Medical Magic Machines – How Expense Are They Really

Maybe the high cost of medical care is just a result of the very expensive medical devices that we and the doctors all depend upon to produce the modern miracles of medicine. We often hear about how expensive the state of the art medical systems are; and therefore why it costs some much when your doctor wants to have you tested with one. Now, are these devices really that expensive?

Let’s consider the buyer’s market for these systems. Given the high price (by the way, price the what the manufacturer want to charge, cost is what they had to spend to create and to assemble it) the hospitals, doctors’ practices/groups, medical centers, and clinics that can afford to buy one is limited. So yes they are expensive because the price is high. Whether the price truly reflects the costs of creating the machines is really a different issue. The most we can conclude from the “limited market space” for these products is that, yes the profitability of the devices requires that each entity purchasing one will have to contribute a large part of that profit. The market space is actually bigger than just the US health care system, these systems are also in demand from foreign buyers. So the market is bigger than just us US tax payers.

If these system just cost a lot to actually construct, well then they are expensive and the only recourse we can look for is to help insure that they are used to the greatest extent possible. This will at least make the unit cost of use as low as possible. Achieving this requires a highly efficient and coordinated health care system which allows different entities to collaborate in promoting the use of the system.

What about the cost of research that needs to be recovered by the companies that manufacture the machines? These state of the arts technologies are going to come from start-up companies that are “betting the ranch” on their new idea. Some come from research centers that are funded by the government, manufacturers, or organizations that are often charities or non-profits; and some are from educational institutions that are funded to do basic and applied research.

If the devices are from a start-up, then they either really are just recovering their costs; or if they are reaping really big profits then they have to reinvest (hopefully producing more marvels) or pay out (and get taxed). We pay either way.

If the systems are from research centers then the question is how much are they subsidized by our taxes or tax exemptions that we still pay for. The investments made by the funding entity for the research has already made their profits or funding from some source. So we were likely the source of the underlying research dollars. In this case, it seems unfair that the manufacturers get to load research investments into the price of their systems. It’s like getting to pay again.

If the system comes from educational institutions research programs, well we all paid or pay for that through one method or other: taxes, tax exemptions, tax deductions, tuitions, royalties paid to them, and so on. With such a profit motive, there is no reason to contain the price that get established that we as end-users windup having to pay.

In the end, the medical equipment systems appear to be a health care program cost contributor that on their own are not easily reduced. The means to reduce their costs impacts are to motivate developers and manufacturers to produce lower-cost system that are as or more effective than current devices.