New medical advances and devices and cost; is the real problem insurance and a willingness by a public anxious for cures to be overcharged?
There are many medical technologies that are expensive by design. The newest, latest and greatest device for helping those with life threatening conditions such diabetes come with huge costs for small devices that likely have unbelievable markups. In a real marketplace, that is uncontrolled such as the American healthcare marketplace, overpriced technologies would soon need to lower their cost to compete and be purchased by a public who wants better healthcare technologies to improve the quality of their lives.
For way too many years, the public wants what is new, and is willing to embrace the price of the technology according to what they can afford. In a true marketplace, these companies would sell very few products with their outrageously priced supplies until the price hit a certain affordable price point. Insurance unfortunately, makes devices like this more affordable so these companies sell many more devices because of the insurance company supplementing the price, eliminating the effect of a true marketplace. What is even worse, is that the public does not understand the true costs of the device in many cases, as they often just pay a deductible and monthly fees for the supplies to run the device. Since this artificial market place has forced prices to artificially high levels enhanced by guarantees from people other than the consumer, the public eventually gets used to the high costs and even may consider it normal.
What are the real costs and why doesn’t a true price negotiation exist. Most of these companies develop these devices for their financial benefit, rather than your health benefit, and then price them often thousands of times more than it costs to make the supplies as well as the devices themselves. While the technology is great, the effect of a monopoly is clear; high prices unrelated to the true cost of what the device costs.
This is quite different than perhaps some other new technologies such as OLED televisions which when initially offered to the public a year ago, were priced over 10,000 for a 55 inch television. Of course, they sold very few of them and the price was quickly reduced to under $5000 as production slowly increased and it was clear that the public was unwilling to spend their own money when other options that were almost as good existed for far less.
On the other hand, with medical advances, some have little or no benefit long term but the prices are insane. They spin it saying the cost of development is high which it is, but on the other hand, in the USA, Medicare has no drug negotiating power courtesy of the congress as they pushed through a job that benefitted big pharma rather than the public who were paying dearly for drugs they believed they need.
Medical devices are not dissimilar. Many people in the device makers supply chain make huge profits from our fears and desires (Stephen Brill made this clear on his article earlier this year) and the public is getting the financial shaft. Do we control prices by laws which is rarely a good idea unless implemented well (cost of production x a stated allowable profit margin) or perhaps, would a single payer system help if only one insurer could set its own rules which can help keep those costs in check (medicare for all for example could set its own formula for reimbursement and would hold the keys to companies like these getting paid as they do now with their rbrvs system).
Perhaps a better way would be to eliminate insurance reimbursement altogether for new technologies and make it so the technologies themselves would fly or die based on affordability alone, something an economist would love.
On the other hand, insurance is actually a price stimulus as affordability may actually be $1500, but the insurance pays an additional $5500 for example. This is not dissimilar to the way housing prices escalate as we keep interest rates lower. Affordability prevails. Perhaps, insurance in many ways is the problem, not what is covered since large insurers even under Obamacare have failed to negotiate in good faith to bring the cost of new technologies into the realm of true affordability.
Perhaps, true capitalism can keep these new technologies in check price wise better than any insurance could ever do.
Read about it here
Even Small Medical Advances Can Mean Big Jumps in Bills
MEMPHIS — Catherine Hayley is saving up for an important purchase: an updated version of the tiny digital pump at her waist that delivers lifesaving insulin under her skin.
Such devices, which tailor insulin dosing more precisely to the body’s needs, have transformed the lives of people with Type 1 diabetes like Ms. Hayley. But as diabetics live longer, healthier lives and worries fade about dreaded complications like heart attacks, kidney failure, amputations and blindness, they have been replaced by another preoccupation: soaring treatment costs.
“It looks like a beeper,” said Ms. Hayley, a 36-year-old manager here for an environmental services company, referring to the vintage 2007 pump on the waistband of her jeans. “It’s made of plastic and runs on triple-A batteries, but it’s the most expensive thing I own, aside from my house.”
A new model, along with related treatment supplies, prices out at tens of thousands of dollars for this year and will cost her about $5,000, even with top-notch insurance. “It’s great,” Ms. Hayley said, “but it all adds up.”
Everyone should have the ability to have access to great technologies that help people with chronic problems such as diabetes, however, is it ethical to gouge the public? Perhaps, this is just another reason we need to simplify our healthcare system and go single payer.
What do you think? As always, I value your opinion.