Value Analysis of Methods of Inguinal Hernia Repair

Objective: Value is defined as health outcomes important to patients relative to cost of achieving those outcomes: Value = Quality/Cost. For inguinal hernia repair, Level 1 evidence shows no differences in long-term functional status or recurrence rates when comparing surgical approaches. Differences in value reside within differences in cost. The aim of this study is to compare the value of different surgical approaches to inguinal hernia repair: Open (Open-IH), Laparoscopic (Lap-IH), and Robotic (R-TAPP). Methods: Variable and fixed hospital costs were compared among consecutive Open-IH, Lap-IH, and R-TAPP repairs (100 each) performed in a university hospital. Variable costs (VC) including direct materials, labor, and variable overhead ($/min operating room [OR] time) were evaluated using Value Driven Outcomes, an internal activity-based costing methodology. Variable and fixed costs were allocated using full absorption costing to evaluate the impact of surgical approach on value. As cost data is proprietary, differences in cost were normalized to Open-IH cost. Results: Compared to Open-IH, VC for Lap-IH were 1.02X higher (including a 0.81X reduction in cost for operating room [OR] time). For R-TAPP, VC were 2.11X higher (including 1.36X increased costs for OR time). With allocation of fixed cost, a Lap-IH was 1.03X more costly, whereas R-TAPP was 3.18X more costly than Open-IH. Using equivalent recurrence as the quality metric in the value equation, Lap-IH decreases value by 3% and R-TAPP by 69% compared to Open-IH. Conclusions: Use of higher cost technology to repair inguinal hernias reduces value. Incremental health benefits must be realized to justify increased costs. We expect payors and patients will incorporate value into payment decisions.