Da Vinci Surgical Robot: Is it Worth the Cost? | Audet & Partners, LLP

Da Vinci Surgical Robot: Is it Worth the Cost?

Shares of Intuitive Surgical neared a historical high for the stock several weeks ago at $578 a share after announcing a rise in earnings of thirty percent per share during 2012. Investors have flooded to the robotic surgical device company’s stock because it has outpaced other large medical product companies. The company’s valuation at $24 billion is equivalent to 36 times its earnings for 2012, despite a spate of lawsuits for injuries allegedly caused by the da Vinci system, as previously reported by Audet and Partners, LLP.

The surgical robotic devices have been promoted extensively on the Internet, billboards and hospitals in the U.S. where over 75 percent of the over 2,500 da Vinci systems have been sold and installed. The robotic surgical system was utilized in 2012 in approximately 450,000 surgeries. Hospitals and other surgical centers are using the da Vinci system in nearly 85 percent of prostate surgeries even though the device was approved just 13 years ago for use in surgical procedures for prostate cancer.

While a rapidly growing number of surgical centers are conducting surgical procedures with the Da Vinci robotic system, a recent Barron’s article reported that some are skeptical that the company will continue to reign as a high-multiple growth stock. The robotic surgical devices can cost as much as $2.6 million with add-on packages and technical support. There are concerns that widespread use of the systems will escalate the already high cost of health care that currently constitutes approximately one-fifth of gross domestic product.

These costs do not include the expense $1,300 to $2,200 per procedure that the surgical center must pay and the annual service contract of $170,000. A report in the New England Journal of Medicine reported that the amortized cost of the da Vinci surgical system would increase the average cost of surgery by thirteen percent. The medical journal also indicated that the widespread use of these robotic surgical devices would drive up the cost of medical care in excess of $2.5 billion per year.

While splashy ads are being employed by hospitals that have purchased the da Vinci surgical robotic device offering better outcomes and accelerated recovery times, recent studies suggest that any benefits from robotic surgery over conventional surgery may be nominal. There has been a fair amount of speculation in the medical community about whether these nominal benefits justify the thousands of dollars in extra expense that patients are billed for robotic surgery.

Dr. Simon Kim of the Mayo Clinic in Rochester, Minnesota conducted an analysis and found that the average cost of robotic prostate surgery cost a patient $10,400 while the average cost of more conventional surgery (so-called radical prostatectomy) is only $8,900. Given that the clinical benefits of robotic surgery are unproven despite the elaborate claims of da Vinci and the surgical centers that have purchased the medical device, there is a legitimate reason to be concerned that hospitals will inappropriately push the procedure to recoup their capital investment.

These concerns about the expensive price tag of surgical procedures using robotic technology have been intensified by questions about the safety and clinical benefits of this more expensive surgical procedure. Many surgeons receive only limited training, which may compromise patient safety. These concerns explain the guarded forecast about the future growth of da Vinci stock despite its prior success.

If you have been injured by robotic surgery using the da Vinci Surgical System, our experienced robotic surgery injury attorneys at Audet and Partners, LLP offer a free consultation so that we can evaluate your legal claim and advise you of your options. We invite you to call us at (800) 965-1461 or submit our confidential case inquiry form to the right of this page.

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