Efficiency and Productivity Gains of Robotic Surgery: the Case of the English National Health Service

This paper examines the effect of new medical technology (robotic surgery) on efficiency gains and productivity changes for surgical treatment in patients with prostate cancer from the perspective of a public health sector organization. In particular, we consider three interrelated surgical technologies within the English National Health System: robotic, laparoscopic and open radical prostatectomy. Robotic and laparoscopic techniques are minimally invasive procedures with similar clinical benefits. While the clinical benefits in adopting robotic surgery over laparoscopic intervention are unproven, it requires a high initial investment cost and carries high on-going maintenance costs. Using data from Hospital Episode Statistics for the period 2000-2018, we observe growing volumes of prostatectomies over time, mostly driven by an increase in robotic-assisted surgeries, and further analyze whether hospital providers that adopted a robot see improved measures of throughput. We then quantify changes in total factor and labor productivity arising from the use of this technology. We examine the impact of robotic adoption on efficiency gains employing a staggered difference-in-difference estimator and find evidence of a 50% reduction in length of stay (LoS), 49% decrease in post-LoS and 44% and 46% decrease in postoperative visits after 1 year and 2 years, respectively. Productivity analysis shows the growth in radical prostatectomy volume is sustained with a relatively stable number of urology surgeons. The robotic technique increases total production at the hospital level between 21% and 26%, coupled with a 29% improvement in labor productivity. These benefits lend some, but not overwhelming support for the large-scale hospital investments in such costly technology.