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In the US, many states require hospitals to file a "Certificate of Need" before they're allowed to buy a new MRI (or operate a helicopter ambulance service, etc

by chiph 10y ago

In the US, many states require hospitals to file a "Certificate of Need" before they're allowed to buy a new MRI (or operate a helicopter ambulance service, etc). The reasoning is to prevent overlapping service and reduce costs. But really it reduces resiliency and availability -- if the lone machine in the county is down for repairs, you don't want to be transporting a patient across the state to get a scan done. Edit: Found list of states with CON laws: http://www.ncsl.org/research/health/con-certificate-of-need-state-laws.aspx http://www.ncsl.org/research/health/con-certificate-of-need-...

twoodfin 10y ago
Gross. Why would I invest R&D into building a dramatically cheaper MRI if I can't make it up on volume?
- chiph 10y ago
  You raise the price to cover the lack of sales volume and spread your fixed costs over fewer machines. I'm not saying every Walgreen's & CVS pharmacy in the country should have one, but it wouldn't be hard to imagine the "Quick-Med" places having them.
sbierwagen 10y ago
CON laws are somewhat unfortunate when applied badly, yes, but they don't seem to apply here, which describes GE marketing a MRI machine to hospitals that already have one, so that they don't have to transport patients between floors.
rsync 10y ago
Wait - you mean if I start a private hospital, funded privately, owned privately, I might not be able to buy (whatever medical doo-dads I want) for that hospital ?
- chiph 10y ago
  You might not even be able to open an emergency department or maternity ward if there is one "close enough" according to the state regulators.
  - paulddraper 10y ago
    So the solution to high medical costs is limiting the supply? I guess if it works for rent, it'll work for medicine. </s>
    - chiph 10y ago
      Ironically, the states without CON laws help those that do have them, by allowing increased sales and thus lowering the unit costs.

by chiph 10y ago

twoodfin 10y ago

Gross. Why would I invest R&D into building a dramatically cheaper MRI if I can't make it up on volume?

chiph 10y ago
You raise the price to cover the lack of sales volume and spread your fixed costs over fewer machines. I'm not saying every Walgreen's & CVS pharmacy in the country should have one, but it wouldn't be hard to imagine the "Quick-Med" places having them.

sbierwagen 10y ago

CON laws are somewhat unfortunate when applied badly, yes, but they don't seem to apply here, which describes GE marketing a MRI machine to hospitals that already have one, so that they don't have to transport patients between floors.

rsync 10y ago

Wait - you mean if I start a private hospital, funded privately, owned privately, I might not be able to buy (whatever medical doo-dads I want) for that hospital ?

chiph 10y ago
You might not even be able to open an emergency department or maternity ward if there is one "close enough" according to the state regulators.
- paulddraper 10y ago
  So the solution to high medical costs is limiting the supply? I guess if it works for rent, it'll work for medicine. </s>
  - chiph 10y ago
    Ironically, the states without CON laws help those that do have them, by allowing increased sales and thus lowering the unit costs.