
How the medical supply industry blocks device startups from selling to hospitals - lgv
http://www.washingtonmonthly.com/features/2010/1007.blake.html
======
paul
When people complain about entrepreneurs building social networks instead of
curing cancer, they need to understand that this is a big part of the reason.
The internet attracts so much innovation in large part because it's very open
to innovation. In more regulated/corrupt (the two are closely related) fields,
such as health care, there are many barriers to competition that kill
innovative new companies. Mobile was actually very similar to this in the pre-
iPhone era (because you needed to make deals with carriers). This in turn
leads to less investment, since it's kind of dumb to invest in a doomed
company.

We're at a point in history where most of our problems are social/political.
Our technology is good enough to make the world into a nice place for
everyone, but we don't do it because our social "software" is broken. It's
easy to make fun of Facebook or Reddit as being all about sharing cat picture,
but the reality is that they also are changing the flow of information and
influence to be much more peer-to-peer instead of top down (e.g. three
television networks). Many will disagree, but I believe that in the long term
society will evolve to match this more egalitarian structure. The most
effective way to cure cancer may be to first cure the social disfunctions that
lead to the types of situations described in this article.

~~~
smokeyj
So is regulation the answer or the cause?

~~~
paul
Both.

I think it's a little bit like asking whether programmers are the cause of
bugs, or the solution. The problem is that the regulations are being created
by people who are either incompetent, corrupt, or possibly both. Unfortunately
people in government don't really have the right set of incentives, and so
it's not surprising that the results are awful. Imagine if software were
written in the same way that laws are written :(

------
angersock
Interesting bit from the end of the article:

 _"This isn’t just bad news for Shaw. Because his company is in the red, he
has been unable to pull together the financing he needs to expand his factory
in Little Elm. So he has partnered with Chinese companies, which put up money
to build assembly lines in China in return for permission to produce his
syringes for the Chinese market. When his patents do run out, the Chinese
manufacturers will be the ones poised to bring his technology to the world
market, meaning all the jobs and economic benefits that could have gone to the
local residents will instead go to the people of Gansu Province. "_

Goddamnit.

~~~
mclin
I'm surprised these companies didn't give up and start selling in other
countries, like Canada or the UK, to begin with.

------
robomartin
After spending way too much time on this thread here's my parting thought:

Some choose to believe that corporate greed is the cause of issues such as
that highlighted by this article. Others believe that the political and legal
system in place has flaws that create the conditions necessary for such things
to happen. And some are in between these two schools of though.

Here's the kicker: While we live within and with our reality other parts of
the world are watching. And in some parts (China?) they are surely having
thoughts akin to "these people are too stupid to get out of their own way".
And so, we'll keep arguing and "enjoying" the ineptitude, complexities and
realities of our reality while others will watch, learn, study and take
measures to ensure that they don't fall into the same traps.

Yes, there will probably be better syringes in China than in the US. And, with
time, that will be true about a lot more things and a number of other
countries.

Enjoy.

~~~
mudil
Thanks, robomartin, for your thoughtful commentary. You are right 100%,
through and through. Unfortunately, as I learned long time ago, it seems to me
that much of the people on HN believe that gov't is never at fault. That
regulation, taxation, and other forms of gov't oppression are good things.
Ever. Especially, when reassured by a politician.

Today's progressives are just sheeple. They will believe blindly any
politician that says "for the children's future" or "for teachers and fire
fighters," so let's raise taxes or strangle pharmaceutical companies.

A "progressive" used to mean "believe in individual" or "believe in freedom."
Today it means "believe in gov't" or "believe in regulation" or "believe in
politically correct speech", etc etc (the list is long).

Progressives, in other words, are just statists.

~~~
robomartin
Thanks for the feedback. People create a view of the world based on where they
came from, what they have experienced, what they've been taught and many other
factors (for example, religious indoctrination). This is a fact.

Regrettably the governing class in a country like the US knows this very well
and has learned how to pander and manipulate the masses in their favor. This
is also a fact.

Then you have the media. Most people will subscribe to one ideology and set
forth to consume media that aligns with this ideology as closely as possible.
This is comfortable and easy to chew on. No gag reflex involved. This is
another fact.

The media know this, and feed that need. They report with overblown outrage
about mostly unimportant stories. They go on and on all day long beating the
same dumb story to death until they can't flatten it any more. They cater to
the audience that, due to ideology, will stay with them. It's SEO, TV style.
This is also a fact.

All of this leads to great levels of polarization. How else would you have
huge chunks of the population self-identify with one party or another? They
buy into a "tribe" and stick with it, no matter what. Tribal behavior is a
most fundamental human trait. This, also, is fact.

Those in the middle of all of this, a group of which I consider myself a
member, are willing to stop and think for a moment and not rattle off what
others are saying without some thought and consideration. This is hard. This
requires work. This requires rejecting years of unintentional indoctrination
and trying to see the world for what it is. This is about the Allegory of the
Cave in more ways than one
(<http://en.wikipedia.org/wiki/Allegory_of_the_Cave>). It requires consciously
refraining from the most fundamental human impulse to be tribal and believe
what has been pounded into your brain. This is hard (I repeat) and this is why
most people don't do it.

At home we make it a point to learn about multiple points of view. We watch
CNN and FOX. We also watch Al Jazeera and LinkTV. We are also fortunate enough
to speak more than a couple of languages, so we consume international news
from more than one perspective as well. It's amazing what you can learn this
way.

I don't know where I am going with this except to say that there are a lot of
voting groups that, just like Plato's cave, have been living and looking at
the shadows in their own caves. And virtually nothing more than that.
Government workers, Politicians and Unionized workers (to be brutal in my
generalization) are examples of such groups. Individually none of them are bad
people. As a voting and acting block they can be absolute morons, but only
because all they've been willing to consider are the shadows.

I don't know how to fix it. I don't know if it's even possible.

------
bsenftner
I experienced this somewhat when consulting for a medical device startup.
They'd developed a modular system supporting Laparoscopic procedures, reducing
hands during surgery, which equated to significant safety increases as well as
cost reductions. However, their big issue continues to be navigating the
procurement process at hospitals, which is akin to requiring a full time
lobbyist per hospital for the duration of that hospital's adoption of their
system: 2-3 years, after getting them to actually try the system, which often
requires 18 months of demos, trials, and negotiations.

Our technologies we, geeks, develop are going to have a very hard time
revolutionizing the medical industry. The big players have closed the door
behind them in a major way.

~~~
johngalt
You're selling to the wrong party. Don't sell it to the hospitals, sell it to
the insurance companies.

Hospitals will be thinking

1\. "will insurance claims be rejected for non-standard treatment?"

2\. "If something goes wrong with my malpractice insurance cover it?"

Even if everything goes correctly, and procedures are better/faster/cheaper
the insurance companies will just lower the amount they pay. The hospital
doesn't have a lot to gain here.

Conversely if an insurance company hears about a new better/faster/cheaper
treatment suddenly that's they _only_ thing they will pay for and the company
selling that treament makes a mint, with hospitals knocking down their door.

~~~
rsheridan6
I'm not so sure about the insurance companies. I am a pharmacist and I see
insurance companies insist on paying for expensive things and declining to pay
for cheap things all the time. For example, they won't pay for cheap Relion
brand syringes, but they will pay for BD syringes (BD is the bad guy in the
linked article), which cost much more. I'm not sure about the reasoning behind
this, but I'll bet it's sordid and corrupt.

------
saturdaysaint
God I hate the healthcare industry.

This was on my mind this morning because my girlfriend isn't rich and relies
on Lunesta to sleep (I'll leave the fact that her doctor is advising her to
take this indefinitely for another day). It's extortionately priced -
something like $6 a pill - enough to gouge insurance companies thoroughly and
enough to wreck havoc on the finances of someone that's not rich and lacks
insurance.

It turns out, this is actually the most profitable drug in the world. Yet
_they can't even sell it in the EU_ because it's a modest derivative of a
(generic) drug that's been around since 1989.

It's disturbing that this is where the patent game ends - with power-brokering
and lawyering determining who gets the wealth and power.

~~~
jrockway
Why can't she take the generic drug?

Also, $180/month is not really what people mean by "high healthcare costs".
They mean something like a $50,000/day hospital stay. $180 is a lot if you
don't have a lot of money, but it's hardly backbreaking.

~~~
rsheridan6
The generic drug he's talking about was never approved in the US. It's not
available here. You can get it in other countries.

~~~
saturdaysaint
Indeed, and there's been much discussion that the chemistry that makes Lunesta
patentable is trivial, basically a patent for its own sake.

"a single isomer drug rarely offers a therapeutic advantage over the mixture
of isomers from which it is derived. However, the single isomer is patentable
distinct from its multiple-isomer origin. Thus, the drug company can get a
monopoly."

<http://insomnia-relief.com/information/?p=49>

------
ChuckMcM
When I think of the federal government 'fixing' health care, this is the sort
of thing I think they can fix. Not single payer, not mandatory coverage, just
good enforcement of anti-competitive practices, ways to enable innovation with
patient consent Etc.

~~~
tyree732
Are you so sure about that? excuse-me's comment, right above yours in my view,
talks about how the government has anti-competitive arrangements with big
military contractors. How would the situation be different with healthcare?

~~~
Symmetry
I think the fix in this case would be removing the laws that encourage anti-
competitive arrangements.

~~~
tyree732
How is the government incentivized in any way to do that? Politicians in the
US receive substantial campaign contributions from established military
suppliers who would stand to lose a lot from said laws. I don't see any
rallying cries from the public about the competitiveness of supply
arrangements government entities currently have.

~~~
Symmetry
Basically this is one of those areas where we can expect positive change iff
there's a lot of public outcry. Sometimes the political stars align and we get
actual reforms, but its not anything that we should expect that politicians
would ever get up to on their own.

------
dr_
"Or he sold his wares to systems so small and poor that they weren’t on the
GPOs’ radar—prisons, nursing homes, Indian reservations, and the like."

So to minimize my risk of line contamination, I'd be better off getting my
medical care in a prison. (Assuming this guys product really does work).

What will change this is how hospitals etc. are reimbursed - the trend is that
reimbursements will be based on outcomes, especially with changes introduced
by the ACA that go into effect in 10/2012.
<http://www.healthcare.gov/law/timeline/full.html>

So what matters then, are actual outcomes. If in fact there is an increase in
infections from line contamination, or poor surgical outcomes (from a towel
being left behind or what have you) - this will be measured and monitored, and
believe me hospitals will address them, especially the for-profits, which seem
to be surging again.

There was a interesting company out of Blueprint Health that addressed
hospital procurement, allowing price comparisons. I don't have the details on
how the GPO's are dealt with though.

<http://www.procuredhealth.com/>

~~~
kposehn
Yeah, the reimbursements look like a good measure. We're a fan of some of the
outcome criteria, especially the opportunities we've found to streamline
things.

dr_, are you in the health tech field?

~~~
dr_
yup.

------
DanBC
The movie EDIT "puncture" (thanks diek!) is a reasonably entertaining account
off the retractable needle.

US healthcare (and thus, US patients) may miss out on improved syringes, but I
hope they're able to sell many of these to the developing world where needle
re-use is a serious problem. Re-using needles when 10% of the population has
HIV/AIDS is awful. Not just because you risk transmitting HIV to other people,
but because people with HIV are not able to resist any infection you pass onto
them.

I'm surprised that the practices are legal - I'd have thought that the US
would have had good law to ensure free and fair competition.

~~~
gcb
Name one regulated market in the us that have fair competition.

Btw. It's not only in the us. Regulation today is the most secure form of
monopoly

~~~
Aloisius
Uh, regulation often prevents monopolies. See: anti-trust regulation.

~~~
jlawer
Doesn't anti-trust regulation stop people ABUSING monopolies rather then
forming them?

Most of the teeth I've seen in the anti-trust regulation is the ability to
break up companies after they have monopolized.

------
robomartin
As an entrepreneur I have dedicated most of the last 25 years to doing
hardware (read: manufacturing) ventures. Manufacturing in the US is hard, if
not impossible, save cases where the ecosystem or nature of the market can
support it. Problems one could face include: ip (patents) mine field,
government regulations, liability issues, lack of localized supply chains,
high labor costs, high insurance costs, high taxes and more.

Then, to boot, if you are lucky enough to have to deal with the government or
in an industry where government has decided they know better, well, this can
be described with two words: Pain and Frustration.

The mechanisms described in the article kept me from even considering making
an effort to do some good in the medical field. It's just too painful.

Finally, about two years ago, I had enough and decided to be done with making
stuff and pivot into software-only products. This was not a huge pivot in that
most of the products we manufactured during the last 20 years had significant
software elements (embedded, FPGA and related workstation applications). The
transition just meant making a very conscious effort to not go after hardware
ideas. This was hard in that I personally like making physical products. But,
no more.

My point in relating this personal story is that I have the scars to
understand what this little syringe company must have been through.

The article in question highlights something that we should all understand
very well at this point: Government rule-making is, more often than not,
fraught with unintended consequences that, ultimately, end-up costing us in
terms of money, freedom and choice. And, when it comes to the medical field,
might even result in people dying.

Part of the problem is that we continue to give the keys to the shop to
bureaucrats who have zero real-world, business or employed-by-a-non-
government-business experience. You really can't expect much from anyone who
has lived their entire life within the confines of an ecosystem where personal
decisions carry almost no risk. That is vastly different from the real world,
where, if you are a bad programmer or lousy barista you get fired and, no, you
don't get to enjoy 80% of your salary for the rest of your life.

Programmers, for example, know and live this issue of making the wrong
decision. In the course of solving a problem we choose an approach and go with
it. Sometimes it works and often-times there are unintended consequences that
need attention. Other times the approach is entirely wrong and has to be
scrapped in favor of a different idea. The solution is evolved rapidly until
the right approach surfaces. This ultimately leads to better solutions,
particularly if peer reviewed.

The trouble with government decision making is that you have the equivalent of
managers who don't know how to code --at all-- telling you what algorithm and
database to use to solve a problem. Furthermore, it is equivalent to these
non-technical managers making their decision the law for the company. And,
yes, regardless of what the overwhelming reality of the matter might indicate,
changing their laws is either impossible or you need 2/3 of said morons (non-
technical managers) to agree to the change. In other words, you should expect
the beatings to continue until the morale improves. Of course, reality in the
technology world is closer to the idea that those who actually understand the
subject should make the decisions. Wouldn't it be cool if every single
politician had to have a real job 3/4 of the year? Work three months for
government and then go back to the private sector. Now that could be
interesting.

~~~
gamble
I'm not seeing how the government was an issue in this case. The article is
about how private companies use kickbacks and cartel behaviour to restrict
what products are available to hospitals. It seems like a lack of government
action is the problem here.

~~~
robomartin
No,no. Read it again. The government setup the rules that enabled exactly that
behavior.

If they (government) didn't try to play entrepreneur or investor we'd be far
better off. There are cases where government involvement is warranted. I'm
with Ron Paul on this one: Get them off our backs, we do and did just fine
when they had less hooks into us. This is particularly true with the existence
of the Internet. It's pretty hard for a large company to misbehave today and
not pay a serious price for it. Laws are far less powerful in this regard.

~~~
anigbrowl
No, in 1986 the government removed rules (forbidding kickbacks) designed to
prevent such behavior. In 1996 the government exempted medical supply
companies from many antitrust regulations. The facts laid out in the article
are diametrically opposed to the point your are trying to make.

 _It's pretty hard for a large company to misbehave today and not pay a
serious price for it._

for example?

~~~
Aloisius
People like to pretend like all government regulation is stifling to
innovation, but it is pretty clear that some regulation is necessary for a
properly functioning market.

The trick is, how much is too much. There needs to be a very good reason to
shield any company from anti-trust regulations and I can't think of a valid
one that would apply to medical supply companies.

~~~
Symmetry
I think that saying that regulation is necessary (as opposed to desirable)
might be too strong. In most cases things can still function without
regulation, because people know things aren't regulated and can take that into
account by being cautious. Now, this is often inefficient and causes some
number of people to get screwed over, but it still works.

I'm sure there could exist some golden system of regulation for health care
and there are even countries like Singapore seem to have found something close
enough, but its not clear to me that our current system in the US actually
manages to be better than no regulation at all.

~~~
Aloisius
I disagree. Regulations are absolutely necessary for a functional market.

Corporate espionage, sabotage, outright lying about your products, financial
fraud, tying, price fixing, collusion, bid rigging, geosplitting, ponzi
schemes and dozens of other manifestations of bad corporate practices that
regulations prevent (or try to) were put in place in the first place because
they destroy markets. These aren't hypothetical problems either, there are
many many instances of these practices happening over the last few centuries.

Hell, this article effectively says that medical providers are engaged in
product tying and it is destroying the market!

Truly free markets are a myth. The best you get is mostly fair markets.

------
lisper
I can tell you from firsthand experience (as an investor) that the gist of
this article is 100% correct: there are significant barriers to bringing a new
medical device to market that have nothing to do with the merits of the
product or the supply chain, but are quite simply pure protectionism for the
established players. If anyone wants details, contact me privately.

~~~
seehafer
As a product guy who works in medical device startups, I can reinforce this
statement. Even if you find a way to exit the supply game by developing
something that doctors have some choice over because they believe it has an
impact on patient safety/outcomes, you still run into many of the issues
detailed in the article. Here's just one: if you develop something that is
truly revolutionary, you'll play hell trying to get paid for it, because the
payers (private insurance and Medicare for the most part) only pay out for
certain codes. It takes years to get a new code.

------
tdpeterson
_"In the case of the towel bid, hospital administrators were shown a
PowerPoint presentation (a copy of which she gave to me) indicating that going
with the Medline and Medical Action bids would save them between 6 and 29
percent. But this was relative to the same companies’ bids the previous year,
not the bids offered by other vendors."_

I'm interested in seeing these slides and sent a request to the article's
author.

Were the decision makers present aware there were other vendors? If so, how
was this data not called into question? It would be interesting to see if the
data was presented in a completely misleading way or if there was some level
of laziness and complacency on the decision-makers' part as well.

Regardless, misleading presentations are always interesting to examine, such
as Tufte's assessment of the presentation given to NASA officials before the
Columbia disaster ([http://www.edwardtufte.com/bboard/q-and-a-fetch-
msg?msg_id=0...](http://www.edwardtufte.com/bboard/q-and-a-fetch-
msg?msg_id=0001yB&topic_id=1)).

Edit: Just received a reply from the author that she's unable to share the
presentation as the person that originally shared it has been "subject to
legal harassment." Lame!

------
kposehn
I'm glad that our startup isn't dealing with medical devices, only with
software. Still, I've been working with some medical device makers and it is a
wild and crazy world they work in. The whole GPO system is clearly broken, but
I've met some people - at device makers no less - that are passionate about
ending it.

We're doing our part to help that along.

~~~
seehafer
Can you be more specific about what you're doing? I'm in medical device and I
would love to see software startups help untangle the mess that is healthcare
reimbursement and purchasing.

~~~
kposehn
Email me - keith [aaaat] appzorz [dooot] com

I can't really be super specific yet publicly, but we may be able to talk
further.

------
rdl
I hope Amazon casts its all-powerful crappy-legacy-vendor-destroying eye upon
the medical supply market soon.

All the value-add GPOs offer (other than pricing) is stuff Amazon could easily
do for free -- inventory tracking, etc. It's all IT, and basically zero
marginal cost.

As long as existing GPOs can't legally prevent a hospital from also using the
Amazon GPO, I don't see how anyone could stand against Amazon. Amazon would
have zero incentive to lock new device vendors out of the market. Sure,
purchases from the Amazon GPO wouldn't contribute to meeting your legacy GPO
quotas and rebates, but Amazon has access to capital at levels which will let
them destroy regional competition if required -- they could price match any
subsidized prices.

~~~
creamyhorror
"casts its all-powerful crappy-legacy-vendor-destroying eye"

The most memorable phrase I've heard all week.

------
jrockway
_contact with our health care system the fifth leading cause of death in this
country_

Whoa. Can anyone give this in-passing snippet some context?

~~~
kyro
Yeah, hospital-acquired infections are huge. In fact, they're a huge reason
why we have so many aggressively resistant strains of organisms.

~~~
excuse-me
More the other way around.

Widespread over-the-counter antibiotics, over prescription and agricultural
use are the reason there are so many resistant organisms. Healthy people with
the organisms going into hospitals full of sick people is the reason they get
there.

Poor hospital cleaning, high occupancy rates and especially people using
keyboards is the reason they are huge.

~~~
kijin
> _people using keyboards_

Never thought about that before, though I do know that keyboards are _filthy_.
Is there any evidence that the rate of infection increased since medical
professionals began to use keyboards for data entry? But I guess that kind of
data would be buried under a lot of other factors that emerged over the last
2-3 decades.

Also, how would you go about fixing that? Tablets might be easier to clean,
but you're still touching a surface. Speech recognition would be cool, but
then you're spraying microscopic drops of saliva all over the place. Is paper
just as unsanitary, or does the fact that fewer people share the same sheet of
paper somehow mitigate the risk?

~~~
DanBC
Some keyboards have silver in the keys.

Some keyboards have a squishy membrane cover which can be sprayed and
scrubbed.

But, really, people need to wash their hands (soap and hot water) before they
touch a patient.

~~~
excuse-me
The problem is the number of patients and the amount of data that has to be
entered into different systems means you would spend 90% of your time washing
your hands or taking gloves on and off.

Imagine programming where everytime your hand went between the keyboard and
mouse you had to go and wash your hands!

The problem is that adding more computers is always a 'good thing' - how can
more info about a patient be bad?

~~~
kijin
Hand sanitizer?

It takes all of 2 seconds to squeeze it onto your hands, and you can apply it
on your way to the next patient.

------
tripzilch
This article definitely took its sweet time to get to the point. Sure it's
interesting, but the first thing I want to know is, "what did they do this
time?", so I can decide whether maybe I already know about it or not.

Certainly the story about developing new products for a failing healthcare
industry is interesting, and I would love to have read about it, if I hadn't
been skimming through "yeah yeah yeah and how did they prevent him from
bringing it to market? skip skip skip, aha."--IMO, it's just wasting my time,
though I would have gladly read the stories about the entrepeneurs if only
they'd have gotten to the point _first_.

Even though I thankfully don't have anything to do with the US healthcare
system, I'd love to pass this story on to some of my friends that
unfortunately do. Except I don't want to waste their time either.

And that really is a missed opportunity to bring to light something rotten in
the system, because of a badly written article.

------
scotty79
"Then, in 1986 Congress passed a bill exempting GPOs from the anti-kickback
provisions embedded in Medicare law. This meant that instead of collecting
membership dues, GPOs could collect “fees”—in other industries they might be
called kickbacks or bribes—from suppliers in the form of a share of sales
revenue."

No one in their right mind could imagine that anyone could be genuinely stupid
enough to think that allowing organisation that was supposed to work for
buyers, take money from sellers is a good idea.

That law was 100% surely bought. You don't need any other proof that USA has
best Congress money can buy.

------
guard-of-terra
But why doesn't they try to sell to other hospitals? In Europe, e.g., Switz
hospitals are very well known for their quality. They might be interested.

------
digitalengineer
Reminds me of something: "Hacking Human Waste"
<http://news.ycombinator.com/item?id=3456484>

Two guys found (and patented) a way to get rid of very expensive human
(hospital) waste. Working product in a few hospitals and everything, but
they're looking for a way to scale up (they are great hackers but suck at
finding an investor). Any tips?

------
anxiousape
So he's a great innovator. So stop complaining and sell it outside of USA.

------
TwoBit
While the main point about the medical supply monopoly seems solid, I'm
suspicious about this Shaw guy, his character, and his product. I'd like to
see an objective counter-point.

------
mahkra
This sounds like what the movie puncture was about. It doesn't end well.

Still worth seeing. <http://www.imdb.com/title/tt1582248/>

------
ricardonunez
I'm wondering if the best option for them isn't to create a partnership with a
existing manufactures. It will be easier for them to get in the market.

------
hypervisor
He needs to sell his product in a different country. If the system is broken
here, he should go elsewhere and see if he can make a change.

------
Duff
Is there anything significant, important market out there that is not a
cesspool of corruption?

------
Estragon
There's a movie based on this guy's struggle, but it's pretty terrible.

------
tylee78
reminds me of the 400 dollars the hospital charged me the other day for part
of a splint (the wrapping cloth) which was probably manufactured in China for
$.50

------
jmvoodoo
Someone needs to bring BYOD to the medical industry ;)

~~~
excuse-me
The simple solution is to make all the drugs that a hospital uses illegal.

Then overnight pure capitalism would create an efficient market to import and
distribute them. When it's cheaper to buy heroin on the street than an aspirin
in a hospital you know that the market is screwed up somewhere

------
rscale
This caught my eye:

 _Kaiser spokesman Jim Anderson argues that if Shaw’s products didn’t make
their way to hospitals it was because of “significant supply issues” on
Retractable’s end. He also says they were prone to malfunction and that, in
several cases, needles detached and were left “stuck in the arms of
patients.”_

I'm doubtful that a Kaiser spokesman would fabricate these problems, which
leads me to believe that perhaps this reporting isn't as balanced as it could
be. Maybe these needles are great, but perhaps there are two problems here,
one being a competitor with a lot of control over the customers, and a second
being problems with supply chain and quality control.

~~~
wisty
On the other hand, here's another quote from the article:

"Without a GPO contract, it doesn’t matter how good your product is. Even if I
could wave this wand over your body and cure you from cancer, chances are I
couldn’t sell it to hospitals"

The core problem is, big manufacturers offer discounts (or bigger kickbacks)
for bundling. A niche product is unlikely to succeed, even if it's obviously
better. A product that has pros and cons is not going to have a chance.

Also, I'd imagine that a detached needle could be a greater legal liability
than an infection. It's easy to prove that a needle detached in a patients
arm. It's a lot harder to prove that an infection was caused by a needle
without safeguards. "First, do absolutely no harm for which you can be sued
for" is not a great creed, but it's one some hospitals will follow.

If you're a supplier, perhaps you're best shot is to license to a big
manufacturer, to break in, even if you're capable of producing and marketing
your product; because you'll be locked out of the supply stream if you go it
alone. That's a pretty sad state of affairs.

~~~
chaostheory
"The core problem is, big manufacturers offer discounts (or bigger kickbacks)
for bundling. "

Yeah someone can correct me, but to add to the point: hospitals have razor
thin margins. If I remember correctly, it's 10% or less.

~~~
gusfoo
10% is hardly "razor thin", it's quite respectable in a lot of industries.

------
excuse-me
Almost exactly the same with military equipment.

Design a product that saves the lives of front line troops, demo it to the
troops and they love it.

Then try and sell it to the government and you are told that you have to form
a consortium with an established supplier - Boeing/Lockheed-Martin/General
Dynamics in the US, Thales/BAe/EADS in europe.

Now imagine the sort of deal you are offered as a startup negotiating with a
trillion $$ global defense company with a stranglehold on the market!

~~~
gscott
And if you try to export it the Government can block the sale of any military
use equipment. I know a person who developed an external coating for
submarines but the US Military didn't want to use it, so he found a (friendly)
country that did but was denied the license to sell it.

~~~
excuse-me
But not if you simply manufacture it abroad.

We found a nice friendly country in the middle east who were more interested
in their troops have good equipment than keeping lobbyists in business. They
took the idea, made it for us and buy them from us.

(don't worry - it was the one full of beard wearing, no-pork eating, religious
fundamentalists that like us)

------
byandyphillips
Wow, I love reading a book on the web. Either cut your copy down by 1/2 (no
one is going to read the whole thing) or place a disclaimer at the top on the
average it will take to read the whole article.

~~~
jeremyarussell
Or ya know, as an beings who can keep track of things like how fast we read,
you could simply scroll through the article like i did, go, okay that's about
ten minutes. Then decide if you want to keep going. Saying no one would read
the whole thing is a bit much to, considering I read every word, and I'm sure
others did to.

