Thinking Holistically About Healthcare Costs And Long-Term Value

Globally, healthcare costs are rising at an unsustainable rate. Expenditures are expected to increase worldwide from $7.8 trillion in 2013 to more than $18 trillion by 2040 [i]. Unsurprisingly, healthcare costs represent an increasingly larger proportion of global GDP – rising from 8.6% in 2000 to nearly 10% today [ii]. There is no doubt that helping our healthcare customers effectively address escalating costs is critical to the ongoing success of their programs and ours.

The challenge is particularly acute in the U.S., where the Centers for Medicare and Medicaid Services predict that healthcare spending as a percentage of GDP will increase to nearly 20% by 2025 [iii]. Per person, the U.S. spends about twice as much on healthcare as Germany, France, the UK or Canada [iv].

[iv] OECD (2017), Health at a Glance 2017: OECD Indicators, OECD Publishing, Paris. http://dx.doi.org/10.1787/health_glance-2017-enOCED (2017)

As Chief Commercial Officer at Intuitive, a global leader in minimally invasive care and pioneer of robotic-assisted surgical technology, the cost of healthcare consistently surfaces in my conversations with hospital executives, healthcare providers, payers and others. Value and delivering value-based technologies and solutions are central to how these audiences think about healthcare delivery. That’s why Intuitive is committed to working with our customers to maximize the investments they make in our systems and technologies to improve patient outcomes, deliver clinical benefit and drive economic value.

Calculating value in healthcare is challenging throughout the world. Perceptions of value vary greatly, depending on how broad or narrow a lens on cost – and value – governments, payers and providers have. In the case of a surgical system or intervention, for example, are they looking at costs incurred and value delivered throughout the duration of a patient’s journey in the healthcare system? Pre- and post-operatively for a year or more? Or, just the costs observed and incurred in the operating room?

Simple analytical approaches have historically focused on the upfront costs associated with acquiring drugs, medical devices or other technologies, and the costs associated with their use. That’s only part of the equation. Measuring short- and long-term value in healthcare can be complex, and is made more so by the variety of methodologies that are influenced by geography, author preference, and more. And these analyses can be clouded by the belief that new or innovative devices and technologies add to – rather than help address – rising healthcare costs.

Any true assessment of value must look at both the total cost to treat a patient through the continuum of care and the value delivered throughout this journey. This more comprehensive approach showcases longer-term patient benefits and costs savings and is markedly different than assessments that focus only on the point of healthcare intervention (e.g., surgery) [v].

The relationship between cost and value is the focus of the 2015 Health Affairs article “Robot-Assisted Surgery for Kidney Cancer Increased Access to a Procedure that Can Reduce Mortality and Renal Failure”[vi]. The authors conclude:

“Our study suggests that partial nephrectomy delivers sizeable benefits to patients with kidney cancer. It also suggests that robot-assisted surgery may increase rates of partial nephrectomy among appropriate patients, without increasing inappropriate use of the procedure. The value of robot-assisted surgery accrues over a long time, whereas the costs are up front. This implies that short-term analyses could mistakenly conclude the costs of the technology outweigh the benefits.”

A more holistic assessment of cost and value requires gathering and analyzing data from many sources, including electronic medical records, registries and more robust clinical and economic databases. A 2015 German study that assessed post-operative data of 1,500 patients, coupled with longitudinal reimbursement cost/health insurance data, found that the clinical advantages of robotic-assisted radical prostatectomy resulted in reduced post-operative health insurance costs in comparison to open surgery [vii]. The authors state: “from the perspective of the patient, the service provider and the health insurer, a reimbursement solution where the money follows the quality of care would lead to an improved system [viii].”

At Intuitive, we are investing in data analysis, clinical and economic evidence generation and machine learning that will contribute to a deeper understanding of healthcare cost and value through robust and well-supported longitudinal analyses. In doing so, we can provide hospitals and healthcare systems with customized analytics to understand – and model/project – their overall costs and savings.

It’s also important that “value” isn’t just a code word for cost reduction [ix]. We can’t lose sight of what these costs are incurred in service of. Medical device innovation and investment should be aligned with the Institute of Healthcare Improvement’s (IHI) “Triple Aim” of healthcare – improving the patient’s experience of care, improving the health of populations, and reducing the per capita cost of healthcare [x].

While working to help deliver economic value, the passions that really drive Intuitive are rooted in providing technologies and solutions that help surgeons improve patient outcomes. Today, complications in certain open surgical procedures exceed 30% [xi] and more than $41 billion is spent on hospital readmissions in the U.S [xii].

We believe the combination of robotic technology, vision, data analytics, and advanced training can make a difference. Patients should experience better and more consistent outcomes regardless of where they live or what surgeon they see. Similarly, technology such as robotic-assisted surgical simulators can help surgeons get through their learning curve quicker and understand anatomy better, which may ultimately help ensure that important measures, from cancer margins to functional outcomes, are addressed in a minimally invasive manner.

Built on two-plus decades of proven real-world experience with thousands of hospitals, surgeons and patients around the world, these are the considerations that contribute to Intuitive’s definition of delivering value: an understanding of customer and stakeholder needs during a time of rising healthcare costs, coupled with an unwavering commitment to innovate for minimally invasive care to increase predictability for surgeons and hospitals and help improve outcomes for patients.


Disclaimer: Patients should talk to their doctor to decide if da Vinci® Surgery is right for them. Patients and doctors should review all available information on non-surgical and surgical options and associated risks in order to make an informed decision. 

Serious complications may occur in any surgery, including da Vinci® Surgery, up to and including death. Serious risks include, but are not limited to, injury to tissues and organs and conversion to other surgical techniques which could result in a longer operative time and/or increased complications. For Important Safety Information, including surgical risks, indications, and considerations and contraindications for use, please also refer to www.davincisurgery.com/safety and

Individual surgical results may vary.

In order to provide benefit and risk information, Intuitive Surgical reviews the highest available level of evidence on representative da Vinci® surgical system procedures. Intuitive Surgical strives to provide a complete, fair and balanced view of the clinical literature. However, our materials should not be seen as a substitute for a comprehensive literature review for inclusion of all potential outcomes. We encourage patients and physicians to review the original publications and all available literature in order to make an informed decision. The references provided here are a few examples of literature published for da Vinci Surgery. These references are not a substitute for a comprehensive literature review. Additional clinical literature is available at pubmed.gov.

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