Value

Proposition Simulation: Surgical Robotics

Foreground Reading

Surgery’s Beginning
In 1495, Leonardo da Vinci designed the first ever automated humanoid, or robot. It was a mechanical
knight operated with pulleys and cables that could stand, sit, raise its visor, and independently maneuver
its arms. During the time of da Vinci, surgery was woefully distant from his robotic dreams. In fact, the
surgeon was not a doctor, but more often a traveling barber with scant knowledge of anatomy who
performed dramatic, bloody, and often deadly interventions. At the time, the most common surgery was
the lithotomy, or removal of bladder stones. Some of the first specialized surgical instruments ever
developed were designed to facilitate lithotomies, including dilators, forceps, and tweezers.

Surgery became much more tolerable after 1847 with the development of the Morton ether inhaler,
which delivered anesthesia. However, surgical mortality was still common until the late 1800s, when
doctors discovered that sterilizing instruments could decrease infection rates and enable survival.1 Until
the 1980s, most surgeries still used open technique, that is, surgeons made large incisions to visualize and
access the surgical field.

Laparoscopy
Laparoscopy, also called minimally invasive surgery, was first developed in the 1980s and widely
adopted across a variety of surgical specialties during the first decade of the 2000s. Laparoscopic surgery
involves much smaller incisions than open surgery thanks to the use of a laparoscope, which is a long
fiber optical system that contains a camera and a light source to visualize the surgical field.2 In a
laparoscopic procedure, the abdomen of the patient is inflated with a carbon dioxide gas to enable access
and visualization, and surgical instruments are inserted in the body through a series of small incisions.

The most common laparoscopic procedure is the cholecystectomy, or removal of the gallbladder. In
this procedure, the surgeon first makes an incision in the belly button to inflate the abdominal cavity and
then makes three more incisions as small as 5 mm with the help of an instrument called a trocar. The

This text was written by Marta Dapena-Baron for Value Proposition Simulation: Surgical Robotics (HPB No. 8720) for the sole purpose of aiding
classroom instructors in the use of the simulation. This text and the simulation are developed solely as a basis for class discussion and are not
intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management.
Copyright © 2018 Harvard Business School Publishing. No part of this publication may be reproduced, stored in a retrieval system, used in a
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permission of Harvard Business Publishing.
Harvard Business Publishing is an affiliate of Harvard Business School.
trocar is a hollow cylinder with a tip blade that is used to introduce the laparoscope and other surgical
instruments to perform surgery. The camera in the laparoscope illuminates the surgical field and sends a
two-dimensional magnified image from inside the body to a video monitor, giving the surgeon a close up
view of the tissue and organs. The surgeon watches the monitor and performs the operation by
manipulating the surgical instruments through the operating ports. In contrast to this minimally invasive
technique, in an open cholecystectomy procedure, incisions are often 20 cm long, making the procedure
much more invasive and requiring a much longer hospital stay and recovery time. Today, there are over
one million cholecystectomies performed in the United States per year, and more than 90% of them are
done laparoscopically.3

Downsides to Laparoscopy
Laparoscopic surgery is clearly beneficial from a procedural outcomes perspective, offering smaller
incisions, less blood loss, less pain, lowered risk of infection, and much faster recovery for the patient.
However, laparoscopy presents a steep learning curve for a surgeon if they have only been trained in
open techniques. The need for retraining has slowed the transition towards minimally invasive surgery,
as surgeons who have been practicing the longest may resist the transition.

Unlike in open surgery, in laparoscopy, a surgeon must operate using very long instruments that
move in counter-intuitive ways. Hand-eye coordination is compromised: The surgeon is simultaneously
watching a two-dimensional image of the surgical field while manipulating instruments. The instruments
have restricted degrees of motion, and wrist movements are also constrained as instruments fit
awkwardly through the trocar. In addition, tactile feedback is inferior to that of open surgery, as the
surgeon must try to feel tissue through long instruments.4

Finally, minimally invasive surgery is not always possible. In cases involving narrow cavities that
make access difficult and complex, or in traumatic conditions, the open technique is still preferred.
Accordingly, laparoscopic adoption is inconsistent across specialties, procedure types, and settings.
Today, laparoscopic penetration is lowest in fields such as urology, where surgery happens in a
constrained environment making laparoscopic access most challenging, and highest in procedures with
better access and where complications from open surgery are life threatening, such as bariatrics.

The Advent of Surgical Robotics

Robotics surgical engineering and telepresence technology developed in the 1980s made robotic surgery
possible in the 1990s. Specifically, in the 1980s the US government funded the development of tele
surgery tools with a goal of decreasing battlefield mortality. The goal of telepresence in surgery was
initially to enable a surgeon to operate remotely on a wounded soldier. Surgical robotics technology was
later commercialized as several of the surgeons and engineers who worked on the US Army telepresence
project moved to for-profit ventures. For example, a robotic arm loaded with an endoscopic camera that
can be controlled by surgeon voice commands was cleared by the FDA in 1994, and soon afterwards a
privately funded company, called Lamarr, Inc., licensed it. They aggregated and redesigned additional
technologies to create the first commercial surgical robot in 2001, the Lamarr Robotics System. Since then,
Lamarr has placed over 5,000 robotics systems used to perform almost one million surgeries.5

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Robotics Adoption Across Specialties
Robotics procedures have grown dramatically since the early 2000s, but until now, robotics surgery has
been mostly limited to urology and gynecology. One particular urologic procedure, the prostatectomy or
removal of the male prostate gland, is the perfect case for robotics. Operating in the male pelvis is
challenging due to the narrow anatomy in that part of the body, and when the Lamarr robot launched in
the early 2000s, most prostatectomies were still being done as open procedures. The Lamarr robot enables
access and improves visualization and surgical precision in the pelvis.6 Additionally, surgeons report that
operating with the assistance of a robotic arm is much less physically demanding. In gynecology, robotics
has enabled minimally invasive oncology and complex hysterectomy cases for which laparoscopy was
difficult and time consuming. Patients often believe robotics to be superior and are undoubtedly
influenced by direct marketing efforts.7 In cardiothoracic surgery, robotics is increasing in use for the
exposure of arteries in cardiac bypass procedures.

There are approximately five million surgeries done in the United States today, and more than 3.5
million of those are general surgery procedures. In contrast to the dramatic rate of growth of robotics, the
general surgery category overall in the United States has grown by less than 2% annually over the same
time period, essentially keeping up with demography. The next phase of surgical robotics will require
solutions for general surgery procedures—such as bariatrics—that have not yet been penetrated, due to
lack of good instrumentation: surgeons often need to insert ports in multiple parts of the body
simultaneously, and today’s robot is large and very difficult to move and reposition.8 Routine procedures
like cholecystectomies are primarily done laparoscopically because the robot has been considered too
expensive and cumbersome.9 Additionally, some surgeons report that current robotic technology causes a
loss of tactile feedback, posing safety and invasiveness issues relative to laparoscopy.

Surgical Category Benefits

Benefit Definition

Procedure Price An all-in, per-procedure cost that includes the amortized price of capital
equipment, the price of disposable instruments, the allocated price of reusable
instruments, a service contract allocation, and the cost of maintenance.
Procedure price excludes the labor costs of operating equipment.
Invasiveness The extent to which incisions of some size are typical within a procedure, and
the degree to which adjacent tissue is disturbed.
Precision The surgeon’s degree of control over equipment, enabling a surgeon’s goals to
be carried out as intended. The use of technology that helps eliminate the
potential for trembling or unintended user error, for example, increases
surgical precision.
OR Flexibility The ease with which equipment can be moved—either repositioned within an
operating room (OR) to enable maximum procedural flexibility and surgical
field access, or moved between ORs to maximize equipment utilization.
Procedural Breadth The number of procedure types that a single set of instruments can handle.
Procedural breadth is key to bringing robotic surgery into general surgery.
Learning Curve The training effort and time required for staff to achieve optimal outcomes
using a particular technology, surgical process, or technique. Open surgery

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 requires the fewest number of procedures to master (fewer than 15), while
laparoscopy and robotics are harder to learn, with 20 and 50 practice
procedures respectively. Both hospital administrators and surgeons are
attracted to technological solutions that are easy to learn.
Patient Appeal How attractive a technology is to patients from a marketing perspective.
Patient appeal is a proxy for the degree of patient demand that a particular
technology can stimulate.
Surgeon Surgeon position and comfort, including equipment ergonomics, the ability to
Ergonomics use instruments that enable 360-degree wrist movements, etc.

The Surgical Robotics Competitors

Lamarr, Inc.
Lamarr, Inc., is an established brand in robotics, well-known among hospital stakeholders, surgeons, and
administrators. With over 5,000 robotics units in commercial use already, Lamarr is the only robotics
brand commonly known among patients, particularly those undergoing routine urology or gynecological
procedures. Last year, for example, Lamarr celebrated its prostate cancer achievements through a
massive social media campaign.

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 From a strategic capability perspective, the Lamarr team is balanced between clinicians and marketers.
Its commercial approach was initially focused on surgeons, designing technology that increased surgeon
comfort and productivity. It worked: Open surgeons commonly identify Lamarr as their top-of-mind
robotics company. However, some hospital administrators have grown weary of the company’s
reputation for aggressive sales and advertising tactics, as well as its high pricing—they are starting to
question the advantage of robotics over laparoscopic surgery.

Lamarr derives a diverse revenue base from selling its robotic system, surgical devices adapted to
robotics, and service contracts required to maintain the system in good working condition. On a per-
procedure basis, Lamarr pricing is approximately 50% higher than the cost of open surgery.

Ada Robotics, brought to you by Trust Surgical Corporation

Trust Surgical CEO Scott Martin has publicly stated that by launching Ada Robotics, he is fulfilling his
life-long dream of democratizing robotic surgery. He believes that Ada will enable all patients to obtain
the types of outcomes that, until now, were only available to patients seeing the most advanced surgeons
at top institutions. According to Martin, current robotics solutions simply augment a surgeon’s technique
by enabling open surgeons to achieve the dexterity and precision of leading laparoscopic surgeons.
However, a true robotic solution should dramatically improve outcomes over simple laparoscopy.

Ada Robotics leadership states that by launch, Ada will use advanced data sharing and analysis
capabilities, integrating patient information from medical records and pre-operative processes to develop
highly detailed mapping of a patient’s anatomy and disease state. The Ada robot will not simply
augment but rather catapult human capabilities. The robot should be capable of autonomous decisions,
providing real-time guidance as to where exactly to direct instrumentation.

Ada leadership has made statements about the company’s intellectual advantage, saying they have the
smartest team in the world working on a robot that integrates the entire medical discipline to enable a
systems approach to surgery. Unfortunately, technology does not always come in small packages.
Unauthorized sources have leaked that Ada is struggling to develop an operationally flexible machine.

Telkes Medical, brought to you by Health Corporation

Health Corporation, Telkes’ parent company, is known as the company with the most comprehensive
laparoscopy and surgical supply portfolio in the world. Health Corp is focused on adapting its world-
renown flexible scopes, access instruments, and precise energy devices to the robotics environment. The
goal is to deliver the benefits of laparoscopy with the stress-free benefits of robotics to surgeons.

A recent press article said that Health Corp is in the minimally invasive surgery business; to the
company, robotics represents a natural evolution in its business rather than a new category altogether.
Last year, Health Corp purchased a small startup—Telkes Medical—that specializes in instrument
integration and was developing a robotic system that operates independent robotic arms that can be
easily repositioned around the patient or across rooms. Telkes boasts great instrumentation to enable
what many think will be a clinically differentiated experience for the patient once they wake up. The
question on everyone’s mind now is how quickly the acquisition will enable the launch of a fully
integrated robotics system.

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 Telkes has been quieter about its plans than other robotics ventures, and some in the industry believe
this is due to Health Corp’s intent to eventually run robotics from its minimally invasive business unit,
rather than in a separate startup–like environment. Of course, Health Corp’s medical device sales reps
might not be versed in the sale of advanced capital equipment, but they do have relationships with
thousands of surgeons and administrators across the country.

MediBot Labs
“A sports car trapped in a pick-up truck body,” is how one surgeon recently described the surgical robot
manufactured by MediBot Labs. The IP used by this startup comes from the work of Dr. Eco, a famous
surgeon in Italy who trained as a bio-technology engineer prior to medical school.

The MediBot occupies a significant footprint in the OR, and those who have tried the MediBot report
that it is intuitive and comfortable. The is consistent with Dr. Eco’s design philosophy, “an extension of
laparoscopy.” The MediBot team is made up of highly skilled surgeons in addition to very capable
engineers and industrial designers. MediBot is far along in its FDA approval process, and has already
commercialized a few units in Europe. As it enters the US market, the company has already announced
its intention to price at a slight premium over open surgery, and to deploy a per-procedure billing
method that is reimbursement-friendly.

Speed of adoption is critical for this company, by far the least deep-pocketed of the competitors.
MediBot will need to aggressively place units and hope that its intuitive design will create stickiness with
early adopters of its technology. A recent trade journal article suggests that the key to MediBot’s success
will be finding a group of surgeons who see the benefits in switching from open surgery to robotics, but
have been waiting until the switch could be done with minimal training.

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 Endnotes
1 Catherine Mohr, “Surgery’s Past, Present and Robotic Future”, speech given at TED Conference, Long Beach Performing Arts
Center, Long Beach, California, February 5, 2009,
https://www.ted.com/talks/catherine_mohr_surgery_s_past_present_and_robotic_future, accessed April 12, 2018.

2 Robotic Oncology, “History and the Future of Robotic Surgery,” http://www.roboticoncology.com/history-of-robotic-surgery/,

accessed April 12, 2018.

3 N. G. Csikesz, et al, “Surgeon Volume Metrics in Laparoscopic Cholecystectomy”, Digestive Diseases and Sciences 55 (August 2010):
2398–405, https://www.ncbi.nlm.nih.gov/pubmed?term=19911275, accessed April 13, 2018.

4 Catherine Mohr, “Surgery’s Past, Present and Robotic Future”, speech given at TED Conference, Long Beach Performing Arts
Center, Long Beach, California, February 5, 2009,
https://www.ted.com/talks/catherine_mohr_surgery_s_past_present_and_robotic_future, accessed April 12, 2018.

5 Anthony R. Lanfranco, Andrew E. Castellanos, Jaydey P. Desai, and William C. Meyers, “Robotic Surgery A Current Perspective”,
Annals of Surgery 239 (January 2004): 14–21, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1356187/, accessed April 13,
2018.

6 Cameron Scott, “Is da Vinci Robotic Surgery a Revolution or a Rip-off?”, Healthline, August 10, 2016,
https://www.healthline.com/health-news/is-da-vinci-robotic-surgery-revolution-or-ripoff-021215#4, accessed April 12, 2018.

7 Cameron Scott, “Is da Vinci Robotic Surgery a Revolution or a Rip-off?”, Healthline, August 10, 2016,
https://www.healthline.com/health-news/is-da-vinci-robotic-surgery-revolution-or-ripoff-021215#6, accessed April 12, 2018.

8 Cameron Scott, “Is da Vinci Robotic Surgery a Revolution or a Rip-off?”, Healthline, August 10, 2016,
https://www.healthline.com/health-news/is-da-vinci-robotic-surgery-revolution-or-ripoff-021215#3, accessed April 12, 2018.

9 Catherine Mohr, “Surgery’s Past, Present and Robotic Future”, speech given at TED Conference, Long Beach Performing Arts
Center, Long Beach, California, February 5, 2009,
https://www.ted.com/talks/catherine_mohr_surgery_s_past_present_and_robotic_future, accessed April 12, 2018.

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