Tiny Pullman Regional Hospital netted just over $1 million a year. So why did the hospital buy the $2 million da Vinci robot?
Tiny little Pullman Regional Hospital, deep in the Palouse, has 25 beds and a CEO who often answers his own phone.
In 2010, after expenses, the hospital netted just over $1 million. Late last year, it bought a da Vinci Surgical Robot costing twice that much, an event greeted with much local fanfare and hospital advertising.
Why a small hospital would make such a big purchase could be a Harvard Business School case study in health-care economics.
Here’s how it started: One of two urologists the hospital depends on to do prostate-cancer and other types of urology surgery announced he was leaving town.
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But when the hospital tried to sign up a young doctor with ties to the area, he asked if they had “robotic capabilities.” He said he’d trained to do robotic surgery, and would only practice where he could continue doing that.
“That’s when the light bulb went on,” said Scott Adams, Pullman Regional’s CEO. “We could limp along in urology, and have older physicians continue to practice a reasonable scope of urology in our community, but eventually we would become irrelevant, because without this new technology, no new urologist will want to practice here.”
But Spokane is only 75 miles away. Why not just send patients there?
About $2 million a year, that’s why. That’s how much one busy urologist brings to a hospital, Adams said.
So at the end of last year, Adams presented the case to the board of the hospital district, which is partly supported by taxes. He showed videos. He said the da Vinci would lower patient risks and shorten hospital stays. He told them a robot was critical to attracting urologists and gynecologists, and how young doctors expect the new technology.
As he explained later: “Obsolescence in the hospital business means it’s not too far a leap to be out of business.”
The board vote was unanimous.
The hospital financed the robot on a lease arrangement, with payments around $450,000 per year.
This year, through the end of May, surgeons have done 60 robotic procedures — 41 gynecologic, mostly hysterectomies; 11 urology cases and eight general-surgery cases, mostly gallbladder surgeries.
The hospital’s plan is to do 120 procedures this year, and they’re on track, Adams says. The busiest surgeon, a gynecologist, has done more than 20, well along the road to No. 25, where Adams says the steep learning curve on the robot begins to flatten out.
“Why travel for surgery?” the hospital’s website says, advertising the robot.
“It’s going to take a while for people to understand that we have this capability and for our surgeons to get enough experience for people to say, ‘Yeah, they know what they’re doing and they can do a good job for you,’ “Adams said.
“We’re betting that our business plan will actually pan out.”
Carol M. Ostrom: 206-464-2249 or firstname.lastname@example.org. On Twitter @costrom.