The effect of the approach to radical prostatectomy on the profitability of hospitals and surgeons

OBJECTIVE To evaluate the profit margins for radical retropubic prostatectomy (RRP), laparoscopic radical prostatectomy (LRP) and robot-assisted laparoscopic prostatectomy (RALP), and the effect on the reimbursement to the urologist, as there has been a dramatic increase in use of RALP, with the cost of the robot borne by hospitals. METHODS Data on costs and payments to hospital and surgeon from 2003 to 2008 for RRP, LRP and RALP were obtained from the hospital and urology department. We determined the profit based on the difference between payments received and total cost. RESULTS Between 2000 and 2008, 1279 RPs were performed at our private hospital. The introduction of RALP increased total number of RPs and replaced most RRPs. RRP represents the only procedure where payments exceed total costs. For RRP there was a significantly higher profit for patients with comorbidities. The type of payer had a large effect on profit. Medicare provides a small profit for RRP but a significant loss of > US$4000 for RALP. While all insurance companies resulted in losses for LRP and RALP, there was variability of almost $600/case for LRP and >$1400/case for RALP. RALP provided the highest reimbursement for the surgeon due to additional reimbursement for the S2900 code (use of robot). CONCLUSIONS The introduction of RALP has increased the case volume at our hospital and improved profits for the surgeon. The hospital loses money on each LRP and RALP case compared with RRP, which provides a small profit.