Founded in 1995, Intuitive Surgical is the industry leader in robotic surgical systems that allow doctors to perform surgeries with the assistance of robotic technology.
Based on research that began in the late 1980s, the founders of Intuitive Surgical, armed with a war chest of VC funding began working on a prototype system code named “Lenny”. It took 5 years, but the device, now known as the da Vinci Surgical System, was approved by the FDA in 2000. The company went public that same year.
The potential for such a device was enormous, doctors would now be able to perform surgeries more accurately after being trained on the da Vinci system. Advocates envisioned a world where patients in remote areas would no longer have to travel for surgery, doctors would be able to dramatically improve the utilization of their skills by performing more surgeries across the globe, leading to an overall increase in the quality of healthcare globally. This generated a lot of buzz in the medical community and among investors. Those bet on the success of Intuitive Surgical would not be disappointed. The company now has a market capitalization just under $27B, with $2.4B in revenue generated in 2015.
Although the da Vinci system did not focus on allowing surgeries to be performed remotely, it did not take long for experts to test whether it was possible. Operation Lindbergh, named after Charles Lindbergh’s first ever transatlantic flight is widely regarded as the first true remote surgery. Conducted by a doctor in New York on a patient in Paris in 2001, this operation symbolized a new era of possibilities the medical world.
Although the introduction of the da Vinci system and robotic surgery has been successful with sales growth increasing steadily since it’s launch, it did not come without its fair share of criticism.
“This is a technology that is costing the healthcare system hundreds of millions of dollars and has been marketed as a miracle — and it’s not.. It’s a fancier way of doing what we’ve always been able to do.”
Dr. John Santa, medical director at Consumer Reports Health.
“There’s a widespread belief that newer is better but our findings question that. People need to stop and critically analyze whether using this expensive technology will really add any benefit for patients,”
Jason D. Wright, chief of gynecologic oncology at Columbia
“So far, robotics has not lived up to the hype for benign gynecologic procedures.”
Barbara S. Levy, American College of Obstetricians and Gynecologists (ACOG) Vice President for Health Policy
In order to fully leverage the potential of their device, they will need to pivot their business model towards adding value in other ways. Improvements to digital technology and the wide proliferation of digital access present many opportunities for Intuitive Surgical.
- Development of more sophisticated digital technology, coupled with improvements in manufacturing will present an opportunity to drive down costs of the da Vinci system and access a wider market. A da Vinci system currently costs roughly $2 million dollars per unit in addition to maintenance and operating costs. This is prohibitive for many hospitals around the world which would benefit greatly from the device.
- Leveraging improving data transfer technologies will enable remote procedures to be conducted more effectively. This is the logical next step once protocols and procedures are developed to manage the process of conducting routine surgeries remotely.
- Training on the da Vinci system presents a unique opportunity to bring doctors together from around the world and develop a body of intelligence that would serve as a catalyst for improvements of surgical procedures worldwide. With all the data collected from thousands of procedures worldwide, Intuitive Surgical is uniquely positioned to take a leading role in the advancement of the field.
- Artificial intelligence married with robotic surgical devices presents a unique opportunity to eventually be able to perform procedures without the interference of a doctor. This will undoubtedly take significant time to develop, however it is not a stretch to see simple procedures being conducted by AI equipped da Vinci systems in the near future.
Overall I believe that robotic and remote healthcare represent an exciting frontier that will continue to generate greater benefits in the future. The key will be for robotic technologies to find more ways to add value to their customers by leveraging digital technologies rather than continue to deliver an expensive tool that mimics traditional surgeries.