, requires tremendous manual dexterity, coordination, and stamina. The best surgeons can do the work they do because of their experience and knowledge, but also because of the skill in their hands. Just as incomparable knowledge of a concerto does not necessarily make a good pianist a great one, the finest surgeons are not always those who are the most knowledgeable, but those with the best combination of knowledge and manual dexterity.

Robotic-assistive systems can increase the manual dexterity of knowledgeable surgeons, putting within their reach procedures they could not perform before. Using robotically assisted interventional systems, procedures currently available from only a select number of topflight hospitals will be accessible—either in person or via telesurgical sessions—in far more locations.

Attracting Patients
Approximately 185,000 American men are diagnosed with prostate cancer every year, and there is very little consensus among doctors on how to treat them. A poll of physicians conducted by the New England Journal of Medicine and published earlier this year showed respondents split evenly on how they would respond to a positive test for low-grade prostate cancer in a 63-year-old man. About one-third each said they would recommend surgery, radiation therapy, or closely monitor the cancer to see how aggressively it grew. National Cancer Institute figures show that 90 percent of early-stage cancers that are still confined to the prostate can be driven into remission for five years or more, no matter what treatment is used.

With little consensus among doctors, and relative homogeneity among expected outcomes, the choice of how to treat prostate cancer is often left to the patient. That choice typically depends far less on medical or health-related information than it does on personal preference, fear, impatience, or other factors. However, fewer than 10 percent of prostate cancer patients decide to wait to see how the disease will develop.

A fear of serious health problems, along with the freedom to choose both healthcare providers and treatments, has led hospitals in Boston and other areas to actively market their surgeons. For example, billboards along the Massachusetts Turnpike advertise the skill of Dr. Ingolf Tuerk, chief of urology at St. Elizabeth’s Medical Center, which, along with Boston Medical Center, has launched an advertising campaign to draw surgical patients away from the more-famous Brigham and Women’s Hospital, where Hu practices, and Massachusetts General Hospital (MGH). Hospitals are also using robotics as a marketing tool. Quantified clinical results indicate that robotics technology can produce better outcomes and more cost-effective processes. Moreover, stories about the positive benefits of robotically enhanced procedures are widespread in the general media, resulting in the common perception that “robotic” solutions produce better outcomes.

As a consequence, hospitals are actively promoting robot-assisted surgery for prostate cancer treatment, as opposed to other technology-assisted therapies such as modulated radiation or cryoablation (using a long needle with a super-cooled tip to freeze and kill tumor cells), which can be just as effective and far less expensive than robot-assisted surgery. Over the past eight years the percentage of minimally invasive radical prostatectomies conducted using robotic-assistive devices has risen from 1 percent to more than 70 percent, according to estimates by Intuitive Surgical.

Robotics as a Competitive Differentiator
Although the JAMA article focused on prostate surgery, robotic-assistive systems are a vital part of hospital marketing plans for other types of surgery as well—including gastric bypasses, hysterectomies, and vascular, thoracic, and cardiac surgeries.

Surgeons understand that robotic interventional systems attract patients—and are an important way to keep themselves and their hospitals in business. As an expensive, highvisibility service whose impact is obvious and immediate, surgical departments pull a lot of weight with administrators who sign off on the purchase of high-ticket items, including robotic-assistive surgical systems.

In a 2007 blog entry, Paul Levy, president and CEO of Beth Israel Deaconess Medical Center—one of the Harvard-affiliated hospitals that along with MGH and Brigham form the core of Boston’s world-famous network of hospitals—lamented that surgeons were pressing him to spend more than $1 million on robotic-assistive systems despite the lack of research clearly demonstrating their superiority over nonrobotic procedures. The surgical staff, he noted, predicted that without the robotic system, the number of prostate surgery patients the hospital could attract would plummet by 2010 and the hospital would become a nonentity in the regional market for prostate care.

The staff understood the value of robot-assisted surgery as a marketing tool, and in the fiercely competitive market for healthcare in Boston, it is a point that carries a great deal of weight. They also noted that robot-assisted surgery often results in shorter patient hospital stays, and can increase quality, consistency, and safety of treatments. By November 2008, Levy had approved purchase of the system.

Hospitals not only compete for patients, but they also vie for top surgical talent and the greatest levels of support and compensation from insurance companies, government, and other payers. Many of those, under pressure from stockholders and regulators to drive down costs without sacrificing business, prefer to deal with healthcare providers who employ the newest technology and staffs trained on the latest techniques.

The favorable opinion that the general public, surgeons, healthcare professionals, and insurers have toward robot-assisted surgery bodes well for investors in Intuitive Surgical and other robotic-assistive device makers. Despite the minor drop in stock price following the JAMA study, Intuitive Surgical’s stock price has continued to rise, hitting an all-time high of $280 by mid-November. That price reflects a steady five-year increase in stock price of more than 850 percent, which reflects the increasing importance of robot-assisted surgery in general and of minimally invasive prostatectomies in particular.

Demographic Drivers
As the population of the United States and other westernized countries ages, the number of agerelated surgeries will increase. Providers of robotic surgical assistants are developing products that target specific procedures, including knee and hip replacement, which are expected to rise sharply. Competition for customers, along with revenue from both insurance carriers and government sources, will also continue to swell among healthcare providers regardless of the final result of congressional negotiations over reform of healthcare insurance policies.

Unstoppable Growth
The success of Intuitive Surgical on Wall Street, along with the medical and business benefits that robot-assisted surgery provides to patients, surgeons, and hospital administrators, portend a positive future for manufacturers of, and investors in, robotic-assistive surgical systems. Robotics Business Review expects to see continued steady growth in the market overall and broader adoption of robotic assistants for new surgical procedures. Compared with other industries, however, technical advancement, approvals, and adoption rates within the medical devices industry are slow, particularly with regard to surgical systems. As a result, the growth curve will not rise drastically during the next 12 months. Nonetheless, that growth will occur; at what rate will be dependent on funding for research and capital acquisition, as well as payer policies.

The Bottom Line
It is the opinion of Robotics Business Review that the proliferation of robotic surgical devices is unstoppable. The potential benefits in the advancement of specialized surgeries, improvement of routine procedures, and reduction in costs, pain, and recovery times, along with other benefits, are simply too great for patients, surgeons, hospitals, or insurance companies to ignore:

  • Minimally invasive surgery provides advantages over traditional methods, and as a result the number of MIS procedures is steadily increasing, both in absolute number and in the type of clinical procedures available.
  • Robot-assisted surgery often automates MIS procedures.
  • The number of academic papers related to robot-assisted surgery is large and growing at a rapid pace, which is an indication of the popularity and relevancy of the topic
  • Robotics technology addresses many of the limitations of existing MIS techniques, enhances the capability of existing systems, and increases the number of procedures to which MIS techniques can be applied.
  • Robot-assisted surgery is being used to complement traditional procedures.
  • Robot-assisted surgery provides real, quantifiable benefits to patients, surgeons, and hospitals.
  • Hospitals are using robot-assisted surgery as a marketing tool to attract patients and surgeons, as well as support from the government, insurance companies, and other payers.
  • Demographic shifts due to an aging population in industrialized countries will result in more robot-assisted surgeries.

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