The first time was such a hit, why not do it again? I refer, of course, to the marketing ploy used by Intuitive Surgical, Inc. when it introduced robotic surgery in the prostatectomy scene. Go with direct-to-consumer advertising to give the impression that the results from robotic surgery are better than from manual laparoscopic surgery. Make sure the early-adopter surgeons are on board and publicly proclaiming their great results. When it comes to men and the functioning of their penises, you can predict the result. Who can argue with that kind of success? The stock market rewarded the company handsomely.
But now the market for prostate surgery is saturated, so it's time to move to another type of surgery that raises anxiety, this one for women. Hysterectomies are the target. Again, let's use the heartfelt comments of patients to support the cause, while being soft on scientifically valid clinical studies.
Further, give the impression that there is extensive use of the machine for hysterectomies by saying, "100% of the top 50 cancer hospitals in the United States use the da Vinci Surgical system." While true, this statement omits what I surmise to be the actual case, that the vast majority of those machines are used for prostate surgery, not for hysterectomies.
Here, though, the professionals have spoken, and the words are not good for the company. Look at these comments by James T. Breeden, president of ACOG:
Many women today are hearing about the claimed advantages of robotic surgery for hysterectomy, thanks to widespread marketing and advertising. Robotic surgery is not the only or the best minimally invasive approach for hysterectomy. Nor is it the most cost-efficient. It is important to separate the marketing hype from the reality when considering the best surgical approach for hysterectomies.
At a time when there is a demand for more fiscal responsibility and transparency in health care, the use of expensive medical technology should be questioned when less-costly alternatives provide equal or better patient outcomes.
At a price of more than $1.7 million per robot, $125,000 in annual maintenance costs, and up to $2,000 per surgery for the cost of single-use instruments, robotic surgery is the most expensive approach. . . . A study of over 264,000 hysterectomy patients in 441 hospitals also found that robotics added an average of $2,000 per procedure without any demonstrable benefit.
Aggressive direct-to-consumer marketing of the latest medical technologies may mislead the public into believing that they are the best choice. Our patients deserve and need factual information about all of their treatment options, including costs, so that they can make truly informed health care decisions. Patients should be advised that robotic hysterectomy is best used for unusual and complex clinical conditions in which improved outcomes over standard minimally invasive approaches have been demonstrated.
Who will prevail in the court of public opinion, the company or the professionals? In light of the dearth of coverage of this issue by the medical press, I would ordinarily put my money on Intuitive. On the other hand, some Wall Street analysts now seem less sanguine. Suraj Kalia at Northland Capital Markets noted yesterday:
Intuitive now has to engage in lengthier discussions on price negotiations, both on capital sales & instruments. This is a shift over the last 6 - 9 months. Capital sales continue to be tough, and it is unclear to us what turns this tide around.
It seems some hospitals are asking for discounts (10% and more) on instruments and a global risk sharing program. Part of this discussion is compounded by an unused capacity of about 30% or so in U.S. hospitals.
More importantly, it seems hospitals are asking Intuitive Surgical to be a "partner" in their robotic surgery practices, rather than engage in aggressive marketing & pricing. Some hospitals, as was explained to us, have asked Intuitive to help in "rationalizing" procedures in order to "optimize" outcomes. Optimizing outcomes would have the benefit of making robotic surgery look cost-effective and clinically better, albeit at the expense of "weeding" out extra procedures giving the industry a bad rap.
Lowering prices in order to meet quotas results in margins being squeezed. Don't lower prices and you have a situation where hospitals perforce have to cut back on procedures or capital sales in order to justify economic viability.
But now the market for prostate surgery is saturated, so it's time to move to another type of surgery that raises anxiety, this one for women. Hysterectomies are the target. Again, let's use the heartfelt comments of patients to support the cause, while being soft on scientifically valid clinical studies.
Further, give the impression that there is extensive use of the machine for hysterectomies by saying, "100% of the top 50 cancer hospitals in the United States use the da Vinci Surgical system." While true, this statement omits what I surmise to be the actual case, that the vast majority of those machines are used for prostate surgery, not for hysterectomies.
Here, though, the professionals have spoken, and the words are not good for the company. Look at these comments by James T. Breeden, president of ACOG:
Many women today are hearing about the claimed advantages of robotic surgery for hysterectomy, thanks to widespread marketing and advertising. Robotic surgery is not the only or the best minimally invasive approach for hysterectomy. Nor is it the most cost-efficient. It is important to separate the marketing hype from the reality when considering the best surgical approach for hysterectomies.
At a time when there is a demand for more fiscal responsibility and transparency in health care, the use of expensive medical technology should be questioned when less-costly alternatives provide equal or better patient outcomes.
At a price of more than $1.7 million per robot, $125,000 in annual maintenance costs, and up to $2,000 per surgery for the cost of single-use instruments, robotic surgery is the most expensive approach. . . . A study of over 264,000 hysterectomy patients in 441 hospitals also found that robotics added an average of $2,000 per procedure without any demonstrable benefit.
Aggressive direct-to-consumer marketing of the latest medical technologies may mislead the public into believing that they are the best choice. Our patients deserve and need factual information about all of their treatment options, including costs, so that they can make truly informed health care decisions. Patients should be advised that robotic hysterectomy is best used for unusual and complex clinical conditions in which improved outcomes over standard minimally invasive approaches have been demonstrated.
Who will prevail in the court of public opinion, the company or the professionals? In light of the dearth of coverage of this issue by the medical press, I would ordinarily put my money on Intuitive. On the other hand, some Wall Street analysts now seem less sanguine. Suraj Kalia at Northland Capital Markets noted yesterday:
Intuitive now has to engage in lengthier discussions on price negotiations, both on capital sales & instruments. This is a shift over the last 6 - 9 months. Capital sales continue to be tough, and it is unclear to us what turns this tide around.
It seems some hospitals are asking for discounts (10% and more) on instruments and a global risk sharing program. Part of this discussion is compounded by an unused capacity of about 30% or so in U.S. hospitals.
More importantly, it seems hospitals are asking Intuitive Surgical to be a "partner" in their robotic surgery practices, rather than engage in aggressive marketing & pricing. Some hospitals, as was explained to us, have asked Intuitive to help in "rationalizing" procedures in order to "optimize" outcomes. Optimizing outcomes would have the benefit of making robotic surgery look cost-effective and clinically better, albeit at the expense of "weeding" out extra procedures giving the industry a bad rap.
Lowering prices in order to meet quotas results in margins being squeezed. Don't lower prices and you have a situation where hospitals perforce have to cut back on procedures or capital sales in order to justify economic viability.
Not robotic, but what say you about the physicians returning to BI?
ReplyDeleteLove the site content, as always.
ReplyDeleteA slight typo though - dearth, not dirth.
Oy, thanks!
ReplyDeleteOn MDs: It proves that treating people respectfully makes a difference.
I might point out, since there have been commenters on some of your other posts that the robot is better for prostate surgery, that there is no convincing evidence that the robot performs better on the two issues of paramount concern - post surgical incontinence and impotence.
ReplyDeleteAs for hysterectomies, good for ACOG for getting out in front of this one, for once. Intuitive persists in their 'belief' mode of advertising - perhaps they have to say that since there is no evidence.
nonlocal MD
How could we get the word out about this sort of thing? Is it possible to work with various patient groups to do so? Would risk management be interested? Once things go wrong, you know someone is going to be wanting something to blame.
ReplyDeleteThis kind of medical arms race benefits no one, in this case including their shareholders.
ReplyDelete