Why Does Medical Equipment Cost So Much?

medical equipment

Medical equipment cost:

The Government Accountability Office (GAO) found that another important reason for the high costs of certain medical devices is the lack of transparency. So if everyone is looking for a profit in the middle, the cost of medical devices can skyrocket. ECRI Institute learner concludes this session by discussing pricing practices and market practices for medical devices. Wynn believes that well-defined products, such as durable medical devices, are the best candidates for competitive offers.

For equipment cost, although Medicare has used managed fee plans to control these overcharges, Hörger argues that these schedules may not respond to common market forces such as supply and demand, entry and exit, and technological change. These policymakers may find that the United States spends far more per capita on medical devices than the world’s second-largest buyer of medical devices, Japan, or the third-largest buyer, Germany (Table 5-). The size and characteristics of the medical device market are made even more complicated by the sheer number of products and the speed at which manufacturers introduce technical changes to their products. In a 2004 study of electric wheelchairs, the OIG compared the 2003 Medicare fee with the median prices offered to patients on suppliers’ websites (Figure 5-1 (Department of Health and Human Services, 2004a).

Let us take a step back to explore some of the characteristics of the medical device(equipment) market, aspects of it that work differently and therefore impact the means to reduce costs and the changing dynamics that threaten the savings that can now be achieved. An article in Health Affairs deals with the costs of cardiac stents and pacemakers, medical devices with a large ticket that absorb a large part of the costs of medical devices in the USA and the EU. And much more money goes into planning, regulating and managing medical services at the administrative level. Due to the complexity of the system and the lack of fixed prices for medical services, providers can calculate what the market will carry.

He explained that the medical profession’s voluntary data protection culture before the law was already extremely effective in limiting breaches of patient confidentiality. For example, the ECRI Institute categorizes half a million supplies purchased by hospitals into 2,278 categories in the institute’s Universal Medical Device Nomenclature System (UMDNS). Much of the increase is due to real medical advances that have been made over the past few decades. Drug pricing negotiations are mainly based on shifts in market share between competing drugs in a particular class of drugs.

This blog does not provide medical advice. It is intended for informational purposes only. Do not use it as a
substitute for professional medical advice, diagnosis, treatment, or disease prevention. Always seek the
advice of your physician or qualified healthcare providers for any questions you have regarding a medical
The views and opinions expressed on this blog are solely those of the original authors and other
contributors. These views and opinions do not necessarily represent those of Gabriel Nieves, LAC
Healthcare Solutions, LAC.us Staff, and/or any/all contributors to this blog/site.


Gabriel Nieves

After experiencing a variety of shortages, crises, and inefficiencies in the status quo of the procurement and distribution industry, I undertook the responsibility of building an interface for large organizations to abstract away uncertainty throughout their supply chain under most conditions.

We are focused on building a framework from which our teams of professionals on the ground can provide a new generation of procurement support and professional services for supply chain critical organizations around the nation.

We understand that the marketing process of critical supplies is a matter of national security and public safety. In this, we found our passion and mission: developing technologies, supplier networks, and platforms for the organizations that need it most.