How the medical supply industry blocks device startups from selling to hospitals • Hacker News Board

Re: How the medical supply industry blocks device startups from selling to hospitals

#101

Post by Tycho » Wed, Apr 25, 2012, 9:13 PM UTC

anigbrowl wrote: post #90

robomartin wrote: post #71

Earlier quoted context omitted.

Nope. Read it again. Government rules is what changed the nature of these GPO's from hospital-funded to being funded by kickbacks from the various vendors. That one act alone seems to have triggered a massive shift in power. 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 m…

'Nope' is not an argument. Government rules previously forbid kickbacks, a common commercial practice. the rules were changed to remove this restriction. If legislators are corrupt for changing the rules, who is corrupting them? why should they skate? This was clearly a reduction in government interference in the marketplace, and what we've got instead is a situation where the dominant market player uses its commerci…

Government interference isn't a homogenous force that is amplified or reduced. While one particular rule or restriction may have been removed, the end result can still be an even more distorted marketplace (eg. because one side is disproportionately favoured), depending on the nature of the remaining rules.

Re: How the medical supply industry blocks device startups from selling to hospitals

#102

Post by luser001 » Wed, Apr 25, 2012, 9:14 PM UTC

robomartin wrote: post #85

luser001 wrote: post #78

Earlier quoted context omitted.

What you generically call "government meddling", I call (more precisely, imho) "corporation-funded, lobbyist-enabled legislative corruption".

What you generically call "government meddling", I call (more precisely, imho) "corporation-funded, lobbyist-enabled legislative corruption". 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…

You keep repeating the same thing (politicians are the the causing entities, corps. are the reacting entities) even in response to a challenge to rethink that assumption. That doesn't mean it's true.

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).

Re: How the medical supply industry blocks device startups from selling to hospitals

#103

Post by eaurouge » Wed, Apr 25, 2012, 9:15 PM UTC

paul wrote: post #67

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 a…

No, the reason many entrepreneurs are building social networks is because many of those entrepreneurs don't have the technical chops to cure cancer or to solve more difficult problems. Solving difficult problems often requires either deep domain knowledge or solid technical expertise in areas more challenging than web/phone app development. There's a much higher barrier to entry.

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.

Re: How the medical supply industry blocks device startups from selling to hospitals

#104

Post by DanBC » Wed, Apr 25, 2012, 9:27 PM UTC

kijin wrote: post #63

excuse-me wrote: post #23

Earlier quoted context omitted.

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.

> 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,…

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.

Re: How the medical supply industry blocks device startups from selling to hospitals

#105

Post by anigbrowl » Wed, Apr 25, 2012, 9:40 PM UTC

Tycho wrote: post #101

anigbrowl wrote: post #90

Earlier quoted context omitted.

'Nope' is not an argument. Government rules previously forbid kickbacks, a common commercial practice. the rules were changed to remove this restriction. If legislators are corrupt for changing the rules, who is corrupting them? why should they skate? This was clearly a reduction in government interference in the marketplace, and what we've got instead is a situation where the dominant market player uses its commerci…

Government interference isn't a homogenous force that is amplified or reduced. While one particular rule or restriction may have been removed, the end result can still be an even more distorted marketplace (eg. because one side is disproportionately favoured), depending on the nature of the remaining rules.

It's not like marketplace actors are devoid of agency.

Re: How the medical supply industry blocks device startups from selling to hospitals

#106

Post by lotharbot » Wed, Apr 25, 2012, 9:50 PM UTC

Aloisius wrote: post #75

anigbrowl wrote: post #68

Earlier quoted context omitted.

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?

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.

It's not just a matter of "how much" regulation, but which regulations.

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.)

Re: How the medical supply industry blocks device startups from selling to hospitals

#107

Post by pjscott » Wed, Apr 25, 2012, 9:53 PM UTC

smokeyj wrote: post #89

paul wrote: post #67

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 a…

So is regulation the answer or the cause?

It's easy to get into murky arguments about this, but I think it's safe to say that regulation can, and often does, prevent market competition from solving problems like this.

Re: How the medical supply industry blocks device startups from selling to hospitals

#108

Post by cynicalkane » Wed, Apr 25, 2012, 9:53 PM UTC

luser001 wrote: post #78

robomartin wrote: post #76

Earlier quoted context omitted.

I disagree. Here's the relevant section: 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. (For example, in exchange for signing a contract with a given gauze m…

What you generically call "government meddling", I call (more precisely, imho) "corporation-funded, lobbyist-enabled legislative corruption".

What you generically call "government meddling", I call (more precisely, imho) "corporation-funded, lobbyist-enabled legislative corruption".

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.

Re: How the medical supply industry blocks device startups from selling to hospitals

#109

Post by specialist » Wed, Apr 25, 2012, 10:04 PM UTC

Aloisius wrote: post #75

anigbrowl wrote: post #68

Earlier quoted context omitted.

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?

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.

Quantity AND quality.

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.

Re: How the medical supply industry blocks device startups from selling to hospitals

#110

Post by dr_ » Wed, Apr 25, 2012, 10:17 PM UTC

kposehn wrote: post #16

dr_ wrote: post #13

"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, esp…

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?

yup.