By Aljosha Nokakovic
The expression “you get what you pay for” never quite applied to healthcare. Prices are at historic highs and don’t seem to be going down. The entire industry is tied to political, economic, and even cultural factors that keep prices from going down.
It may sound cliché, but it really has to do with the capitalism driven “for profit” system that we have going in the states. The government is not involved in controlling prices, but a few big players who own the majority of the medical market certainly are; it is in their best mutual interest, to keep prices high. At the end of the day, executives need to maximize shareholder value.
One reason that prices are so high, that is brought up in the recent New York Times article, is that only five companies control one-third of the world’s orthopedic sales volume; three of which share the same headquarters in a small town of 14,000 outside of Indiana. The situation with medical device manufacturers is similar, with the top companies owning the majority of the industry. I agree with Elisabeth Rosenthal, the NY Times journalist, that there arethree stepsto the process of keeping :
- Make small tweaks in implants and devices, and continually patent these changes. Smaller companies don’t have the power to fight these patents.
- Mutual collaboration. Is it a coincidence that the 3 big joint companies share the headquarters of 14,000?
- Develop brand loyalty with the KOL (key opinion-leading) doctors. Fancy dinners anyone?
Across industries, the process stays the same,if there are a few players at the top, there will be less variability in pricingThe price of a total hip implant has nearly increased by 300% from 1998 to 2011; the Times article describes this as “sticky pricing,” a result of no government regulation (not much we can do here), and no legitimatemarketplace competition. Naturally, solutionmarketplace competitors; as mentioned above, there are huge barriers to entry. Thealternativeis when there is a change in the amount of demand So how does this occur
One way prices can drop is by thehealthcare market expanding and going globalSo what does this mean? Myself and the rest of the Medko team believe that stimulating the“global healthcare” involvesusing technology to:
- doctor and patient
- accessibility to healthcare
One exampleof a startup contributing to the global healthcare market Watsi, who use the power of crowdfunding to make healthcare accessible to children in Africa from other parts of theworld can donate money oughso that the parents of the child access healthcare Although not as extreme, there are still millions of people in the USA who cannot afford proper healthcare. We believe that by finding a doctor abroad individuals in the states can not only afford their own care but collectively drop the price of care in the states.
Medical tourists, people who leave the country for proper medical care, can effectively drop these prices by putting pressure on the monopoly of medical device and joint companies. or a patient the process is simple, it comes down to selecting the right doctor abroad, and finding a trustworthy provider to handle the logistics. We plan on doing exactly this, with our VIP service, introducing the world to “the smarter medical travel” option.
Obviously, there is no one solution to the ridiculously high prices of healthcare in the states, but we believe global healthcare can flatten the market, and as long as we help one case at a time, we know we are making a difference.