Medical Innovation: When do the costs outweigh the benefits?

WHEN Sunnyvale, Calif.-based Intuitive Surgical hit the market in 1999 with its surgical robot, da Vinci, the company and many of its early adopters hailed the new technology as a revolution that would benefit patients, surgeons and the health care system as a whole. Da Vinci combines high-definition visual tools with robot-guided medical instruments that allow surgeons to do complicated procedures using a few tiny incisions. The da Vinci system, which is widely used in urologic surgeries such as the removal of prostate tumors, has been shown by Intuitive and outside researchers to reduce post-surgery complications and shorten hospital stays.

But do fewer complications and faster recovery times result in meaningful financial savings for the health care system as a whole? Or does the cost of high-tech medical innovations outstrip any benefits they might provide? These questions are weighing heavily on the minds of health care economists, particularly as the movement towards health reform is putting pressure on hospitals, physicians and insurers to keep a lid on rising costs.

And while the debate over the effectiveness and costs of new medical technologies has been overshadowed this week by the shutdown of the federal government — led by a Republican faction that wants to tie government funding to a delay in implementation of the Affordable Care Act — the issues that debate raises will play an important role in ongoing discussions of the role of innovation in controlling health care costs.

Sticker Shock

In May 2012, Wharton health care management professor Ezekiel Emanuel blasted Intuitive’s da Vinci system in a New York Times editorial as “a pseudo-innovation — a technology that increases costs without improving patients’ health.” Emanuel, who is also chair of the medical ethics and health policy department at the University of Pennsylvania’s Perelman School of Medicine, expressed his concern that too much capital investment would be directed to “flashy” innovations such as robots rather than technologies that cost less but may produce more benefits, such as smartphone applications and wireless home monitoring systems for patients with chronic diseases.

Wharton health care management professor Mark V. Pauly says one of the shortcomings of the cost-effectiveness debate is that the loudest voices are often those of the doctors and the economists — not the patients. “The critics say in the long run that there’s no difference in outcomes,” he notes. “The main difference is in the short run, where there is a shorter length of stay, fewer complications — a less unpleasant experience for the patient involved. I don’t think you ought to regard that as being of no value. If I’m a patient, I don’t care about the cost. I just want to do the best thing [for myself].”

“Anything that makes the process shorter, which robotic surgery does, is somethiNew Arrivals