Opportunity cost in the evaluation of surgical innovations: a case study of laparoscopic versus open colectomy

Abstract

Background: Opportunity cost is the value of an activity forgone for participation in some other activity. With respect to surgery, an innovation incurs an opportunity cost when it uses additional operating time that could otherwise be used in a productive way. This report describes an example of assessing opportunity cost in the transition from open to laparoscopic colectomy using pooled analysis data from the surgical literature and hospital financial data.

Methods: A MEDLINE literature search was performed between the years 1998 and 2008. Data were pooled from the identified studies used for the statistical analysis of cost and operating room time differences between laparoscopic versus open colectomy. The analysis identified five commonly performed, elective general surgery procedures. The profit margins of these procedures then were determined and divided by their average surgical time to calculate a range of opportunity cost multipliers. Finally, these opportunity cost multipliers were applied to the additional time required for performance of laparoscopic colectomy to demonstrate that procedure's true overall cost.

Results: Seven comparative studies were identified. The pooled analysis showed that the operating time was longer for a laparoscopic colectomy by 27.08 min (p < 0.0001). Additionally, laparoscopic colectomies had slightly higher total costs ($104.67 difference), but this difference was not statistically significant (p = 0.28). The five commonly performed, elective procedures chosen were laparoscopic cholecystectomy, laparoscopic inguinal hernia repair, breast biopsy, partial mastectomy, and total thyroidectomy, and their opportunity cost multipliers ranged from $9 to $26 per minute. Depending on the opportunity cost multiplier used, the opportunity cost of an additional 27.08 min required to perform laparoscopic colectomy ranges from $243.72 to $704.08, which is approximately two to six times greater than the point estimate of the difference in total costs based on published studies.

Conclusions: Although frequently overlooked, opportunity cost is a potentially very important element in assessing the true costs of surgical innovation.