(Note: In the USA, at least, that’s a loaded question, as prices are obscured by hospitals* and physicians. Also, there is a lot of price discrimination (i.e. different prices charged to different patients). So, for the purposes of answering this question, think about the costs to deliver the care and not what is billed or collected.)

When thinking about the cost of medical procedures, more technologically-sophisticated procedures tend to be more expensive, largely due to equipment costs.

Consider a rotator cuff repair which can be performed either in open fashion or arthroscopically. For an open procedure, beyond the usual skin knife and sutures, the only “consumed” medical equipment is the stitch used to secure the tendon to bone (Figure 1).

By contrast, an arthroscopic procedure uses one or more disposable cannulas, an arthroscopic shaver to clear synovium for visualization and remove the remnant of the rotator cuff, and some sort of an implant (screw, anchor, etc.) to attach the sutures to the bone. The operating facility must also acquire the arthroscopy equipment and maintain it, which is a further cost that is paid, in part, by every patient who uses it.

At first glance, it seems that arthroscopy would be considerably more expensive. However, arthroscopy does have substantial benefits that ultimately can result in costs saved. An arthroscopic procedure requires less dissection and less disturbance of normal tissue, thus an arthroscopic procedure is generally less painful -- and when patients are more comfortable after a procedure, they are often able to be discharged more quickly. Accordingly, arthroscopic cuff repair is often an outpatient procedure, whereas (historically) patients with an open repair required at least one overnight stay in the hospital. Longer lengths of stay generate expenses far exceeding the cost of disposable equipment used in an arthroscopy procedure.

Pain is another important aspect to consider. Arthroscopy is likely to be less painful than open surgery, and if arthroscopy is less painful, patients may choose it more frequently. As such, technological advances that make rotator cuff repair less painful may lead to more expenses over all -- even if each individual procedure is less expensive than the corresponding open procedure it supplanted.

This highlights an important paradox: improvements in healthcare delivery might save money per unit of work, but will add to total expenses by augmenting the amount of work done overall.

Additional Points to Consider

Because arthroscopy is likely to be less painful than open surgery, patients undergoing arthroscopic repair may return to work faster. The resulting increased productivity may contribute to the overall cost-effectiveness of the procedure, though the accounting is complicated: in many instances, the entity paying for healthcare is not the entity that benefits from a more rapid return to work.

* This study, https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/1783043, reported that hospitals would more often share the price of parking outside their facility than the price of an EKG within it.