Mira 2011 Athens Business Class Vassilis Bardis Athens Medical Center

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Mira 2011 Athens Business Class meeting V. Bardis Athens Medical Center

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Mira 2011 Athens Business Class Vassilis Bardis Athens Medical Center

  1. 1. Investment Business Plan for aRobotic Surgery Program. Athens Medical Center<br />VASSILIS BARDIS<br />COO ATHENS MENTICAL CENTER<br />DLSHTM , MSc HSM.<br />
  2. 2. 1983 : foundation of Athens Medical Center<br />Today, leading role in the field of health care in southeastern Europe.<br />Listed in Super brands catalogue<br />Forbes Magazine ranks us among the 200 most important companies in the world<br />European Business Magazine : 100 most important Companies<br />President of Athens Medical Group, Dr. G.Apostolopoulos<br />
  3. 3. ATHENS MEDICAL NETWORK<br /><ul><li> 7 modern hospital Units for high-quality health care </li></ul> services<br /><ul><li>6 of them in Attica –Athens area
  4. 4. 7th : Thessaloniki –Transbalkanic Center
  5. 5. “perhaps the most modern hospital unit in Europe” </li></ul>G.Britain, Imperial College Medical School<br /><ul><li>1.200 hospital bed
  6. 6. 3000 employees
  7. 7. Since 21-1-2009 agreement with another large private hospital “ErrikosDynan” for opening of Gynecologic Clinic of 147 beds, ICU, neonatal ICU, day-clinic</li></li></ul><li><ul><li>> 40.000 Nursing days / year
  8. 8. > 15.000 patient / year
  9. 9. > 9.000 surgeries /year
  10. 10. > 80.000 outpatients / year</li></li></ul><li>Business plan development<br />Establishment of an economic model  crucial <br />Accurate due diligence <br /> economic boundaries of<br /> each institution.<br />B. Rocco1,3, A. Lorusso2, R. F. Coelho3, K. J. Palmer3, V. R. Patel3<br />
  11. 11. The successful strategic and business plan requires not only the evaluation of robotic costs, but the evaluation of relative costs such as lost labor cost e.t.c which have influence in patients decision making<br />
  12. 12. Development of the business plan <br />Requires an evaluation<br /><ul><li>of direct costs
  13. 13. of the associated material, staff recruitment and/or staff training</li></ul>Possible operating room (OR) modifications necessary <br />->to support the console and other equipment. <br />->recruitment of a leading surgeon or his development.<br />
  14. 14. Evaluation of the growth potential<br />key element <br />Use market analysis to estimate the impact of the new program on the institution.<br />Additional aspects: <br />study of the population and the competition, <br />analysis of reimbursements <br />payers<br />
  15. 15. The Surgical Volume<br />strictly connected to the learning curve and to the quality of outcomes<br />three to five cases per week during the initiation of the program are necessary to obtain continuity in the learning curve (Ohio State Uni).<br />
  16. 16. Establishment of an economic model<br />Crucial<br />With Activity-based costing and management (ABC) or alternative models<br />
  17. 17. ABC<br />Acosting model that <br />identifies activities in an organization <br />assigns the cost of each activity resource to all products and services <br />it assigns more indirect costs (overhead) into direct costs.<br />
  18. 18. Additional costs ( per case )<br />Personal costs (per day)<br />Personal costs (per day)<br />Preoperative<br />Surgery<br />Material costs (per day)<br />Material costs (per day)<br />Cost of capital (per day)<br />Cost of capital (per day)<br />Administration costs (per day)<br />Personal costs (per day)<br />Anesthesiology<br />Personal costs (per day)<br />Material costs (per day)<br />Total cost<br />Operative<br />Material costs (per day)<br />Cost of capital (per day)<br />Cost of capital (per day)<br />Consumables<br />Robotic operation (per day)<br />Administration costs (per day)<br />Laparosc. operation (per day)<br />Amortization<br />Personal costs (per day)<br />Robotic system (per day)<br />Postoperative<br />Material costs (per day)<br />Laparosc. System (per day)<br />Operating room<br />Ward<br />Cost of capital (per day)<br />Administration costs (per day)<br />Principle of the cost analysis<br />
  19. 19. Cost of robotic surgery relative to alternatives<br />
  20. 20. The fixed and variable costs for robotic surgery higher than conventional laparoscopic or open surgery<br />The OR costs of robotic surgery higher due to an increased length of the procedure over open surgery <br />Comparable total costs (fixed, variable, OR, and hospital stay) <br /> By considerable shortening the length of hospital <br />Conventional laparoscopic surgery has<br /><ul><li>the minimally invasive benefits of robotic surgery
  21. 21. BUT less expensive due to lower variable costs.</li></li></ul><li>For procedures where a minimally invasive approach can be shown to significantly decrease hospital stay and for which conventional laparoscopy has a prohibitively long learning curve, robotic surgery may be cost effective.<br />
  22. 22. In current economic climate it is equally important for medical institutions and patients alike to consider the financial impact of treatment decisions.<br />
  23. 23. ABC<br />Establish the true cost of its individual products and services <br />Able to eliminate those which are unprofitable <br />Able to lower the prices of those which are overpriced.<br />
  24. 24. Purchase of a robotic system<br />a significant cost associated with da Vinci’s purchase<br />$1.2–1.7 million USD <br />per case disposable fee for the robotic instruments; $200 per instrument used<br />maintenance contract of $100,000 USD yearly per system<br />
  25. 25. Cost analysis - Economic feasibility check<br />the cost of the surgery, <br />2) the reimbursement (according to the different health systems). <br />
  26. 26. Cost of surgery <br />analysis of the variable costs and the fixed costs<br />
  27. 27. Variable Costs<br />related to all those activities that are necessary to produce the surgical performance (such as disposable tools, medications etc.). <br />
  28. 28. Fixed costs <br />represented by the overall OR time dedicated to robotics and the purchase of the system.<br />a high surgical volume center can have an impact in terms of variable costs reduction; <br />
  29. 29. Reduction of cost<br />hence, the best chance to increase surgical volume and therefore to reduce costs <br />the use of the da Vinci system with our surgical teams, as gynecologists, general surgeons and other specialties.<br />
  30. 30. Cases per year in Athens Medical Center<br />
  31. 31. Most Frequent Robotic Procedures<br />
  32. 32. Robotic Laparoscopy and Prostatectomy Cases per year in Athens Medical Center<br />
  33. 33. Mean Robotic cost per procedure in Athens Medical Center<br />
  34. 34. L.o.S per relative procedures in Athens Medical Center<br />
  35. 35. Comparing Alternatives to a given health intervention (x)<br />Costs more<br />Robotic procedure’s point<br />Alternative is worse in both respects<br />More Effective<br />X<br />Less Effective<br />Alternative is better in both respects<br />Costs less<br />Status quo<br />
  36. 36. Initiation of the program<br />Challenging <br /><ul><li>multiple members of the team are learning the technology and their own personal roles on the team</li></ul>Docking and undocking<br />Use of disposable instruments<br />Assisting at the bedside far from the console<br /><ul><li>Learning curve of people</li></ul>Need to define which robotic procedures need to be performed at the beginning (cholecystectomy?)<br />
  37. 37. Administrative<br />Dedicated robotic program manager to<br />Coordinate administrative staff<br />Connect clinicians’ work and marketing plan<br />Website management<br />Patients’ information <br />
  38. 38. Implementation<br />Dedicated OR room<br />The robotic team<br />The leading surgeon<br />The operating room nursing staff (SN)<br />The surgical physician assistant (PA)<br />Surgical fellows and residents<br />
  39. 39. The OR<br />Necessities: <br /><ul><li>Space limitations (surgical console, a surgical cart and the da Vinci)
  40. 40. Multiple assistants
  41. 41. Specific stock (short life of many disposable instruments)
  42. 42. Extra instruments (in case of malfunctioning).</li></ul> Large OR (60 m2) / LCD screens / tech controls<br />
  43. 43. The leading surgeon<br /><ul><li>Oversee the clinical aspect of the program
  44. 44. Plan the strategy for scaling the learning curve and the growth of the program
  45. 45. Coordinate and to take care of the team and its training
  46. 46. Develop scientific programs
  47. 47. Share costs over volume
  48. 48. Ensure clear images to the console</li></li></ul><li>The leading surgeon<br /><ul><li>Surgical proficiency
  49. 49. Creation of scientific network
  50. 50. Continuous training
  51. 51. Improve DaVinci knowledge
  52. 52. Case observations
  53. 53. Video based learning
  54. 54. selection of appropriate patients </li></li></ul><li>The operating room nursing staff<br /><ul><li>Understanding of the procedure and the surgical steps is crucial.
  55. 55. Coordinate with the PA; providing sutures, instruments and helping taking care of the camera.
  56. 56. A scarce coordination between PA and SN can cause significant delays and difficulties during the procedure.</li></li></ul><li>The surgical physician assistant<br /><ul><li>Can substitute the bedside surgeon within time.
  57. 57. Needs to have a perfect coordination with the leading surgeon and the scrub nurse
  58. 58. Complete knowledge of the anatomy and the surgical operation </li></ul> to provide adequate tractions<br /> to expose the surgical field according to the surgeon’s preferences <br /> to position vascular clips and also vascular clamps. <br /><ul><li>Train further PA
  59. 59. Train resident physician to learn how to assist at bedside. </li></li></ul><li>Surgical fellows and residents<br /><ul><li>Training programs have been recently developed for robotic surgery.
  60. 60. Adequate teaching programs allow for an effective increase of fellows’ experience with no impact on patients’ outcome (15).
  61. 61. Robotic training for residents challenge for the supervising surgeon(remote console, lack of haptic feedback).
  62. 62. crucial to provide an adequate foundation of robotic principles in trainees. </li></li></ul><li>Maintenance<br />Data collection<br />Monitoring the economic feasibility<br />Training and education<br />Growth <br />
  63. 63. Thus,<br />Building a successful robotic program means taking into account many details such as<br />economics<br />organization <br />and teaching<br />
  64. 64. Thus,<br />Keys for success <br /><ul><li>the infrastructure supporting the program
  65. 65. The coordination of team work
  66. 66. Careful review of outcomes
  67. 67. A complete and accurate strategyfrom the beginning
  68. 68. Risk-benefits analysis
  69. 69. Business plan
  70. 70. Leading surgeon</li></li></ul><li>Consumer demand<br />Drive toward wider use of robotic surgery will not come from doctors. <br />BUT, consumers increasingly are demanding the latest innovations.<br /><ul><li>Advanced technology attract young surgeons and clients competitive advantage</li></li></ul><li>Key points that have helped hospital executives evaluate the clinical and financialissues associated with implementing a robotic surgery program in this changing climate<br />
  71. 71. Acquiring the da Vinci® Surgical System <br />a strategic initiative with a three-to-five year business plan<br />Return on investment  <br />depends upon volume and complexity of surgical procedures routinely performed with robotic assistance. <br />
  72. 72. Potential Procedural Cost-Shifts<br />decreased intra-operative minutes<br />decreased hospital length of stay<br />decreased consumption of routine post-op surgical care needs, such as IVs, narcotics, blood<br />transfusions, wound care management & nursing care surveillance<br />avoidance of intra-operative conversions<br />avoidance of post-operative wound infections<br />
  73. 73. Business Development Metrics<br />New direct referrals for elective surgical procedures<br />New referrals to ancillary services in the hospital’s continuum of care pre- & post-robotic surgery, such as Radiology, Laboratory, Cancer Center, etc.<br />Market share shifts beyond customary primary & secondary service catchment<br />Shift in payer mix to a younger, insured patient population<br />Change in private payer contract terms, in particular shift from per diem to case rates<br />Change in open surgical volume to minimally invasive surgery volumes<br />Change in adverse surgical events reported by Infection Control & Quality Assurance<br />Reduction in surgical re-admission rates<br />
  74. 74. Coding Considerations<br />American Medical Association (AMA) <br />
  75. 75. Laparoscopic Radical Prostatectomy with robotic assistanceICD-9-CM Procedure Code 60.56ICD-9-CM Procedure Code 17.42<br />Total number of cases performed<br />Length of stay (range & average)<br />Age of patient (range & average)<br />Name of payer<br />Type of reimbursement (MS-DRG, Case Rate, Percent-of-Charges)<br />Amount of reimbursement for each case<br />Cost per case (not charge)<br />
  76. 76. 3-D ValueBudgeting for Change<br />Clinical: Conversion of complex open surgical procedures to minimally invasive procedures<br />Financial: Operational direct patient care efficiencies<br />Strategic: Change in business practices (new patient referrals, broader market share, shift in payer mix and contract term corrections)<br />
  77. 77. Will Robotics become commonplace?<br />depends on a number of factors<br />in the private healthcare climate it can justify its high price tag through the added business a hospital can attract using a prestigious device such as the da Vinci<br />
  78. 78. 1st factor: Hospital ‘s Investment Plan <br />However the Health Insurance Plan usually pays the same amount to the hospital for a robotic surgery as it does for the same laparoscopic procedure in many countries.<br />the difference in cost for each operation must be covered by the hospital, leaving only the largest centers with the potential for operating a system like the da Vinci<br />
  79. 79. The $4.5 million investment covers <br />the system<br />training<br />Support<br />and five years worth of “disposables,” the one-time use items which are discarded after every operation<br />
  80. 80. After five years, however, <br />the hospital must cover the disposable costs on its own, <br />which at approximately $2800, are $2000 more expensive than laparoscopic surgery per operation.<br />
  81. 81. 2nd factor of acceptance: doctors<br />A next step in surgery’s evolution, or just another gimmick ?<br />2006 poll of urology residents in Canada and the U.S. found that over half of the respondents believed that robotic surgery “looked promising but was not currently the gold standard,” with only 30% responding that “they would be performing robotic surgery after residency.”<br />
  82. 82. Increased number of systems <br />exposure of doctors to robotic surgery, and access to specialized training, it is becoming more common with over 1000 da Vinci systems in 36 countries worldwide<br />
  83. 83. Realization on a larger scale <br />depends on whether they are perceived as significant enough to warrant the sizable outlay of investment from the finite resources of the healthcare system.<br />
  84. 84. Technology of tomorrow is already here<br />but until it can be reconciled with today’s economic realities it will remain more a novelty than an effective means of improving the health of patient population on a significant scale<br />
  85. 85. Conclusion<br />robotic surgery as it exists today represents a powerful new tool in the modern surgeon’s armament<br />improving on many of the shortcomings of laparoscopy<br />with the addition of special features that can enhance a surgeon’s own natural abilities. <br />
  86. 86. THANK YOU <br />FOR YOUR ATTENTION.<br />

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