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.
I don't know if anybody has read Thomas Kuhn, but this has a parallel in how science works. Science gets "stuck" in one way of thinking. During this time, people work on small details and innovate in tiny ways around the edges. After enough pressure builds up for a change, there's a paradigm shift (he was the guy who coined the phrase) and people start working in the new world.
Complex, rule-based systems of people are mostly quantum by nature. Progress is never a straight line. Instead, it stays frustratingly far away, then it jumps. The stuff you read about in school where everything happened in a linear, step-by-step fashion was just a bowdlerized version of things they tell kids.
Hopefully the system does not require an extreme amount of pressure and our next jump is not too far away. (Apologies to students of Kuhn if I butchered his thesis badly. This is what I got from his work)
The next time someone suggests antitrust laws are uniformly bad and should be abolished due to their (mis)application in tech, this is a great counterpoint.
Mind you there's a fair number of entrepreneurs out there solving difficult problems. But they're not as many and they don't get as much press.
I was very interested in biology in high school. Part of the reason that I ended up working with computers instead is that the feedback is much faster (compile and run) and the leverage much greater (e.g. Bill Gates got rich with a software company, not a life sciences company). Needless to say, I don't regret choosing software over biology.
But I think an entrepreneur's skill set is more of a limiting factor in the type of startup he/she can decide to pursue. After all there are problems that are potentially more lucrative than social networks but if you don't have the domain expertise or technical knowledge to solve those problems you may not even know they exist and if you did, would not be able to solve them.
There's a more extensive discussion on this here: http://swombat.com/2012/1/19/idea-reach-cofounder-myth
The regulations are another hurdle, but I think they are easier to get through since everyone is on the same playing field in that regard. But getting your product into hospitals and labs? There's a battle I don't even know where to start fighting.
Maybe it's time to start looking exclusively at foreign markets.
The simplest explanation I have come up with goes something like this. Cancer is you, the only thing that cancer describes is the breakdown of the billion year contract that enabled Multicellular organism to exist in the first place. There is no single way to tell cancer from non cancer and just as importantly almost cancer cells from normal healthy cells. You can literally have 2 different cancers at the same time that are closer to you genetically than each other. Out of something like 10^(10^10) viable forms of cancer, a few themes are vastly more common, but the edge cases are effectively endless.
PS: A billion years from now we might not find a way to travel faster than light because it might not be possible. It might not seem like it, but I am not convinced it's possible cure all possible forms of cancer in a human body. However, people with cancer are serving far longer after all this research than they where 40 years ago and continuing down this path hopefully we can transform cancer from one of the more common and nasty ways to die to something as rare as lighting strikes.
The worst monopolies always seem to me to be underwritten by government policies. The worst part is that, for the most part, the policies were created to try and do the right thing, but end up doing the opposite.
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 :(
"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. "
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.
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.
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.
Currently they rely on the rest of the world to find the best designs and practices, then cherry pick the good parts and make the whole thing efficient with centralised control. For them to pull -ahead- permanently they need to start fostering their own innovation. Capitalism and transparency have been shown as the best way so far to achieve this
It's interesting to see how in China a "benevolent" (using the term loosely) dictatorship is able to push billions of people forward. One could of course argue about a million things they are doing wrong and there would be no doubt that the charges would be on point. However, what they seem to be doing very well is taking their time to become a super power in their own right. At our expense as well as others.
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.
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.
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.
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.
"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."
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.
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.
dr_, are you in the health tech field?
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.
Btw. It's not only in the us. Regulation today is the most secure form of monopoly
Most of the teeth I've seen in the anti-trust regulation is the ability to break up companies after they have monopolized.
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.
A lot of the time the rules are not made by bureaucrats but by politicians in receipt of lobbying money and an industry-supplied amendment which the politicians has neither read nor understood; also, when private actors dislike bureaucratic decisions, they frequently sue the bureaucratic agency in question to prevent its implementation. Blaming the problem on timid bureaucrats without acknowledging these frequently encountered situations is a hollow argument.
FTA: As it turns out, Shaw’s retractable syringe hit just as these trends were converging. In fact, the year his product came onto the market, three of the nation’s largest GPOs merged to form a company called Premier, which managed buying for 1,700 hospitals, or about a third of all hospitals in the United States. Shortly thereafter, Premier signed a $1.8 billion, seven-and-a-half-year deal with Becton Dickinson. Under the agreement, member hospitals—among them Dallas-based Presbyterian, where Shaw would hit a brick wall—had to buy 90 percent of their syringes and blood collection tubes from the company. Over the next two years, BD landed similar deals with all but one major GPO. As a result, almost everywhere Shaw turned, he found hospital doors were closed to him.
Here, for example, no government bureaucrats were involved at all.
Businesses will adapt to the environment they operate within. If they can identify an advantage they will use it. I am not going to blame a business for moving within the existing framework any more than I would blame someone for taking advantage of SEO. In other words, given an environment where you can optimize your website for better search engine results, you do it. And that's fine. The problem is that those making the rules that create the opportunity for optimization are morons who have no clue about what they are doing or are simply corrupt.
Lobbying is a problem, but it is NOT illegal. I fully agree with disallowing it. So long as it isn't, those who can will use it. Again, you use the SEO tools available to you. When something starts to work against you or is no-longer allowed you stop using it.
Something else that needs to change: Government workers cannot be unionized. Why? They form a voting block that can influence the very laws that regulate them as employees of the government. It's as clear a conflict of interest situation as I can imagine. They vote as a block and favor anything that will keep them employed, protect their pensions, etc. The private sector has had to take haircuts for the last several years and suffer the consequences of ill-conceived plans from government. In sharp contrast to this the typical government worker is living in an isolated bubble where they can look forward to retirement while earning 80% to 90% of their pay for the rest of their lives and enjoying an amazing health-care package. Some even got raises. All on our backs.
In the real world the government workforce should have been cut by at least 25% to 50% and their salaries by another 20%+. Lifetime pensions seriously cut down and completely eliminated at some level. If you want to have a nice retirement make the right decisions and invest your money yourself, don't to on my back and my kids backs. This is so broken it's a tragedy.
I mean, see what's happening with the health-care law? They are hiring some 4,000 IRS agents to support it. These people are NEVER going to get fired. They'll probably cost us well in excess of a billion dollars a year in salaries, benefits and support systems.
Lobbying is a problem, but it is NOT illegal. I fully agree with disallowing it. So long as it isn't, those who can will use it.
Then advocate for that instead of putting all the blame on the government, and explain what you're going to fill the campaign finance gap with, or how you'll circumvent existing first amendment precedent. Bribery is one of those dances where it takes two to tango.
Something else that needs to change: Government workers cannot be unionized.
I happen to agree, but this is hopelessly irrelevant to the subject at hand.
In the real world the government workforce should have been cut by at least 25% to 50% and their salaries by another 20%+.
Suprisingly, Obama has cut government more than Reagan , and wants to cut it more . Rome was not built in a day and it isn't torn down in a day either. Your argument seems adrift from reality and increasingly resembles mere ranting.
I really have to thank you for that. I appreciate personal comments of this kind in the middle of an otherwise civil discussion. I apologize for not agreeing with you and moving on. Thanks.
This is how I see it:
1. Government makes an anti-kickback rule.
2. It relaxes the rule.
3. Corporations take advantage of the opportunity using kickbacks to entrench themselves in the market, costing us money, freedom and choice.
4. Your conclusion: government rule making is bad.
Feel free to provide 3 examples where there's significant regulation AND little/no regulatory capture.
2. Laws against theft.
3. Contract law.
4. Traffic laws (right of way, behavior at stop signs and traffic lights, etc.).
None of the above are perfect; all of the above have been used abusively at times; all of the above are needed to some degree for the smooth functioning of society. There are some debates in the area of traffic regulations about whether some situations would be safer with a little less regulation. There's also been some regulatory capture of contract law by lawyers, but because contract law is relatively symmetric, it's less of a problem there.
As to contract-law, mandatory arbitration is getting "interesting".
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.
It's pretty hard for a large company to misbehave today and not pay a serious price for it.
But, as with many well-intended laws, the shift had some ground-shaking unintended consequences. Most importantly, it turned the incentives for GPOs upside down. Instead of being tied to the dues paid by members, GPOs’ revenues were now tied to the profits of the suppliers they were supposed to be pressing for lower prices. This created an incentive to cater to the sellers rather than to the buyers—to big companies like Becton Dickinson rather than to member hospitals. Before long, large suppliers began using “fees”—sometimes very generous ones—along with tiered pricing to secure deals that locked GPO members into buying their products. In many cases, hospitals were obliged to buy virtually all of their bandages or scalpels or heart monitors from one company. GPOs also began offering package deals that bundled products together. To get the best price on stethoscopes, a hospital might have to agree to buy everything from pacemakers to cotton balls from the GPO’s preferred vendors. Hospitals went along because they got price breaks, usually in the form of rebates if they met buying quotas.
This situation only grew thornier in 1996, when the Justice Department and the Federal Trade Commission overhauled antitrust rules and granted the organizations protection from antitrust actions, except under “extraordinary circumstances.” Once again, the idea was to help struggling hospitals, this time by allowing the buying groups to grow big enough to negotiate the best deals for their members. But the decision led to a frenzy of consolidation. Within a few years, five GPOs controlled purchasing for 90 percent of the nation’s hospitals, which only amplified the clout of big suppliers.
This is a very popular view generally promoted in the more liberal corners of the political ecosystem. Not being in either the liberal or conservative extremes I tend to see things differently.
You have to ask a few questions to get to the bottom of it:
Q: What are lobbyists?
A: Organizations that create a way to reach out to
law-makers directly, voice opinion and have some
influence on relevant matters.
Q: Why do businesses use lobbyists?
A: Because they can and it provides them with a way
to navigate an already complex system.
Q: Why are corporations able to fund lobbyist?
A: Because it is legal
Q: Why is it legal?
A: Because politicians passed laws allowing it.
Q: Why did they do that?
A: Many reasons.
One might be that they need that funding to stay in power.
Another might be that they don't really care about us but
would much rather ensure their own political existence.
Yet another might be that we, the people, don't really
show-up in any meaningful way on their radars outside of
And, finally, one more reason could be that, well, we allow it.
Q: What should we do about it?
A: Make it illegal.
Q: Would corporations and lobbyists then be able to influence legislation?
A: Maybe, but at least not through those legally-provided channels.
A simpler example might be in product design. If I design a chainsaw that is faster and more powerful to use I'd expect businesses to use it to gain advantage over competitors and make more money. If, as a result of this more people are getting hurt because the design isn't very sound, you don't turn around and blame the businesses using it. The design was at fault. Bad engineering. People will use what they are given to work with. Fix the problem, not the symptoms. It's not a perfect analogy, but it illustrates the fundamental idea.
One can reasonably disagree with your simple-minded answers (imho). Notably wrt the third, fourth and fifth questions. Another possible answer is that corps. and bribers wanted a way to legally bribe politicians (to avoid jail time for illegal bribery), and hence created the concept of legal lobbying (it doesn't exist in many other countries, btw).
Nobody is saying that politicians are the root cause. We elect them. Ultimately it is our fault for allowing it. Then some of these folks appoint people to other positions. The appointments are probably worst than the already-challenged elected official.
When I hear someone carry the "corporate greed and corruption" flag I have a viscerally negative reaction to the statement. I don't know you, so I can't know where you are coming from. To be clear, what I am about to say has nothing to do with you and is not aimed or intended to represent you at all.
Whenever I've heard this from people in person that either I know or have an opportunity to learn more about the profile almost always falls within a certain range. Liberal, democrat, sometimes government worker or union member, no entrepreneurial experience, no understanding of the business process and no experience attempting to launch and run a business.
A lot changes once you've experienced the realities of business. I can't name one business driven purely by greed other than boundary examples such as the Madoff mess. Even the most maligned financial companies have to sell a product and cater to a customer base. Oil companies, for example, are a favorite punching bag. Are they driven by greed? Of course not! They sell a product. And they sell a product that requires huge investment. They are perfectly entitled to earn a profit and they are entitled to earn as much as the market will support. Supply and demand. If they take legally allowed action to enhance their standing or ability to compete, well, that's the law. Until it is changed they are doing nothing different than engaging in the "SEO" of their industry.
Somehow there's an automatic trigger point that says that large companies are driven by nothing but greed. Really? At what revenue level does greed become the underlying driving force? What where they driven by until they got to that level? I don't see anyone talking about companies such as Apple that way? Why? They are large. Very large. They don't do anything any other enterprise does not do. They manufacture in China. So do others, except that, when it is Ford that does it "they are greedy" is the first response.
Anyhow, let's agree to disagree. My world view probably does not intersect with yours in but a few places. And that's OK. I learn a little from everyone. Maybe one day I'll see things as they really are. Thanks.
Of course every issue has a simple visible portion and then there's the 90% of the iceberg under the surface. I view simple ideas as fundamental to start the thought process going. A lot of them are not viable due to the details and real issues deep down inside. I realize that.
It would be more accurate to say that there are no laws limiting the practice. You are reasoning as if governments set up the lobbying mechanism and then invited people to form organizations to engage in the practice. Historically speaking, this is not the case. There's a constitutional right to petition the government in the first amendment, and people are simply exercising it.
If, as a result of this more people are getting hurt because the design isn't very sound, you don't turn around and blame the businesses using it. The design was at fault. Bad engineering. People will use what they are given to work with.
Like the employees of the businesses that bought the defective chainsaws in order to gain a commercial advantage? The companies in your example weren't given a defective chainsaw, they elected to purchase them because the devices promised a commercial advantage. If they're injuring the employees, then maybe the employers should be compensating them and recovering their losses from the product manufacturer...which is quite similar what happens with workman's comp, funnily enough.
Most legislators don't wake up in the morning and say, "Oh boy, time to do evil deeds for money today". Regulatory capture normally involves exploiting the government's natural tendency to meddle.
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.
A field can be both over-regulated and under-regulated at the same time, in different ways. It might have the right total number of regulations, but too many that stifle innovation and too few that actually protect consumers. (Unfortunately, due to the nature of politics, those trying to remove the stifling regulations and those trying to add consumer protections often end up at each others throats.)
Market design is wicked hard. That's the role of governments. Business (court) law, a fair and impartial judiciary, enforcement, currency, etc.
I don't mind so much that any particular system is broken.
What troubles me is how hard it is to fix.
We're all staring at the elephant in the room. But the incumbent vested parties making a buck from a broken system, to the detriment of everyone else, are super effective at blocking reform.
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.
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.
Some regulation is always necessary. How would you expect contracts to work without contract law (i.e. regulations governing how contracts are to be interpreted, enforced, disputes about them are to be resolved, etc.)?
It is very clear to me that our current system manages to be better than no regulation at all (even though it is arguably worse than the ideal quantity and quality of regulation). To my knowledge, the only places with no regulation are places like Somalia, where the guy who has the largest number of the fiercest relatives and friends with guns gets to decide what the people around them should do.
I see you making this argument over and over in this discussion, but you seem to be ignoring the flip-side of that fact: People exploited those government rules.
Any calculus of culpability for the current state of affairs that ignores that fact, pointing fingers solely at the government, is myopic to the point of absurdity. No-one forced these medical supply cooperatives turned for-profit organizations to exploit the rules for their own advantage, establishing a system of pay-to-play kickbacks that demonstrably holds back progress and actually kills people. (Don't mind me. I'm a little pissed off about this particular subject right now; I just had an uncle die from sepsis.)
The people in those organizations made conscious, rational choices to engage in that kind of behavior. If they didn't foresee the consequences of doing that, they're as dumb, blind, and undeserving of the responsibility for stewarding their corner of the world as the government bureaucrats who created the rules in the first place.
Or are you actually arguing that people who exploit unintended consequences for their own benefit, regardless of the impact to the rest of the world, are somehow blameless? That only the people who made those consequences possible have any culpability?
It takes two to tango, after all.
Second, there is no more predictable rule of human behavior than the conscious, rational pursuit of self-interest. Adam Smith was very clear on this, businesses will seek to form cartels at every opportunity. We can legislate against explicit collusion, but these laws are very tough to enforce. It's very possible that the executives in these companies are deviating from legal standard, but enforcement of laws governing intent is even harder. As a policy matter, better / stricter law is unlikely to solve the problem.
The stronger solution is discouraging barriers to entry. Competitive entry of new players is the best discipline against cartel behavior.
Commenters elsewhere in this sub-thread are arguing that one bad regulation isn't an argument against regulation generally. But the problem is distinguishing the bad regulations from the good. It's very likely that at some point there was some policy argument for these stupid rules, sufficiently plausible at the distance held from all but the most expert. The formulation of such arguments to justify known-bad policy is a constant component of our governance. It's possible that the intelligence of the rules depended on some other rule or aspect long since departed.
That's the beauty of markets: The players' incentives lead them to constantly monitoring and adapting to conditions. And those incentives provide discipline that forces analysis from "sounds good enough to me" to more exacting standards. Congress here has suspended a large chunk of market operation, in a medical market where many other chunks have been suspended. It is not the least bit surprising that this has lead to grotesqueries.
The government did away with an oppressive, invasive, business-destroying regulation which limited the free operation of the market and the absolute and unfettered sanctity of contract. Suddenly subject to nothing more than pure market forces -- what lesser minds might call a "loophole", unless they've read the right economists -- rationally self-interested actors in the market did what rationally self-interested actors do.
Welcome to Libertopia.
Hospitals have no choice but to bend to BD's will.
Well, they could pay more in the short term and hope for innovation to undermine the monopoly over the long term, by buying cheaper and more effective products from disruptive competitors.
I could talk about how any organization tends to become less tolerant of risk over time. Failures happen and when they do the tendency is to make sure that they are prevented from happening again. And when they happen again (they will) the tendency to add more laws which, since the resources devoted to enforcing laws won't be increased, causes all laws to be enforced less well.
I remember a while ago The Economist had a feature one issue on the Dodd-Frank Financial bill that was pretty critical. Dodd and Frank then wrote in the next issue with letters that I though were, frankly, rather illuminating.
One gave the "Something had to be done, this was something, we did it" syllogism nearly perfectly. The other talked about all the hard work that went into the bill, how he'd talked with all sorts of professionals working in the financial industry and added all sorts of special cases so that the currently existing set of businesses weren't unduly inconvenienced.
Maybe there's an angle there. I'll use the example of an MBA degree to illustrate. A friend of mine complete an MBA at Pepperdine. Over dinner I asked him: "What's an MBA good for?". He said "Not a damn thing without context". He got the MBA after over a decade as an engineer. He knew what to do with it and how to apply it to something concrete.
Perhaps rules for government employ could change in that you would be required to have had a career in the private domain for, say, ten years, before even qualifying to apply. And I'm not talking about working at a fast-food joint. Different positions would have different requirements. There's a difference between someone working at the department of motor vehicles vs. the Mayor of a city. I would be OK with DMV workers having five years experience in a non-trivial job (no flipping burgers) but would want a Mayor with a solid twenty years in a position of responsibility in a private enterprise. I don't know if this even makes sense, but we need better people in government than what we are getting. That's probably a huge part of the problem.
No, it does with a great deal of certainty. HIPAA protects patient privacy, but often prohibits healthcare research, certainly increases the cost of health IT by orders of magnitude, and certainly destroys the opportunity to make good decisions about how to run a hospital or treat a patient.
The original plan was for the "P" in HIPAA to mean "Portability" but those parts of the bill were delayed and eventually dropped.
I think that that is one of the reasons we're seeing such a huge shift to the virtual world. Problems that used to be physical are gradually becoming software problems. A great example is how media is starting to largely be distributed through online channels, ie iTunes, or what Amazon is doing to retail. I recently started http://www.AudioNotch.com, a site that provides tinnitus therapy through online music. Before the proliferation of mp3 players, this problem would have had physical elements, I would have to mail CDs with the audio therapy for example, and users wouldn't be able to change their music easily. But now, due to pre-existing technology, I can do everything virtually.
Unfortunately, it looks like the medical devices industry will be one of the last to make this change.
Very well put in general. We're avoiding the device angle as well, due to the same things you've mentioned.
Government solutions to real-world problems are the EXACT opposite of this
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...).
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!
We're doing our part to help that along.
I can't really be super specific yet publicly, but we may be able to talk further.
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.
The most memorable phrase I've heard all week.
Whoa. Can anyone give this in-passing snippet some context?
"In the United States, the Centers for Disease Control and Prevention estimate that roughly 1.7 million hospital-associated infections, from all types of microorganisms, including bacteria, combined, cause or contribute to 99,000 deaths each year"
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.
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?
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.
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?
It takes all of 2 seconds to squeeze it onto your hands, and you can apply it on your way to the next patient.
Of course we are far too advanced to do anything so stupid today.
Now we examine a patient, go to the computer at the nurses station and type up the results, then the nurse comes along and rubs their hand over the keyboard and mouse, then you go the next patient ....
You can get washable waterproof medical keyboards but they are expensive, and get broken and replaced with whatever IT have on the shelf. Funnily enough I have never seen a waterproof mouse.
Medical errors officialy account for between 100,000 and 200,00 deaths per year, and between 20-35% of people who die in hospital are discovered at autopsy to have been misdiagnosed. BUT consider you are treating an 80year old man for pneumonia and when he dies the autopsy discovers he had undiagnosed prostate cancer - is that 'really' a medical
Then there are around 100,000 deaths due to hospital infections. 30,000 of them from MRSA alone = twice the number of people who die of AIDS. The rates in nursing homes and other 'medical' facilities are probably much higher but aren't as well monitored or reported.
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.
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.
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?
Still worth seeing.
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
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.
I'd also be surprised if what was said didn't turn out to be technically true, but that's not really the point, which is to spread FUD. Raising vague, out-of-context allegations is a time honoured mudslinging technique and I hate to see it accepted without question.
> “significant supply issues” on Retractable’s end
Out of context this is meaningless. What is a significant supply issue? It could be anything and everything, including this guy not liking the colour of the packaging or any other triviality.
It sounds odd to me that a company with $42MM in funding and desperately trying to move its products for over a decade would have anything other than a gross oversupply.
> prone to malfunction and that, in several cases, needles detached and were left “stuck in the arms of patients.”
This statement would be technically true even if the product in question was less prone to malfunction and needle breakage than the incumbent product! Without any sort of context, however, it is at best ambiguous and at worst quite possibly deceptive.
It's very possible to deceive and mislead without ever actually telling a lie.
"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.
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.
As someone who is trying to finish his Master's thesis relating to prostate cancer, claims like this make me cringe. It's like paying a marketing group to conduct a survey for you. Of course the results will be positive.
I didn't read the whole article since it's pretty long, but I bookmarked it for later. But this guy managed to burn through $42 million dollars and still hasn't achieved wide adoption?
If this was really about getting his superior technology to market, he would attempt to strike a licensing deal with these companies instead of trying to supplant them.
Fact is, many people in medical device and healthcare industry claim to be conducting research and ground-breaking work in the name of making people's lives better. But in reality, they're looking to get rich off of it. I respect that, but at a certain point, you need to decide what's more important: your personal profits, or the lives of the people you claim to be dying from this issue.
The guy who invented/discovered/extracted insulin didn't patent it/the process, even though he could've made tons of money. Again, if you want to make money, I respect that. But in that case, don't go whining about lives being lost.
I wish this guy luck, because it sounds like he has something new and novel. He just needs to realize that he has to pivot, not persevere.
First of all healthcare is a very conservative space. Unless your product demonstrate a truly significant progress, nobody will give an eye at you. The decision making progress is very slow and very conservative. So even without the big medical supply corp, Shaw might never had a chance anyway.
"And it seemed to be remarkably effective: a 2007 clinical study funded by Shaw’s company and conducted by the independent SGS Laboratories found the device prevented germs from being transferred to catheters nearly 100 percent of the time"
Cigarette companies have sponsored plenty of "independent" studies that shows that cigarettes are not detrimental and even healthy. So take that with a grain of salt.
"But Shaw still isn’t any closer to breaking into the hospital market, and in the meantime the life on his patents is dwindling."
Really? Patients losing their life over some IV caps?? IV caps are always going to be more prone to infection when compared to needles (since well, those caps are stuck in there for weeks while needles are disposable), but nurses are trained to look at sign of infections ASAP.
I have a doctor and a nurse in my extended family that deal with Kaiser on a daily basis and I've heard horror stories that would make a battle hardened marine cringe. One that immediately comes to mind was a patient that literally died while waiting for some kind of approval (it's been a while since I've visited) from Kaiser for a kidney transplant.
That's probably a valid point. Media loves a little guy against huge industry story.
> in several cases, needles detached and were left “stuck in the arms of patients.”
More data needed to make any assessment. We need to compare failure rates of the retractable device with existing devices. We also need to adjust for the skill level of the people using the devices. There's probably an adjustment needed for the patients too.
Either way, it is not a direct argument with the statement.
The facts are that we don't have enough facts, we have an unsubstantiated accusation that should be treated as such.
It's not about being ethical. It's about exposing yourself to liability.
I said we don't have enough evidence to make meaningful claims, which I still hold to be true.
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!
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)