Lots of Surgical Benefits! Just Not for the Thyroid

By Robert Zimmerman - September 6, 2012 | Tickers: ISRG, MAKO | 0 Comments

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Fellow Fool blogger Danny Vena posted a piece extolling the virtues of robotic surgery of the thyroid and, by extension, the companies of Intuitive Surgical (NASDAQ: ISRG) and Mako Surgical (NASDAQ: MAKO).  His premise was simple:  Patients having their thyroids removed by traditional surgery are left with a gruesome surgical scar.  Having your thyroid removed by robotic surgery doesn't.  Patients will pay $3,100 more for robotic surgery to avoid a gruesome surgical scar.  Ergo, there's more growth opportunity for Intuitive courtesy of thyroid surgery.  MAKO makes robotics for total knee replacement surgery and Dan likes the prospects for this firm, too.

The fact is, a month after surgery, thyroid surgical scars usually look like this:

I doubt many patients will pay $3,100 to avoid this sort of scar.

Photo from The Fun Times Guide.com http://health.thefuntimesguide.com/2009/02/thyroid_surgery_recovery.php

However, I love robotic surgery.  Part of my job as a doctor is overseeing the hospital blood bank.  Before the Intuitive's Da Vinci robot, a man having his prostate removed routinely needed a transfusion of four to six units of blood.  With most robotic prostatectomies, he doesn't need a drop.  Four units of blood times roughly 88,000 prostectomies a year means potentially more than 350,000 units of blood are not transfused each year.  I like it.  Coronary artery bypass surgery has also benefited from robotic technology.  With a robot, a surgeon performs the bypass surgery with the heart still beating.  No big skin incisions down the chest, no cutting open the sternum (aka breastbone) and no heart-lung bypass - a huge advantage for the patient.  Did I mention a shorter hospital stay?

 Lastly, treating small cancers of the mouth and throat has become less painful for the patient.  In the old days, a surgeon had to cut the very front of the jaw in half, extend the surgical incision along the lower edge of the jaw almost to the neck, peel back the jaw bone and cut through muscle and tissue of the neck to expose cancer at the base of the tongue or the floor of the mouth.  After removing the cancer, the surgeon had to re-assemble all that.  With a Da Vinci, removing small cancers in the mouth and throat is little more than a glorified tonsillectomy.  

The downside to robotic surgery is that it takes some practice before the surgeon gets the hang of it.  The robot removes the sense of touch and operating without it takes some getting used to.  If you're considering such surgery, make sure to ask very specific and direct questions about how often the surgeon has performed surgery with a robot.  Also, ask about how many robotic procedures are performed at the hospital.  In my opinion, one or two procedures a week is good for a surgeon and the hospital should average at least one a day.  If ever practice makes perfect, this would be the case.  It may sound callous, but you want to go to a hospital where this sort of surgery is a mundane routine.  Bear in mind also, you may not be a candidate for robotic surgery.  There are size limitations when it comes to prostate and head and neck cancer surgery with a robot.  

So are Intuitive and Mako worth your hard earned money?  ISRG has come off its 52 week highs by 17% and has beaten consensus earnings estimates for five straight quarters.  It also is sitting on a pile of cash.  While it may not have a run like it did in the early 2000's, given growing applications and interest in the technology, not to mention the prevalence of heart disease in the US, I would look hard at this stock if it goes to around $410-425 -ish.  I have spoken to a couple of surgeons who use DaVinci and they were very upbeat on its potential.  I have watched surgery performed with this technology and it is impressive.  Watch this video to see what I mean (don't worry, no blood) https://www.youtube.com/watch?v=Kq-_riKtzsY.  MAKO is losing money and there are no estimates of profits for the upcoming year.  While its products might be good, I am biased towards ISRG if only because of its profitability and my admittedly second hand experiences with it.  I'll wait on MAKO for now.

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