Wii Balance Board Gives $18,000 Medical Device a Run For Its Money 422
Gizmodo highlights a very cool repurposing effort for the Wii's Balance Board accessory. Rather than the specialized force platforms used to quantify patients' ability to balance after a trauma like stroke, doctors at the University of Melbourne thought that a Balance Board might serve as well. Says the article: "When doctors disassembled the board, they found the accelerometers and strain gauges to be of 'excellent' quality. 'I was shocked given the price: it was an extremely impressive strain gauge set-up.'" Games controllers you'd expect to be durable and at least fairly accurate; what's surprising is just how much comparable, purpose-built devices cost. In this case, the Balance Board (just under $100) was compared favorably with a test platform that costs just a shade less than $18,000.
"Not for ________ use" (Score:5, Insightful)
What determines the price of a scale is not just its equipment or accuracy.. but also the insurance the manufacturer has to carry in case something goes wrong. That's why medical devices are more expensive... you're also paying for the liability of somebody being misdiagnosed by a technical malfunction. Highly unlikely, but the money that has to be paid when that happens and gets proven is huge.
What have we here? (Score:5, Insightful)
Wii parts replacing 18,000 dollar medical equipment... PS3s replacing 10,000 dollar supercomputers... clearly the video game industry knows something we don't.
No wonder (Score:3, Insightful)
Hospitals charge so much. Someone along the way decided to jack up a price and its been flowing downhill to the consumers ever since.
Re:"Not for ________ use" (Score:5, Insightful)
What determinds the price is production, and demand. The wiimote is mass produced, which makes the price even less. And its in high demand.
Medical equipment? There is a certain number of hospitals involved ordering X amount of copies, and the demand is static. They will also pay for it. Basically its overpriced, but the question is how much its overpriced.
False comparisons (Score:1, Insightful)
These "test platforms" are not just a slab of plastic a few inches in size: they are usually about two feet or more square, can handle up to 400 pounds of static force (and often a ton or more impact for jumping), and more importantly, come with a full diagnostic software package that can track patient history and results. Show me ANY medical office outfit that can develop this level of software for $18,000 or less, let alone support it, and hack up the proper interface to the WII board.
Re:"Not for ________ use" (Score:4, Insightful)
What determined the price was the word "medical". It's a word, like "marine" which denotes adding zeros to the price of an item that costs only a moderate amount to actually manufacture.
Re:"Not for ________ use" (Score:3, Insightful)
Tell Washington, DC about that. If companies are charging a monopoly rent, they should be regulated.
Perception (Score:3, Insightful)
Re:No wonder (Score:3, Insightful)
They actually have squat to do with each other.
"Tort reform" is the rich scaring the poor and stupid into absolving them
of any real responsibility for when something goes wrong. Not only do you
have to be stupid and careless in order to be sued, but you also have to
be a total jerk about taking responsibility for your actions.
Big scary verdicts only occur when perpetrators and insurance companies try
to blow off their victims. Then equally ignorant saps in the jury add zeros
with no real understanding of the numbers they're creating.
Education reform would be more effective really.
"Health Reform" and "Tort Reform" are not really related. Although both are
portrayed as a solution to a problem that neither directly addresses.
Letting insurance companies off the hook hasn't lowered prices. Neither does
turning insulating the customer from the cost of health care. Ads that tell
selfish old geezers that they can get an overpriced motorized wheelchair
"for free" is what keeps health care costs high. Young kids being duped into
thinking that their doctor visits are "for free" is what keeps health costs
high.
So does ensuring that devices are adequately tested.
The LOC price for something used in air traffic control or avionics is probably similarly expensive.
Re:"Not for ________ use" (Score:4, Insightful)
Re:What have we here? (Score:1, Insightful)
This just in: economies of scale not a myth.
Re:"Not for ________ use" (Score:4, Insightful)
Those companies are only abusing their monopoly if someone new comes in and is pressured out of the market by anti-competitive tactics. If no one else wants to take advantage of the opportunity to compete in a market, you're looking for a different reason why. Off the top of my head, perhaps there's too much government regulation making it too difficult to get into that field. Too much insurance costs because of liability concerns in an overly litigious society. Perhaps just no one realized how much of an opportunity there was here because no one really has a clue how much healthcare costs these days since no one using it looks at the bills anymore - they just have their insurance cover it and complain when there's a problem. How do you expect competition in a market to lower prices when the consumer doesn't decide what features to invest in and compare based on price?
In other words, the answer you're looking for is not "more government" - that is the problem.
-N
Re:This is not a shock... (Score:5, Insightful)
I've started purchasing my own CPAP machine and accessories as well. Far cheaper than dealing with the home medical place locally (owned by my insurance company no less), even with insurance coverage picking up part of the bill. For less money, I get a better machine and direct support. And I can run the purchase through my FSA, so it's tax free. :)
FWIW, nebulizers are the same way. I bought a very nice machine online for about half the cost of the local place, and the local place wanted to give me a gigantic POS. I bought a very compact unit that has much nicer features.
Re:"Not for ________ use" (Score:5, Insightful)
What determines the price of a scale is not just its equipment or accuracy.. but also the insurance the manufacturer has to carry in case something goes wrong. That's why medical devices are more expensive...
You're missing a couple other issues:
1) Provably sterile out of the box. If the patient has an open foot ulcer, and some Chinese dude sneezed on the board before he wrapped it up, and then the patient dies of infection...
2) Bodily fluid proof, if not disposable or autoclave-able. The board is too expensive to toss and too weak to autoclave, furthermore god only knows what it'll do electrically when a patient pees on it. Or if not pee, some highly conductive cleaning fluid. Or blood.
3) Intrinsically safe. In the unlikely event of using or storing the board in an atmosphere contaminated by flammable anesthetics, it won't blow up. Closely related to oxygen proof plastics. No great achievement to make a plastic that does not support combustion in plain ole air, but I have no idea what plastics (if any) will not continue to burn in pure oxygen. And you know some heart patient is going to drop their oxy mask on the wii board and the batteries will spark at the same time. Also if the patient collapses and you need to use the crash cart, you don't want the electronics inside to catch fire. Would be unfortunate to restart a patients heart only to have the patient die of infected burns.
4) Proven EMC/EMI compatibility. Last thing you want is for the board to interfere with the patients portable EKG machine or whatever.
5) There are all kinds of allergen related issues. For example, no latex (rubber bands) used internally for any part at any time during construction. Peanut oil sounds like a "green" lubricant for metal machining, etc, until you run into someone with an allergy.
6) Connected. It needs to be sold by the current collection of booth-babe saleswomen with open purchase order accounts at the hospital. Its possible the hospital has no pre-existing relationship with any place that sells wii balance boards... Literally no way for purchasing to buy one...
7) Software licensing which probably prohibits this kind of activity, along with controlling nuclear power plants and air traffic control. "Lean forward to lower the control rods, lean back to raise the control rods. Lean left and right to control primary circulation pumps. Walk in place as if running away to declare a SCRAM."
Theres a bunch of other "EE" related medical device rules that are pretty interesting, especially as regards AC power supplies, until it gets too creepy realizing a bunch of folks died before they figured the rules out.
Its not so hard to follow the rules, its just HARDER to prove someone in China followed the rules...
Re:"Not for ________ use" (Score:3, Insightful)
depends:
- some costs are fixed: design, overheads
- some costs are linearly progressive: materials, though may be degressive w/ volume discounts
- some costs are degressive : marketing, certification and legal (if applicable), maintenance infrastructure (if any)...
so as a general rules, the more you sell, the cheaper it is to make. The exceptions are capacity constraints, either materials or manufacturing capacity.
now, price != cost, and prices may rise even though your costs fall:
- limited market: no point cutting prices if you end up selling as much, not more, as with higher prices
- capacity constraints: if you can't make more, even though your costs are going down, there's no point
- unelastic demand: if demand does not react to price changes, no point to lowering prices
- luxury market: it has been proven that demand for some items actually falls when prices fall, because people are buying an image of exclusivity, quality... rather than a product.
Re:"Not for ________ use" (Score:5, Insightful)
There is no justification for an $18,000 price difference for what amounts to the same fundamental technology. I don't need a formula, or theories as to why this is. The medical industry is full of a bunch of crooked greedy bastards. They use the same basic technology to accomplish the same result, probably with the very same components, all of which can obviously be had for very cheap. Costs are applied at the component level. If you can buy the same components for a Wii as in this other piece of equipment, their prices should be a bit closer. Our medical system has been gamed so badly for so many years, that a hospital doesn't even blink when they see $18,000 for a piece of equipment. They will happily pass the costs on to the patient, and the patients health insurance.
If this isn't a case of price fixing then I don't know what is.
What we really need is transparency is pricing for all medical costs. Force manufacturer's to provide their component costs for everything like eqiupment, drugs, and consumables, so that the consumer can see exactly what kind of markup their paying for.
Re:"Not for ________ use" (Score:3, Insightful)
That's a theory that's debated in college, and I take the opposite side. Proof that somebody was hurt shouldn't be needed to prove monopoly abuse. What about the company that was never founded because somebody told the would-be founder that it wasn't worth doing? If nobody's willing to extend you credit because the monopoly exists, then that's a barrier to entry.
Re:"Not for ________ use" (Score:3, Insightful)
What determines the price of a scale is not just its equipment or accuracy.. but also the insurance the manufacturer has to carry in case something goes wrong. That's why medical devices are more expensive... you're also paying for the liability of somebody being misdiagnosed by a technical malfunction. Highly unlikely, but the money that has to be paid when that happens and gets proven is huge.
There's a lot of stuff that goes into a device to "certify it for blah blah use". Like you said, liability insurance. There's also a lot more stuff. Like the fact that doctors can expect to recoup greater amounts of the price of the unit than a gamer is likely to.
Take the same device, everything the exact same. Sell it to people who are paying out of pocket, and sell it to people who have insurance to cover it, and the people who are paying out of pocket are going to spend a lot more time assessing the value of the device, and if they need it. Thus, the economic model for them requires pushing affordability to ensure that the out-of-pocket person will actually pay.
This is equally visible in the medical fields actually. Cosmetic breast augmentation costs about $8,000 in my area, while just an x-ray and CT-scan at an ER is about $5,000. Compare that. Full general anesthesia, operating room, surgical expertise, and recovery costs as much as two tests with medical equipment, and comparatively little expertise. Why such a little price difference between the two, considering the vast gap in service? The cosmetic surgeon has to get patients to pay out-of-pocket... thus, the cost has to be something someone can generally afford, or they would never get business.
The important thing to remember here is that the people building these medical devices, by free market factors are charging as much as they can get away with charging. If medical facilities pay $18,000 for these items, then that is what they're going to charge, regardless of the costs put into it.
Re:"Not for ________ use" (Score:2, Insightful)
Let's just say for the sake of argument the Wii balance board, and the medical device both cost $10 million to research and design.
Ignoring the additional compliance, insurance, and qualification a medical device VS a toy has to go through to be produced.
Let's just say nintendo or their insurer was really concerned about safety, and perfect operation of the debe no complaints.
Further, let's say once all the preliminary work was done, the Wii board cost $75 per unit in materials and labor to manufacturer, and the medical force board cost exactly the same $75.
If Nintendo sells 5 million BBs to retailers at the price of $85 per unit, their net revnue is: ($85 - $75) * 5E6 - $10 mil = $40 million dollars revenue from the sale of BBs,
The sales proceeds were: $425 million dollars.
Their cost of sales were: $75 * 5E6 + $10 million = $385 million dollars.
$425 - $375 = $40 million
A very slim profit margin of 10%, but still not bad. Usually game consoles / accessories are sold at a loss anyways, the money is in the software, which can be updated at much lower cost.
Now... as for the medical device... we know there won't be demand for $5 million. Let's be conservative, and say the medical device manufacturer's market research tells them they can expect to sell 1,000,000 units, it is an innovative device at all, and there are thousands of hospitals all over the country.. What should the price be?
If they make it $85 bucks, even... their revenue will be:
($85 - $75) * 1million - $10 mil = $0
What? They spent $10 million to develop this, they sold 1 million units, and no revenue to show for it? Just taxable business operations? (By the time other costs are considered, this is actually a net loss of money)
Here's why: Sales proceeds: $85 * 1 million = $85 million in sales
Cost of sales: ( $75 * 1 million + 10 million = $85 million )
$85 - $75 = $0
So they have two options... go after a larger market that will buy more units, or raise the price.
Their product is only of interest to hospitals really, so the only option is to raise the price.
How much does the price need to be for there to be a 10% profit?
Sales proceeds need to be: $93.5 million.
That means, the price for each unit needs to be: $93.50 per unit.
What if they want a healthier profit margin? Their sole purpose in life is to manufacture medical devices, they don't sell software -- they need a good profit margin from selling their product.
A fair profit margin is 100% or more.
To achieve that, the minimum price is $930.50 per unit.
At a higher price, two things will happen (1) they will sell fewer units, and (2) their support costs per unit will be higher -- better warranty and service will be expected.
Also, 1 million sales is unrealistic for a niche product, it will probably be more like 200,000 sales.
To maintain a healthy product with 1/20 of 1 million, the actual price needed will be 20x that, or $18,610.00
Holy smokes.. that's awfully close to the '$18,000 medical device' price.
I wasn't planning on that, it was really a coincidence, honest..
I'm sure insurance is a consideration, but I think it pales into comparison to the small sales volume, and the high initial costs to design and manufacture any electronics good.
Medical insanity (Score:3, Insightful)
What determines the price of a scale is not just its equipment or accuracy.. but also the insurance the manufacturer has to carry in case something goes wrong. That's why medical devices are more expensive... you're also paying for the liability of somebody being misdiagnosed by a technical malfunction. Highly unlikely, but the money that has to be paid when that happens and gets proven is huge.
So they system is "protecting" patients right out of being able to afford treatment, and people are still willing to stand up and defend this insanity. With these sorts of controls, many, many patients go without treatment, or worse go for alternative Voodoo treatment that do harm because they simply can't afford the real thing. It's a sure sign that the medical system is itself quite ill and probably clinically insane.
What needs to happen is companies need to be held accountable for gross negligence and willful malice, but permitted to release a medical device with a disclaimer about the level of testing that has been done. If the overhead for adhering to medical standards is literally an 180 fold increase in the price, clearly there is something very wrong with the efficiency of the system.
Re:"Not for ________ use" (Score:4, Insightful)
To make sure that only the official cable was used, there would be loop-back configurations built into unused pins at each end of the cable, so that a connector patched up from twenty-five core cable and a couple of RS232 snap connectors wouldn't work.
Kind of like how Apple charges $35 for an iPod USB wall charger, and makes sure that my generic USB wall chargers / powered USB hub won't work.
Re:"Not for ________ use" (Score:5, Insightful)
You have obviously never worked in an industry with high quality control standards. The price of some product isn't the sum of its individual components. You have to pay people to design it, and people to test it, and then pay insurance on it. For small markets, this means that the price is very steep for even simple things. What would you price this device if the parts cost $100 per unit, but the R&D cost (2 doctors and 2 engineers for 1 year) was $1 million, the insurance cost was $500,000/yr, the customer support cost was $100,000/yr, and the market size was 100/yr?
Economies of Scale (Score:2, Insightful)
Medicare won't pay for Wii because of dual purpose (Score:2, Insightful)
Medicare and many insurance companies won't pay for Wii because it is dual-purpose device
NYTimes had a story when they refused to pay for iPhone-based speech synthesizer for a paralyzed patient but had no problems paying $5000 for a desktop based one because the desktop-based device was not able to do anything but synthesize voice
Re:What have we here? (Score:5, Insightful)
It's all BS. Forget all of the posts regarding FDA, documentation, testing, and that crap.
It's just a matter of how many units get sold, like microprocessors.
If you design, make, and sell one, it's $500 million. If you design one, make 500 million, and sell 500 million, they cost $1 each. Profit is the same either way.
Not a lot of people buy medical devices, with some exceptions.
Nintendo can't make them and start with high prices, then drop them later. They have to assume how many they will make, sell, and guess a good price before their first unit is sold.
And yes, I have worked in medical device manufacturing, and I currently work in non-profit cancer research. We have numerous genetic sequencers around, like ones from Illumina. They cost like $750K each, but it's really surprising how little materials is actually in them. A $500 laptop is technologically 10,000 times more advanced than one of those Illumina boxes.
It's true that medical devices are more expensive, and I'd be the first person crying foul about it, but they often really really do have good reasons to justify the higher costs... usually.
If you want to talk about price rape, look no further than Cisco.
$2000 card
http://www.cdw.com/shop/products/default.aspx?EDC=1352161 [cdw.com]
$13,0000 card
http://www.cdw.com/shop/products/default.aspx?edc=1424619 [cdw.com]
They are the SAME EXACT CARD, with a little tiny firmware tweak. We have a couple of these in the 5580 series firewalls.
Re:"Not for ________ use" (Score:3, Insightful)
What about the software that interprets the data? The driver to connect the scale to the software? Yeah I bet you could slap together some code in python in a day or two, but it still has to be documented, and verified by the FDA. I'd rather they be too careful, and have a device they can trust, rather than look at some data, notice an anomaly, and dismiss it because "the software is buggy", when in fact it might be significant in that you had a minor stroke and they didn't catch it due to crappy data collection. And then you die. Or are paralyzed. No, I'd rather have the correctly build, specified, and documented devices used on me, thanks. Medical care (quality, not cost/availability)in the US is top notch due to all the checks the FDA has.
But can they use it? (Score:3, Insightful)
I know in my professional industry, there may be many a cool technology or device that i want to use, but may not be able to, despite the fact it looks good and can handle what i throw at it. However, i may not technically be able to use it because it has not been tested against specific guidelines or a part of the product was not tested against particular standards with the right amount of traceability.
I believe that’s why some particular product may cost more than any other. I.e a device to be used in a medical institute for diagnosis of any kind would probably require quite a lot of process in it's accreditation that the Wii probably didn't have to go through to be used as a game machine.
Been there. (Score:2, Insightful)
Re:"Not for ________ use" (Score:3, Insightful)
Moreover, even when there are multiple insurance companies, it's generally very costly for them to send people around checking out all of the different options for all of the different hospitals to determine what they'll pay for what.
The competition needs to be pushed out a level: to the patient. Patients need to have a stake in the cost of their own treatment, and they need to have the ability to easily compare prices between competing providers (hospitals/physicians). It's the decentralization of choice that makes markets work well. Centralized choice is better than no choice, but not nearly as efficient as decentralized choice.
This, in fact, is the core problem with our healthcare system, and every other, including the centralized ones. Everyone is experiencing massive cost inflation, and it's precisely because the end-customers are insulated from the cost of their own health care decisions. All patients want the most effective test/treatment available, regardless of whether it's only 10% better than another option that costs a third as much. Providers, for their part, are both morally and financially motivated to go for the better and more expensive approach. Morally because it's the best treatment for the patient and financially for obvious reasons. The only one who has any incentive to keep costs down is the insurance company. And if they're actually competing for customers, then they have a counter-incentive to keep the patient happy, which means ever-increasing costs.
A national, single-payer system as envisioned by the left just exacerbates this problem because it even further separates the patients from any concern about the costs of their care. It must, therefore, replace patient-driven cost-control with centrally-managed cost control, a.k.a. rationing. But that runs into the same problem the insurance companies have with their cost-control efforts: It makes the customer mad. In the case of a private insurer, that anger may lead to lost business. In the case of a nationalized system it's even worse, because it leads to votes to "expand and improve" healthcare... and we'll figure out how to pay for it later.
What we need is to get patients back in the loop. High-deductible health insurance so that routine expenses are paid out of pocket should be the norm, not the exception. For more expensive treatment, the patient should still have to pay a portion, though obviously it has to decline fairly quickly as costs rise.
When patients routinely ask the doctor "Okay, what will that cost?", then we'll start to see some significant downward pressure that begins to at least contain the growth of health care spending, and perhaps even starts to reduce costs.
How to reconcile that with the desire to make health care more widely accessible is a challenge, but not an insuperable one. But that's for another post.
Has Little to Do with Lawsuits (Score:5, Insightful)
Re:"Not for ________ use" (Score:3, Insightful)
But I'm suggesting that "good enough" may very well be good enough.
It depends on what you are measuring. A scale is indeed measuring only one parameter, but a balance board can easily measure several. You need syncronized access to all sensors to recreate your movements on the board, you can't just poll them one at a time.
If we're talking about a scale, do we really need to spend $10,000 for FDA testing and approval? It measures weight... Can't you pretty much verify that with another scale or two?
Doctors who treat people with excessive weight need to know the exact numbers, especially as the readings are taken mid-course. They tell the doctor how effective the drugs and methods are. Half a pound is probably an unacceptable and unjustifiable error. And you can't use "another scale or two" because they can be also wrong. Here is something to read [wikipedia.org] about it. A proper multi-device setup would be great, but it would cost more than one device that is accurate enough.
Also the cost of the equipment is spread among many patients who use it over years. Let's say the balance board costs $20K and it is used for 10 years and then written off. Every day one measurement is taken. $20K / 3600 days = $5 per patient. Is this something to lose sleep over?
You miss the point here - cost is irrelevant (Score:5, Insightful)
There is no justification for an $18,000 price difference for what amounts to the same fundamental technology. I don't need a formula, or theories as to why this is. The medical industry is full of a bunch of crooked greedy bastards........
I think your missing the point here.
It's not how much it costs or if there ripping us off .
"The how much it costs" argument is irrelevant.
Its the fact that we are now getting devices, which are used to play games, in our homes which are comparable to highly sensitive medical devices.
WOW !!!
The doctors in this melbourne hospital should also be congratulated for looking at alternative ways of doing things.
Re:"Not for ________ use" (Score:5, Insightful)
> I guess we were paying $99 for the QC sticker they put on it before they sent it off through the supply system.
Actually, there's a very good real-world example of a cheap electronic component that nevertheless can be very expensive when its quality is absolutely certified: electrolytic capacitors. Today, in 2010, brand new devices are STILL being manufactured with electrolytic capacitors that have substandard electrolyte. This is a problem that was supposed to have gone away YEARS ago. Why is it still around? Because the bad electrolyte is a tiny, tiny bit cheaper to make... and the capacitors tend to work just fine for at least a few months. In other words, they fail prematurely... but not immediately.
If you're building something that absolutely, positively, must NEVER use an electrolytic capacitor with bad electrolyte, you have no real option besides buying only capacitors that are certified (and can be audited) all the way from you (the company building the device that uses them) to the chemicals used to make the electrolyte itself. It's not enough to buy "a good brand". To get that level of certification, every party along the way -- distributor, wholesaler, supplier -- has to be certified capable of keeping them secure and properly stored. Otherwise, an employee (or manager, or higher) at the supplier could substitute counterfeit capacitors, then sell the genuine ones elsewhere.
The point is, that degree of auditing and handling is insanely expensive, because it involves SO MANY different parties (all of whom want to be reimbursed for the extra trouble). It's made more expensive by the fact that there are (fortunately) very few things that really NEED that kind of quality control. Life support equipment and nuclear power plant control systems are obvious excamples where it's justified, costs be damned.
That said, this particular device isn't life support equipment, regardless of how hard someone might try to make it sound like the tiniest malfunction would lead to death or injury. I think it's safe to say that this particular device's price is all but guaranteed to come down a few thousand dollars if they want to keep selling it.
Re:"Not for ________ use" (Score:3, Insightful)
The threat of competition is enough to keep a natural monopoly competitive. If said company becomes too abusive, new businesses will be profitable regardless of entry barriers.
Citation needed that a natural monopoly that isn't abusive exists.
Re:"Not for ________ use" (Score:4, Insightful)
Are you though? Because I bet if that did happen they still wouldn't assume liability.
Re:"Not for ________ use" (Score:4, Insightful)
I get it. So what you are saying is that governments would be far better off manufacturing all this stuff themselves rather than contracting it out. Not only are you eliminating wasteful profits but also enormous insurance costs because the governments can readily self insure.
Now lets have a little bit of fun with the insurance lie. If insurance costs are so high, then the private medical manufacturers must really, really crap, because that is what drives high insurance premiums, lots of failures (no failures, low premiums), so get rid of the private corporations because just like insurance companies, the government should also recognise them as being high risk. The quality control systems in all medical manufacturing facilities must be so bad, that no insurance companies give any of them a discount.
I would love to see some of the warranties on medical equipment, from the sounds of the marketing trolls it must be decades but I bet a lot of that junk comes out with nothing better than 90 days (now that's a big insurance risk, ha ha). The underlying reality is that all this low manufacturing run custom equipment should be manufactured by government, because no matter how inefficient they are, it well still be way cheaper than paying for inflated profit margins at the manufacturers, oh yeah and the insurance companies. Especially the insurance companies because according the medical manufacturing trolls, the very, very expensive quality control system means absolutely no failures.
Re:"Not for ________ use" (Score:3, Insightful)
Someone could be misdiagnosed and sue is what could happen.
"what the market will bear" (Score:3, Insightful)
Want to make a mint selling ordinary hardware?
All you need to do is either
A. Get it FDA certified for use in medicine.
Or
B. Get it FAA approved for use in aviation.
You can pretty much guarantee a 100x price premium in the former case or perhaps 10-20x in the latter case.
Of course, requiring government certification for things upon which the general public relies for life safety is not necessarily a bad thing, but the price premium that comes from the certification requirement probably is proportional to the square of the cost of doing whatever is necessary to obtain said certification.
Re:"Not for ________ use" (Score:1, Insightful)
If we're going with the example given above by the GGGP then its exactly the same part which makes that irrelevant.
The simple fact is people will justify anything to make themselves feel like they're not being ripped off. Just look at bottled water as a simple example. People come up with all sorts of excuses as to why they think it's better then tap water then someone like penn & teller come along with their "Bullshit!" show and rip all the excuses to shreds.
I don't buy the whole insurance nonsense either when it comes to common parts which can be bought anywhere. When it comes to paying, companies will be the first in line trying to claim it wasn't their fault. Trying to claim money back would probably cost you more in legal fees then you'd get back.. There's always an exception however it's simple to see that most of the time you're probably being ripped off.
Re:"Not for ________ use" (Score:4, Insightful)
Production and demand are sufficient to determine price only when the market is perfect.
This is not true for medical equipment, because the market is highly regulated.
I work in the field of medical devices, so I see this every day. We have to keep copious records of the design process of the hardware, the testing to validate and demonstrate perormance, and each device has a record kept of every periodic maintenance call and every service call for a performance problem (e.g. breakdown).
All this adds to the cost to bring a product to market, and then adds to the cost of keeping a device running.
And on top of all that, the health "systems" that provide patient care in the USA are an extemely imperfect market...
I have seen many instances in the North Eastern states of extreme over-capacity. Great, in that if you need an X-Ray or an MRI you can get it done within fifteen minutes (which is three sets of paperwork to prove you can pay). But that means that a device is sitting around 80% of its time unused. But other posters will point out, "you can't put a price on your health", so people will cough up to $3200 for a simple abdominal X-Ray that takes, literally, 45 seconds of device time. The same X-Ray costs (I'm told) around $800 in Japan, and less in France or the UK. But in France and the UK, you turn up for your appointment, fill out no extra paperwork, but wait for maybe 90 to 120 minutes to go under the device, because it is utilised at 90% to 100% of the time.
Finally, even though you state that "demand is static", this is not quite true. There is relatively little growth in the number of hospital beds places in the USA,Europe and Japan, but the demand for every increasing resolution in imaging, ever faster turnaround, every simpler interfaces so that less qualified (i.e., cheaper) staff can operate the device for more qualified staff (i.e. doctors) to spend more time doing diagnoses... And that is in the mature, saturated markets of the world... then we can talk about BRICS...
AC
Re:"Not for ________ use" (Score:4, Insightful)
I'm not talking about IR. Hell, I have a $90 vid cam that does IR imaging. The Sony cam had a thermal imaging mode and yes, if aimed at a window, it would fail; but if aimed at a poorly insulated wall, you could make out the outlines of your neighbors.
People were worried about being recorded doin' the naughty, when it was easily foiled by properly insulating your walls. Not to mention that the quality was... well... quality isn't the right word for the image it would give through even the thinnest of drywall, let alone studs and siding...
Re:"Not for ________ use" (Score:2, Insightful)
Re:"Not for ________ use" (Score:3, Insightful)
Well, specifically in regards to the military, this is not true. Since you cannot, generally, sue the US government because of sovereign immunity, they don't care about insurance to cover failure. All those components they buy, with few exceptions, don't come with additional guarantees unavailable through standard retail or wholesale channels. The price is because of vendor contract lock-in in this case.
Re:"Not for ________ use" (Score:2, Insightful)
This makes absolutely no sense. People with insurance, high deductible or not, generally do not question the costs of remaining in good health. They sign consent forms for procedures and deal with the bills after the fact. This is why bankruptcy rates from health care bills are so high. The people who do not seek treatment based on costs are almost exclusively the uninsured. If the internal link to your argument is seriously that patient will start haggling with the people responsible for keeping them alive, you might want to rethink your position.
People don't question the costs because they are not paying it. The insurance usually does. It's all the insurance plans that drive prices up. If you got full coverage, what do you care what the doctors charge and how much drugs are. If you actually look at what is available you will find that doctors are prescribing drugs that are $50 a pill when there are generic brands that are the same thing for $5 a pill. The thing is no one is asking why the price difference because the default attitude is "Insurance is paying for it", doctors and patients alike.
Re:"Not for ________ use" (Score:5, Insightful)
Re:"Not for ________ use" (Score:3, Insightful)
The guy Parent was arguing with was probably thinking of this link, scroll down to "See through clothing"
http://www.kenrockwell.com/tech/ir.htm [kenrockwell.com]
The link specifically states what the camera sees through is cotton, at the time this camera was released I believe swimsuits got all the attention.
Re:"Not for ________ use" (Score:3, Insightful)
Demand curves probably look like this:
Demand for a medical balance board @ $18000, maybe 1000
Demand for a wii fit @ $18,000 maybe 100
Demand for a medical balance board @ $100, maybe 10,000
Demand for a wii fit @ $100, maybe 10,000,000
Engineering cost for both, probably $1,000,000
Re:Has Little to Do with Lawsuits (Score:1, Insightful)
This.
Exactly
BTW, the problem is the same in all countries, this is not US specific (though US patients may ahve deeper pockets).
There are very few ways out of this, and een fewer solutions that do not require authoritarian measures. But allowing the medical sector to freely decide the price of medical stuff, just like we allow the law sector decide the price of legal stuff (through punitive damage) is a recipe for disaster.
Re:"Not for ________ use" (Score:5, Insightful)
We're talking about a diagnostic device. Not a life saving device. Not even for internal use. It is quantifying balance: we know the patient has balance, we just want to know how much of it. It is not even diagnosing whether a patient has a disease or not, or what disease a patient has.
If it is faulty, the doctors will know. Either it doesn't work, or the values do not make sense. A doctor with a little bit of experience will know from looking at the test about where the number should end up, and if out of expectations can take another device to test again. They're cheap, so you can have more than one on hand.
Sterility is not even an issue here (beyond basic cleanliness of course), it is not for use in an OR.
The main reason these things are/were so expensive I think is because of the very small product runs. Really small: hundreds, maybe a few thousand. There was no other use for these sensors, so development cost has to be shared over a few thousand pieces at most. Come the Wii with its gadges using basically the same tech, and both production cost and development cost per unit drop enormously. It matters a lot if you share costs between 1000 or 100,000 units.
Then probably the medical version is much stronger and sturdier, lasting longer, but the price difference is too big to make up for that.
Re:"Not for ________ use" (Score:3, Insightful)
Would this "FDA" be the "Food and Drug Administration" in the USA? When the article mentions the "University of Melbourne", the only such university I am aware of is in Victoria, Australia. Australia does healthcare very differently from the US.
Re:"Not for ________ use" (Score:1, Insightful)
They did not charge 6k for the HDD.
They charged 6k for the fact that the hospital can KNOW that all machines area as they should be as people who KNOW what they do echanged parts. Not people who CLAIM to know.
This is a) to prevent people dieing and b) to be on the safe side of the law SHOULD someone die.
Re:"Not for ________ use" (Score:3, Insightful)
Actually, NOT adding it would be insane.
The interesting part is that affordable healthcare saves money. When someone can actually go to a doc when he has a minor disease instead of trying to fix it himself (often by simply dumping antibiotics into his body, which can make it worse over time), he will get well again faster. Worse yet, if he decides to ignore it (because he simply cannot afford fixing a minor, non crippling problem with his body), in the long run he might end up as a cripple, unable to work anymore and relying on that social security that already costs more and more by the minute.
Our healthcare system started cutting cost by a quite interesting system: Free checkups. People can go and get a complete testing every other year (every year after you get to 50 years of age), free of charge. And they did, after all, a problem diagnosed early is a problem you can cure with less pain. And less cost. Identifying cancer early often makes it curable, results in a quite cheap operation and a productive member of the workforce instead of someone who gets heavy doses of expensive medication for a few years 'til his death (not to mention that he will probably not be too productive during this time). In general, they actually saved money that way.