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From one perspective this is true. From another perspective, he's having trouble getting long time contracts. Hospitals could give him that extra 90c per mask

• mapgrep 7y ago
  Not an extra 90 cents per mask, an extra 8 cents per mask. “His masks may cost a dime each, but a made-in-China mask might go for two cents.” A hospital charged my friend $5k for three stitches. They could pay 8 cents more per mask. But they care more about $$$ than the long term health of the country. And I’m not even making a moral statement with that. It’s the natural consequence of making health care a capitalist endeavor. There are other approaches.
  • gpm 7y ago
    > Not an extra 90 cents per mask, an extra 8 cents per mask. We're suggesting the hospital giving him 1 dollar per mask instead of 10 cents during the crisis, that's an extra 90. 98 cents compared to the Chinese prices. I guess my proposal makes it a bit less. With the 10 year contract, assuming that the demand spike only exists in the first year, it would be an extra 90 cents - savings of (9 years * 2 cents / year) = 72 cents per mask. This could be "fixed" by extending that contract for a few more years.
    • droithomme 7y ago
      I paid $4 per N95 mask in January. $1 is an absolute bargain. $0.10 is vastly below the cost of manufacture and only being promoted by people who mean harm.
      • gpm 7y ago
        The $0.10 figure comes from the article... I think these might just be surgical masks not N95 masks.
      • deleted 7y ago
        [deleted]
      • PeterStuer 7y ago
        Did you buy them at quantity (lot of 50k masks), or in a small box of 10 at the DIY store?
  • jmckib 7y ago
    If healthcare was really a capitalist endeavor then it wouldn't cost $5k for three stitches. Prices would be transparent, there would be a free market with competition, and healthcare wouldn't be linked to employment. You can thank regulations for all of those problems.
    • giantrobot 7y ago
      What regulations are those exactly?
      • gpm 7y ago
        The ones that let them not tell you how much they will charge you for a service until after they provide it, and then still demand payment (and have the government enforce that demand)? (I'm pretty sure that's not what the person you were replying to is going for - but it is a very problematic piece of the regulatory environment which is unique to hospitals)
      • BurningFrog 7y ago
        Healthcare is probably the most regulated industry in the country. Nobody knows all the regulations, and asking for a list seems a bit clueless.
        • giantrobot 7y ago
          If you're going to claim specific problems are caused by regulations is not too much to ask which specific regulations cause specific problems. What's clueless is to use the word "regulations" like it's some incantation. Healthcare is heavily regulated because medical care is not usually something you can restitute after the fact. If you sell me a defective widget my life doesn't depend on I can get my money back or sue you to get it back. If a doctor sticks a defective medical widget in my body and I die, I can't really do much about it afterwards. I'd prefer that doctor's certifications have some sort of regulatory oversight. I'd also like medical widgets to be regulated so there's stringent QA and manufacturing process qualifications.
      • 7y ago
  • jlebar 7y ago
    > A hospital charged my friend $5k for three stitches. They could pay 8 cents more per mask. But they care more about $$$ than the long term health of the country. Couldn't we say the same thing about the owner of this factory? He could gear up and then pay unemployment for laid-off workers after the crisis ends; he did it once. I am also not a fan of our health-care system, but...it's complicated.
    • hedora 7y ago
      Last time, ramping up almost bankrupted the business, and left it with an extra $1M in debt.
      • moftz 7y ago
        Seems like the government should just remove the risk of being the business of critical supplies. Obviously we didn't have enough supplies in stockpile it would benefit the US to have a dedicated factory to produce a constant stream of PPE for the next 10 years. This stuff is so cheap to make that not stockpiling it is just stupid. These kind of supplies are used by everyone everywhere that it's a waste of time and money trying to negotiate critical supply stockpiles on the local or state level. This needs to be at the national level to be able to leverage the power of the US govt. Using the DPA, the govt can come into 3M or any of the other manufacturers and say "you are going to sell us 50M masks per year for the next 10 years". After a couple years, you have a healthy stockpile that can either be used in a pandemic or changed out for fresh supplies over time. It's a shame to throw out expired medical supplies but having a consistent supply chain going for years is good to make sure that there is a standard product out there that you don't need to worry about changing.
        • vl 7y ago
          FYI, 50M masks in pandemic is 1/7th of what country needs in a day.
  • readme 7y ago
    >A hospital charged my friend $5k for three stitches https://www.youtube.com/watch?v=VGDUqBLtyNM https://www.youtube.com/watch?v=VGDUqBLtyNM DIY can save money. I've used superglue for this in the past.
    • godelski 7y ago
      Please don't do this at home.
      • godelski 7y ago
        For the downvoters: SERIOUSLY DO NOT DO THIS AT HOME! Let the medical professionals put in your stitches. I seriously can't believe I have to say this.
        • jschwartzi 7y ago
          This is America. It’s much cheaper here to risk our lives than to risk bankruptcy from visiting a hospital.
          • readme 7y ago
            I have to assume the guy who says not to do this is from a country with universal healthcare.
        • dgoodell 7y ago
          I cut my index finger pretty bad, it must have been all the way through the skin as there was a big flap. It definitely needed stitches. I used superglue to hold it together until it stayed stuck on its own. I couldn’t use the finger for like a week because it was all bandaged up. Probably not as a good job as if I went to the doctor, but my finger didn’t fall off. HDHP turns you into a do-it-yourselfer. My mother had a much more serious gash when she dropped a piece of glass on her foot. This was on Croatia. We went to the ER in the city, and she got stitches fairly quickly for like $20 cash. If I would have cut my finger in Croatia, I would have gone to ER to get stitches.
  • arkades 7y ago
    Not to undermine your dramatic point[1], but: Most hospitals run at profit margins well below 10%. Median operating margins are in the vicinity of 2% (https://www.modernhealthcare.com/providers/operating-margins-stabilize-not-profit-hospitals-still-vulnerable https://www.modernhealthcare.com/providers/operating-margins...) And for the last few years, expenses have been growing faster than revenues (though the rate of growth of expenses has slowed.) Whatever you imagine they're bringing in, they're not. Nor is their job to maintain the long-term health of the country. That's literally the government's job. [1] Those numbers have a historical reason behind them, which people are either ignorant of or choose to ignore. The short version is: hospital prices are set as a part of the negotiations with insurers. Insurers account for the vast, vast majority of dollars going into hospitals, so their business operations are built completely and entirely around insurance dollars. Uninsured patients register as barely more than a rounding error. So while, yes, being uninsured in this context sucks, hospitals aren't gleefully rubbing their hands and going "muahaha, $5K for stitches!" They don't expect to see that 5K, they don't rely on that 5K, and they're not trying to gouge that uninsured person who's almost certainly not good for that 5K. That person has just fallen into the crack(s) in our healthcare system, which are more complicated than "evil greedy hospital", or "evil greedy insurer."
    • pdonis 7y ago
      > Nor is their job to maintain the long-term health of the country. That's literally the government's job. No, it isn't. It's everybody's job. The government is a tool we use to delegate certain aspects of that job--and often it's a very bad tool to use and we should be relying on it less, not more. The idea that "it's the government's job" to do things causes all kinds of problems, because people think they can just let the government take care of it and not have to worry about it any more. You can't do that. Ultimately it is we, the people, who are responsible.
      • chimprich 7y ago
        > Ultimately it is we, the people, who are responsible. What a bizarre position. This distributed approach to the emergency health of nations hasn't worked out well in the current situation. I can't see how it would suddenly start working better in the future under our current economic system either. Everything is set up under economic pressures such that inefficiencies are ruthlessly exposed and eliminated. This maybe works out OK for creating new generations of electronic gizmos but it is catastrophically fragile for things like PPE as described in the article. To avoid something like this in the future, the only options I can see are more government control or rethink how economic systems work.
• mrosett 7y ago
  Note that getting hospitals to agree to long term contracts at prices that are higher than they'd normally pay is basically a backdoor form of raising prices. From a financial perspective, there's not a huge difference between a) a hospital paying $0.80/mask for the next year and $0.02/mask for the following decade or b) $0.10/mask with a decade long contract.
  • lugged 7y ago
    If you can make masks for 10c its not price gouging to sell it at a normal markup from those costs. Its not even "basically a backdoor form of raising prices" It's literally just what it costs. Also, I highly doubt this guy is using 10 year contracts. If I was him I would only be selling to those hospitals that sign 100 year contracts with strict non compete clauses and defined rules around sourcing / pricing and failures to comply.
    • djyaz1200 7y ago
      Totally agree, he should accept orders from any org willing to sign a long term deal at his usual prices and run the factory 24/7.
    • londons_explore 7y ago
      Most companies go bankrupt in a lot less than 100 years... In most cases, the full value of the contract would never be paid.
      • Sabinus 7y ago
        It would still solve the problem of companies not purchasing while they're solvent but not urgently needing masks.
    • rch 7y ago
      > 100 year contracts with strict non compete clauses and defined rules around sourcing / pricing and failures to comply. Exactly. IIRC Sysco negotiates 50-99 year contracts with e.g. universities to supply on campus dining. It seems that firms in the healthcare supply chain would do the same.
• arkades 7y ago
  > It seems that the actual problem might just be hospitals being stingy. Hospitals have to stay afloat just like everyone else. If they go bankrupt, they close, just like everyone else. If the government agrees it's a national security matter for us to have our own PPE production pipeline, then it needs to stop in. It can't expect private facilities, that have to make their own budget targets, to take on the cost of keeping up national priorities. That's literally what the government is for.
  • fermienrico 7y ago
    The Republican party's narrative is that the private market will "figure itself out". Furthermore, the party does not condone excessive government intervention. That's a double whammy.
    • saber6 7y ago
      > Furthermore, the party does not condone excessive government intervention. This sentiment is dated and suspect. Reference: The stimulus/relief bill just passed. Remember the bottom line that everyone in power likes to be in power. Gotta keep the music going.
    • mikemotherwell 7y ago
      So you think this policy was in place starting with Trump? Or was it with a Bush, but Obama chose NOT to repeal it? Or has it all started with Republican governors very recently? This partisanship seems crazy to me, especially given that the bureaucratic system seems plain broken. Not broken based on Republican or Democratic ideology, just plain broken. I'm not American, and it doesn't seem like in my country Australia these supply issues have been as bad, despite almost all of our supply coming from China.
      • presumably 7y ago
        Clinton: https://en.wikipedia.org/wiki/Strategic_National_Stockpile https://en.wikipedia.org/wiki/Strategic_National_Stockpile Republican ideology is abhorrent; one doesn’t have to be part of the Democratic Party to recognize that. https://www.theatlantic.com/ideas/archive/2020/03/conservative-campaign-security/608986/ https://www.theatlantic.com/ideas/archive/2020/03/conservati...
• richajak 7y ago
  not sure about giving him $1 per surgical mask is a right thing to do. The big component is the material, which need to be refined and coated. The material needs to be processed with expensive machine. According to article from NPR, even manufacturers in China depends on this German machinary supplier. It looks like the difference between 2c masks and 10c masks from his company is due to either business efficiency or labor cost. To pay 10c or 20c per mask to his company looks reasonable if he bought machine from Germany and made end-to-end production from raw material. However it does not seem reasonable to pay $1 if he simply buys ready-to-use materials, cut, and package. As for long term contract, the argument is ok up to certain extend. The cost of machine is quite high, several $m, it is a fixed cost, but negligible with high production volume - not that high to justify 10y contract. https://www.npr.org/sections/goatsandsoda/2020/03/16/814929294/covid-19-has-caused-a-shortage-of-face-masks-but-theyre-surprisingly-hard-to-mak https://www.npr.org/sections/goatsandsoda/2020/03/16/8149292...