In House Cost Consideration for 3D Printing for Surgical Applications Part 1

Hui Jenny Chen, MD and Michelle Gabriel, MS, MBA

(This blog is adapted from our A Roadmap from Idea to Implementation: 3D Printing for Pre-Surgical Application: Operational Management for 3D Printing in Surgery)

Capital costs are one-time, fixed set-up costs incurred on the purchase of equipment or construction after which there will be only recurring operational or running costs. Operational costs include fixed costs, which recur every year, and variable costs, which are volume dependent. All of these costs must be examined when reviewing a proposal for creating an in-house 3D printing facility.

Accumulation of high-quality data on costs is difficult since without a CPT code there are multiple reimbursement pathways and no reliable, repeatable process to collect costs. For example, sometimes, the cost can be bundled in an outsourced pre-surgical process by medical device companies, with a significantly elevated price tag. (Figure 1) However, more often, researchers, providers, surgical centers, and some industrial partners have to absorb the costs of creating the 3D print. Methods to collect and document costs for every case should be employed, as each case can be considered a potential data point in a future larger scale (and possibly multicenter) clinical trial.

3D printing healthcare

Capital Costs

The cost of providing 3D printing service can range from a few hundred dollars to millions, depending on the goal of the medical/surgical center in providing such service. Modest setups for simple models for patient education could have a capital expenditure under $10,000. On the high end of the spectrum, the authors have seen a proposal for a Veterans Association facility requesting $1 million for a fully equipped in-house 3D printing service with high-capacity printers and software. This facility would be performing in-house prosthesis work with significant cost savings that would offset this high initial cost.

Although it may be simple for a hobbyist to set up a printing machine at home, in a medical facility there are many factors to consider. Utilization of this technology is relatively new. Thus, there are many potential environmental, regulatory, and legal issues yet to be properly addressed. For example, certain steps of the 3D printing process may potentially involve or create hazardous materials or work environments. Thus, upgrading facilities to handle power requirements, and ventilation and chemical handling for post-processing operations may cause a significant increase in capital funds required.

Capital costs include the hardware, software, and built out facilities. For a frame of reference, some sample costs to be included in a proposal for capital funding are provided:

3D printer

● Imaging software

● Segmentation software

● CAD/CAM software

● Standard computer for administrative functions

● High powered computational computers

● High resolution monitors

● Fume hood/Ventilation setup

Funding is required to pay for these capital costs. Most academic hospitals can allocate existing research grants to create 3D printing service without expecting any near-term return.

Fixed Costs

Fixed costs remain constant within a range of activities but vary per unit. For example, a technician’s salary is fixed for the year. If there were two technicians, the salary fixed cost would double. The salary is not changed if the facility makes 100 or 1000 3D models.

Fixed costs to maintain a 3D printing facility include personnel salaries, equipment maintenance contracts, facility costs, training costs, cost of material, and the labor involved in creating a final clinical acceptable print.

Ongoing costs of maintaining a 3D printing facility include personnel salaries, equipment maintenance contracts, facility costs, training costs, cost of material, and the labor involved in creating a final clinical acceptable print.

The following are sample fixed costs:

● Technician and Engineer salaries

● Equipment maintenance and vendor service agreements

● Training

● High bandwidth network for file transfer

Variable Costs

Variable costs change in direct proportion to volume.

For 3D printing, the materials are variable costs. The choice of material is huge, and the costs vary widely also. The amount of material used will also vary with each application.

If specific clinician time is charged to a project, that expense can be considered to be variable. If hourly labor was used to make the print vs. a salaried technician, it would be considered a variable cost.

In the next post, we will reveal our initial attempt in generating a financial spreadsheet that will help our audience with their own financial planning for a 3D printing service.

To be continued: