Wii Balance Board Gives $18,000 Medical Device a Run For Its Money

Gizmodo highlights a very cool repurposing effort for the Wii's Balance Board accessory. Rather than the specialized force platforms used to quantify patients' ability to balance after a trauma like stroke, doctors at the University of Melbourne thought that a Balance Board might serve as well. Says the article: "When doctors disassembled the board, they found the accelerometers and strain gauges to be of 'excellent' quality. 'I was shocked given the price: it was an extremely impressive strain gauge set-up.'" Games controllers you'd expect to be durable and at least fairly accurate; what's surprising is just how much comparable, purpose-built devices cost. In this case, the Balance Board (just under $100) was compared favorably with a test platform that costs just a shade less than $18,000.

Comments

"Not for ________ use"

[LostCluster]

What determines the price of a scale is not just its equipment or accuracy.. but also the insurance the manufacturer has to carry in case something goes wrong. That's why medical devices are more expensive... you're also paying for the liability of somebody being misdiagnosed by a technical malfunction. Highly unlikely, but the money that has to be paid when that happens and gets proven is huge.

Re:"Not for ________ use"

[Anonymous Coward]

What determinds the price is production, and demand. The wiimote is mass produced, which makes the price even less. And its in high demand.
Medical equipment? There is a certain number of hospitals involved ordering X amount of copies, and the demand is static. They will also pay for it. Basically its overpriced, but the question is how much its overpriced.

Re:"Not for ________ use"

[Anonymous Coward]

Actually, you're forgetting the "there's only 2 companies on the planet that build this particular specialist piece of equipment so we're going to charge you through the nose for it" surcharge. Let's face it, medical appliances are outrageously expensive because they can get away with it, not because they actually "cost" that much.

Re:"Not for ________ use"

[MightyMartian]

What determined the price was the word "medical". It's a word, like "marine" which denotes adding zeros to the price of an item that costs only a moderate amount to actually manufacture.

Re:"Not for ________ use"

[Jhon]

Another question to ask is exactly how much time/effort/money Nintendo went through to get this controller FDA approved. What? It's not FDA approved?

Re:"Not for ________ use"

[LostCluster]

Tell Washington, DC about that. If companies are charging a monopoly rent, they should be regulated.

Re:"Not for ________ use"

[Hadlock]

exactly. the FDA requires significant documentation of the hardware and software along all lines of the R&D, and manufacturing process. which are actively audited by the FDA. documentation, and documentation compliance is a huge chunk (not the largest, but definitely a line item on their accounting paperwork) of their budget.

Re:"Not for ________ use"

[LostCluster]

Yep. The word "medical" means lots of requirements for the device on it's way to being used... Nintendo gets around those by saying they're not selling a medical device.

Re:"Not for ________ use"

[mikael]

It used to be the same with "unix" hardware in the 1980's/1990's, particularly with commodity components like mice, printer and scanner cables. An RS232 cable for an Apple Mac or PC clone that cost around $20, would be marked up for $200 for a UNIX workstation. To make sure that only the official cable was used, there would be loop-back configurations built into unused pins at each end of the cable, so that a connector patched up from twenty-five core cable and a couple of RS232 snap connectors wouldn't work.

Re:"Not for ________ use"

[ThogScully]

Those companies are only abusing their monopoly if someone new comes in and is pressured out of the market by anti-competitive tactics. If no one else wants to take advantage of the opportunity to compete in a market, you're looking for a different reason why. Off the top of my head, perhaps there's too much government regulation making it too difficult to get into that field. Too much insurance costs because of liability concerns in an overly litigious society. Perhaps just no one realized how much of an opportunity there was here because no one really has a clue how much healthcare costs these days since no one using it looks at the bills anymore - they just have their insurance cover it and complain when there's a problem. How do you expect competition in a market to lower prices when the consumer doesn't decide what features to invest in and compare based on price?

In other words, the answer you're looking for is not "more government" - that is the problem.
-N

Re:"Not for ________ use"

[vlm]

What determines the price of a scale is not just its equipment or accuracy.. but also the insurance the manufacturer has to carry in case something goes wrong. That's why medical devices are more expensive...

You're missing a couple other issues:

1) Provably sterile out of the box. If the patient has an open foot ulcer, and some Chinese dude sneezed on the board before he wrapped it up, and then the patient dies of infection...

2) Bodily fluid proof, if not disposable or autoclave-able. The board is too expensive to toss and too weak to autoclave, furthermore god only knows what it'll do electrically when a patient pees on it. Or if not pee, some highly conductive cleaning fluid. Or blood.

3) Intrinsically safe. In the unlikely event of using or storing the board in an atmosphere contaminated by flammable anesthetics, it won't blow up. Closely related to oxygen proof plastics. No great achievement to make a plastic that does not support combustion in plain ole air, but I have no idea what plastics (if any) will not continue to burn in pure oxygen. And you know some heart patient is going to drop their oxy mask on the wii board and the batteries will spark at the same time. Also if the patient collapses and you need to use the crash cart, you don't want the electronics inside to catch fire. Would be unfortunate to restart a patients heart only to have the patient die of infected burns.

4) Proven EMC/EMI compatibility. Last thing you want is for the board to interfere with the patients portable EKG machine or whatever.

5) There are all kinds of allergen related issues. For example, no latex (rubber bands) used internally for any part at any time during construction. Peanut oil sounds like a "green" lubricant for metal machining, etc, until you run into someone with an allergy.

6) Connected. It needs to be sold by the current collection of booth-babe saleswomen with open purchase order accounts at the hospital. Its possible the hospital has no pre-existing relationship with any place that sells wii balance boards... Literally no way for purchasing to buy one...

7) Software licensing which probably prohibits this kind of activity, along with controlling nuclear power plants and air traffic control. "Lean forward to lower the control rods, lean back to raise the control rods. Lean left and right to control primary circulation pumps. Walk in place as if running away to declare a SCRAM."

Theres a bunch of other "EE" related medical device rules that are pretty interesting, especially as regards AC power supplies, until it gets too creepy realizing a bunch of folks died before they figured the rules out.

Its not so hard to follow the rules, its just HARDER to prove someone in China followed the rules...

Re:"Not for ________ use"

[obarthelemy]

depends:
- some costs are fixed: design, overheads
- some costs are linearly progressive: materials, though may be degressive w/ volume discounts
- some costs are degressive : marketing, certification and legal (if applicable), maintenance infrastructure (if any)...

so as a general rules, the more you sell, the cheaper it is to make. The exceptions are capacity constraints, either materials or manufacturing capacity.

now, price != cost, and prices may rise even though your costs fall:
- limited market: no point cutting prices if you end up selling as much, not more, as with higher prices
- capacity constraints: if you can't make more, even though your costs are going down, there's no point
- unelastic demand: if demand does not react to price changes, no point to lowering prices
- luxury market: it has been proven that demand for some items actually falls when prices fall, because people are buying an image of exclusivity, quality... rather than a product.

Re:"Not for ________ use"

[DJRumpy]

There is no justification for an $18,000 price difference for what amounts to the same fundamental technology. I don't need a formula, or theories as to why this is. The medical industry is full of a bunch of crooked greedy bastards. They use the same basic technology to accomplish the same result, probably with the very same components, all of which can obviously be had for very cheap. Costs are applied at the component level. If you can buy the same components for a Wii as in this other piece of equipment, their prices should be a bit closer. Our medical system has been gamed so badly for so many years, that a hospital doesn't even blink when they see $18,000 for a piece of equipment. They will happily pass the costs on to the patient, and the patients health insurance.

If this isn't a case of price fixing then I don't know what is.

What we really need is transparency is pricing for all medical costs. Force manufacturer's to provide their component costs for everything like eqiupment, drugs, and consumables, so that the consumer can see exactly what kind of markup their paying for.

Re:"Not for ________ use"

[Anonymous Coward]

Not really. I think what's happening with consumer gear becoming more and more complex and "agile" is that the whole concept of expensive custom hardware is becoming obsolete.

While some devices (MRIs, x-rays machines, ultrasound imagers) are legitimately expensive, other gear, such as the one in the article, are being revealed to be extremely simple devices that are simple marked up due to the OEM knowing that their target market has deep pockets.

In some ways, it's analogous to the software movement in the late 80s where software engineers and their tools were in such shortage that they were only found in high budget corporate and government settings. The commodification of computers led to computer programmers becoming commonplace, allowing the development of cheap software development on consumer grade computers and paving the way for the open source movement where programmers' time is in such supply that they can afford to give it away for free(tm).

The mass production and wide availability of advanced components such as accelerometers, GPS chips, DSPs and other previously prohibitively expensive items are bringing highly sophisticated applications into the realms of the consumer where novel ideas are being explored and old expensive ideas are being redone with a Made In China label on them.

Finally, I could maybe buy the insurance line if we were talking perhaps even a few multiples, but a $100 device to $18k? That's one hell of an insurance policy.

Re:"Not for ________ use"

[LostCluster]

That's a theory that's debated in college, and I take the opposite side. Proof that somebody was hurt shouldn't be needed to prove monopoly abuse. What about the company that was never founded because somebody told the would-be founder that it wasn't worth doing? If nobody's willing to extend you credit because the monopoly exists, then that's a barrier to entry.

Re:"Not for ________ use"

[snowgirl]

What determines the price of a scale is not just its equipment or accuracy.. but also the insurance the manufacturer has to carry in case something goes wrong. That's why medical devices are more expensive... you're also paying for the liability of somebody being misdiagnosed by a technical malfunction. Highly unlikely, but the money that has to be paid when that happens and gets proven is huge.

There's a lot of stuff that goes into a device to "certify it for blah blah use". Like you said, liability insurance. There's also a lot more stuff. Like the fact that doctors can expect to recoup greater amounts of the price of the unit than a gamer is likely to.

Take the same device, everything the exact same. Sell it to people who are paying out of pocket, and sell it to people who have insurance to cover it, and the people who are paying out of pocket are going to spend a lot more time assessing the value of the device, and if they need it. Thus, the economic model for them requires pushing affordability to ensure that the out-of-pocket person will actually pay.

This is equally visible in the medical fields actually. Cosmetic breast augmentation costs about $8,000 in my area, while just an x-ray and CT-scan at an ER is about $5,000. Compare that. Full general anesthesia, operating room, surgical expertise, and recovery costs as much as two tests with medical equipment, and comparatively little expertise. Why such a little price difference between the two, considering the vast gap in service? The cosmetic surgeon has to get patients to pay out-of-pocket... thus, the cost has to be something someone can generally afford, or they would never get business.

The important thing to remember here is that the people building these medical devices, by free market factors are charging as much as they can get away with charging. If medical facilities pay $18,000 for these items, then that is what they're going to charge, regardless of the costs put into it.

Re:"Not for ________ use"

[mysidia]

Let's just say for the sake of argument the Wii balance board, and the medical device both cost $10 million to research and design.

Ignoring the additional compliance, insurance, and qualification a medical device VS a toy has to go through to be produced.

Let's just say nintendo or their insurer was really concerned about safety, and perfect operation of the debe no complaints.

Further, let's say once all the preliminary work was done, the Wii board cost $75 per unit in materials and labor to manufacturer, and the medical force board cost exactly the same $75.

If Nintendo sells 5 million BBs to retailers at the price of $85 per unit, their net revnue is: ($85 - $75) * 5E6 - $10 mil = $40 million dollars revenue from the sale of BBs,

The sales proceeds were: $425 million dollars.
Their cost of sales were: $75 * 5E6 + $10 million = $385 million dollars.
$425 - $375 = $40 million

A very slim profit margin of 10%, but still not bad. Usually game consoles / accessories are sold at a loss anyways, the money is in the software, which can be updated at much lower cost.

Now... as for the medical device... we know there won't be demand for $5 million. Let's be conservative, and say the medical device manufacturer's market research tells them they can expect to sell 1,000,000 units, it is an innovative device at all, and there are thousands of hospitals all over the country.. What should the price be?

If they make it $85 bucks, even... their revenue will be:

($85 - $75) * 1million - $10 mil = $0

What? They spent $10 million to develop this, they sold 1 million units, and no revenue to show for it? Just taxable business operations? (By the time other costs are considered, this is actually a net loss of money)

Here's why: Sales proceeds: $85 * 1 million = $85 million in sales
Cost of sales: ( $75 * 1 million + 10 million = $85 million )

$85 - $75 = $0

So they have two options... go after a larger market that will buy more units, or raise the price.

Their product is only of interest to hospitals really, so the only option is to raise the price.

How much does the price need to be for there to be a 10% profit?

Sales proceeds need to be: $93.5 million.

That means, the price for each unit needs to be: $93.50 per unit.

What if they want a healthier profit margin? Their sole purpose in life is to manufacture medical devices, they don't sell software -- they need a good profit margin from selling their product.

A fair profit margin is 100% or more.

To achieve that, the minimum price is $930.50 per unit.

At a higher price, two things will happen (1) they will sell fewer units, and (2) their support costs per unit will be higher -- better warranty and service will be expected.

Also, 1 million sales is unrealistic for a niche product, it will probably be more like 200,000 sales.

To maintain a healthy product with 1/20 of 1 million, the actual price needed will be 20x that, or $18,610.00

Holy smokes.. that's awfully close to the '$18,000 medical device' price.

I wasn't planning on that, it was really a coincidence, honest..

I'm sure insurance is a consideration, but I think it pales into comparison to the small sales volume, and the high initial costs to design and manufacture any electronics good.

Re:"Not for ________ use"

[LtGordon]

To make sure that only the official cable was used, there would be loop-back configurations built into unused pins at each end of the cable, so that a connector patched up from twenty-five core cable and a couple of RS232 snap connectors wouldn't work.

Kind of like how Apple charges $35 for an iPod USB wall charger, and makes sure that my generic USB wall chargers / powered USB hub won't work.

Re:"Not for ________ use"

[Anonymous Coward]

You have obviously never worked in an industry with high quality control standards. The price of some product isn't the sum of its individual components. You have to pay people to design it, and people to test it, and then pay insurance on it. For small markets, this means that the price is very steep for even simple things. What would you price this device if the parts cost $100 per unit, but the R&D cost (2 doctors and 2 engineers for 1 year) was $1 million, the insurance cost was $500,000/yr, the customer support cost was $100,000/yr, and the market size was 100/yr?

Re:"Not for ________ use"

[Hadlock]

What about the software that interprets the data? The driver to connect the scale to the software? Yeah I bet you could slap together some code in python in a day or two, but it still has to be documented, and verified by the FDA. I'd rather they be too careful, and have a device they can trust, rather than look at some data, notice an anomaly, and dismiss it because "the software is buggy", when in fact it might be significant in that you had a minor stroke and they didn't catch it due to crappy data collection. And then you die. Or are paralyzed. No, I'd rather have the correctly build, specified, and documented devices used on me, thanks. Medical care (quality, not cost/availability)in the US is top notch due to all the checks the FDA has.

Re:"Not for ________ use"

[sugarmatic]

I call BS. I have been involved in medical device development and licensing for some time. I can ballpark what the liability for a device such as this would be, and it is pretty small. The reality of the medical device industry is that it is a bubble that is largely propped up by low expectations, high regulatory barrier to entry, and other inherent consequences of our current medical device market system.

Take, for example, a glucose monitor (specifically, the most widely used system on the market in the US). The consequences of a technical failure are relatively high, including severe injury to the user. However, the insurance coverage for this type of device is barely 5% of the total retail cost of the sensor unit, and just over 8% of the retail cost of the disposable strips. The majority of the cost is from development overhead and ongoing quality assurance. The margins are still huge- fine. Here is the problem: independent testing results bear little in common with the reports filed with the FDA regarding accuracy and precision of the units. In fact, using their own test strips with calibrated samples of human plasma, the units only had a 60% confidence interval of indicating blood sugar to within within 15 points and the precision was not believable to within 20 points. Subsequent anecdotal testing by coworkers was consistent with our lab results (we were making an Iphone wart to to perform glucose management well before it seemed everyone wanted to do the same thing). One person saw blood sugar go from 70 to 110 to 87 within 10 minutes just because he tested with three different monitors with the same lot of strips. Our monitor was within a few points over 95% of the time, with about 3-point tall error bars.

The rub in this is that our device was going to sell for $12 versus $75, give superior results, and link to a wealth of online management tools. We couldn't do it because of the regulatory barriers, and even more because insurance companies would be slow to adopt a new device.

There are other examples in every doctor office. Hand/eye coordination test software that has less sophistication than PONG, or the first interactive app your kids ever wrote, yet the software costs $4200 plus annual licensing fees and docs bill it at $220 per use. This one is a doozy because I know the guy who wrote it and HE fully acknowledges this from the left seat of his sports car and life that has no other discernible source of income.

While I cannot offer a solution (that would be palatable to the majority of Americans with a shriveled connection to the inner and outer workings of their own lives), this example is not a new thing, but is is an example of something I have a great deal more respect for: innovation linked to something we quaintly used to call value.

As for the actual application, I cannot fathom that the same functionality could not be achieved for far less.

Re:"Not for ________ use"

[RobVB]

Nice post with a nice result, although you used some mystery maths to get there.

Sales proceeds need to be: $93.5 million. That means, the price for each unit needs to be: $93.50 per unit. What if they want a healthier profit margin? Their sole purpose in life is to manufacture medical devices, they don't sell software -- they need a good profit margin from selling their product. A fair profit margin is 100% or more. To achieve that, the minimum price is $930.50 per unit.

First you say 85 bucks is their break-even point, which means they have to sell it at 93.50 for a 10% profit margin (1.1 times 85). Then you somehow (almost) multiplied by 10 to get 930.50 bucks?

If 85 bucks is break-even, then they'll have a 100% profit margin selling at twice that, or 170 bucks. Not 930.50.

Also, 1 million sales is unrealistic for a niche product, it will probably be more like 200,000 sales. To maintain a healthy product with 1/20 of 1 million, the actual price needed will be 20x that, or $18,610.00

200,000 is 1/5 of 1 million. So following your line of thought, the actual price would be 5 times 170, or 850 bucks.

You did, however, say they produced 1 million of them, costing them 75 million in parts and labor. If they're only making 200,000 those costs would only be 15 million. Adding 10 million research costs to that makes a total of 25 million in production costs. To get that 100% profit margin, they'd need to earn 50 million in sales, meaning 50 million bucks/ 200,000 units = 250 bucks per unit.

Holy smokes, that's nowhere near the "$18,000 medical device" price.

Re:"Not for ________ use"

[NewbieProgrammerMan]

You have obviously never worked in an industry with high quality control standards.

I worked at a nuclear power plant that happened to be on a Navy ship. One of our supply guys had to order some simple part (a resistor or something) that was categorized as part of the nuclear plant, and it was maybe $100 through the supply system. He took the part number home, called the supplier from his home phone presenting himself as a hobbyist. It was about $1 for the same part. I guess we were paying $99 for the QC sticker they put on it before they sent it off through the supply system.

Disclaimer (because /. has taught me I need one): I'm not saying all QCed stuff is expensive for no reason. Just that sometimes people really are getting ripped off in the name of QC.

Re:"Not for ________ use"

[Opportunist]

What you fail to see, and what the GP identified successfully, is risk. Now, with average consumer equipment the risk is very close to zero. If it doesn't work, no biggie. Get the customer to return it and 2-4 weeks later he'll get a replacement. If he gets hurt in the process of using it, no biggie either. We just told him we're not responsible for any dumb accident he might run into. If that can't be excluded, the price goes up.

I hate car analogies like anyone, but in this case it's one of the things where liability is part of the price. Faulty cars can result in incredible cost, and that is reflected in the price. You get the same with dangerous work and the compensation you get for it. And illegal drugs are not really expensive due to high manufacturing costs either, or an insane demand compared to the supply (you'd be surprised how high the supply for some drugs really is...). It's the risk involved.

You can actually get medical equipment very cheaply, provided you declare that you will not use it for human use. What else you could use a heart monitor for is beyond me, but when they can strip liability from the price tag, the price goes down. Considerably down. Think 1/10th of the "all warranties included" price tag. It's probably easier to see for the everyday user with consumables. Syringes can be used for more than injecting something into a living body, thus you can get the same syringes with or without "medical" quality. Both kinds are essentially the same syringes. One kind is "certified" and thus with all liability and warranty attached, one isn't. Both are equally sterile, simply because the manufacturing process is the same, they roll off the same presses. Now compare the price.

Re:"Not for ________ use"

[JWW]

Risk makes health care expensive? I though that including malpractice reform in health care reform wouldn't really matter with respect to cost......

Note as shown very directly by this article, the cost of malpractice insurance at every level of healthcare is a major driver of the enormous cost and leaving tort reform out of the current health care "reform" was unacceptable.

Re:"Not for ________ use"

[swillden]

Moreover, even when there are multiple insurance companies, it's generally very costly for them to send people around checking out all of the different options for all of the different hospitals to determine what they'll pay for what.

The competition needs to be pushed out a level: to the patient. Patients need to have a stake in the cost of their own treatment, and they need to have the ability to easily compare prices between competing providers (hospitals/physicians). It's the decentralization of choice that makes markets work well. Centralized choice is better than no choice, but not nearly as efficient as decentralized choice.

This, in fact, is the core problem with our healthcare system, and every other, including the centralized ones. Everyone is experiencing massive cost inflation, and it's precisely because the end-customers are insulated from the cost of their own health care decisions. All patients want the most effective test/treatment available, regardless of whether it's only 10% better than another option that costs a third as much. Providers, for their part, are both morally and financially motivated to go for the better and more expensive approach. Morally because it's the best treatment for the patient and financially for obvious reasons. The only one who has any incentive to keep costs down is the insurance company. And if they're actually competing for customers, then they have a counter-incentive to keep the patient happy, which means ever-increasing costs.

A national, single-payer system as envisioned by the left just exacerbates this problem because it even further separates the patients from any concern about the costs of their care. It must, therefore, replace patient-driven cost-control with centrally-managed cost control, a.k.a. rationing. But that runs into the same problem the insurance companies have with their cost-control efforts: It makes the customer mad. In the case of a private insurer, that anger may lead to lost business. In the case of a nationalized system it's even worse, because it leads to votes to "expand and improve" healthcare... and we'll figure out how to pay for it later.

What we need is to get patients back in the loop. High-deductible health insurance so that routine expenses are paid out of pocket should be the norm, not the exception. For more expensive treatment, the patient should still have to pay a portion, though obviously it has to decline fairly quickly as costs rise.

When patients routinely ask the doctor "Okay, what will that cost?", then we'll start to see some significant downward pressure that begins to at least contain the growth of health care spending, and perhaps even starts to reduce costs.

How to reconcile that with the desire to make health care more widely accessible is a challenge, but not an insuperable one. But that's for another post.

Re:"Not for ________ use"

[Civil_Disobedient]

I believe you are confusing the words "price" and "cost." It would be laughable to suggest the cost of such an item was anywhere near $18,000.

But the price of something has very little to do with its cost. The price of something--anything--is very quickly and easily determined using the following formula:

Whatever someone will pay.

If someone wants to have their wallet fleeced to the tune of ~$17,500, I sure as hell wouldn't try to stop them.

Re:"Not for ________ use"

[tftp]

But I'm suggesting that "good enough" may very well be good enough.

It depends on what you are measuring. A scale is indeed measuring only one parameter, but a balance board can easily measure several. You need syncronized access to all sensors to recreate your movements on the board, you can't just poll them one at a time.

If we're talking about a scale, do we really need to spend $10,000 for FDA testing and approval? It measures weight... Can't you pretty much verify that with another scale or two?

Doctors who treat people with excessive weight need to know the exact numbers, especially as the readings are taken mid-course. They tell the doctor how effective the drugs and methods are. Half a pound is probably an unacceptable and unjustifiable error. And you can't use "another scale or two" because they can be also wrong. Here is something to read about it. A proper multi-device setup would be great, but it would cost more than one device that is accurate enough.

Also the cost of the equipment is spread among many patients who use it over years. Let's say the balance board costs $20K and it is used for 10 years and then written off. Every day one measurement is taken. $20K / 3600 days = $5 per patient. Is this something to lose sleep over?

Re:"Not for ________ use"

[BronsCon]

Sony had it in a $500 camcorder for a few months before being forced to take it off the market because people were using it to film their neighbors screwing... through their neighbor's walls...

So you'll still need to pony up a few grand for that, sorry.

Re:"Not for ________ use"

[hairyfeet]

Yeah they may give you great response time, but they totally bone you on the parts! A buddy of mine works IT for a hospital. One of their imaging machines had a HDD die, so he looks and it is a standard IDE HDD. He calls the company to see if he can just change it out, as they need that machine ASAP. "No, it'll void your warranty if you touch it! We'll send someone right over!"

Well apparently "right over = next day" and when the guy shows up he just pulls out a bog standard WD retail box and slips it in. Cost to the hospital (and of course I mean passed on tou you?)? $6000! That is right, they charged 6k for an $80 WD HDD. So if you want to know why your medical bill is so high? Well there is part of it right there. And according to him 2000%+ markups really ain't uncommon with the bunches making medical equipment. damn I wish I could get away with 2000% markup!

Re:"Not for ________ use"

[Miamicanes]

> I guess we were paying $99 for the QC sticker they put on it before they sent it off through the supply system.

Actually, there's a very good real-world example of a cheap electronic component that nevertheless can be very expensive when its quality is absolutely certified: electrolytic capacitors. Today, in 2010, brand new devices are STILL being manufactured with electrolytic capacitors that have substandard electrolyte. This is a problem that was supposed to have gone away YEARS ago. Why is it still around? Because the bad electrolyte is a tiny, tiny bit cheaper to make... and the capacitors tend to work just fine for at least a few months. In other words, they fail prematurely... but not immediately.

If you're building something that absolutely, positively, must NEVER use an electrolytic capacitor with bad electrolyte, you have no real option besides buying only capacitors that are certified (and can be audited) all the way from you (the company building the device that uses them) to the chemicals used to make the electrolyte itself. It's not enough to buy "a good brand". To get that level of certification, every party along the way -- distributor, wholesaler, supplier -- has to be certified capable of keeping them secure and properly stored. Otherwise, an employee (or manager, or higher) at the supplier could substitute counterfeit capacitors, then sell the genuine ones elsewhere.

The point is, that degree of auditing and handling is insanely expensive, because it involves SO MANY different parties (all of whom want to be reimbursed for the extra trouble). It's made more expensive by the fact that there are (fortunately) very few things that really NEED that kind of quality control. Life support equipment and nuclear power plant control systems are obvious excamples where it's justified, costs be damned.

That said, this particular device isn't life support equipment, regardless of how hard someone might try to make it sound like the tiniest malfunction would lead to death or injury. I think it's safe to say that this particular device's price is all but guaranteed to come down a few thousand dollars if they want to keep selling it.

Re:"Not for ________ use"

[LostCluster]

The threat of competition is enough to keep a natural monopoly competitive. If said company becomes too abusive, new businesses will be profitable regardless of entry barriers.

Citation needed that a natural monopoly that isn't abusive exists.

Re:"Not for ________ use"

[Skuld-Chan]

Again, you're paying for the sticker and the insurance that covers the lawsuit should that piece break and irradiate an entire shipyard.

Are you though? Because I bet if that did happen they still wouldn't assume liability.

Re:"Not for ________ use"

[rtb61]

I get it. So what you are saying is that governments would be far better off manufacturing all this stuff themselves rather than contracting it out. Not only are you eliminating wasteful profits but also enormous insurance costs because the governments can readily self insure.

Now lets have a little bit of fun with the insurance lie. If insurance costs are so high, then the private medical manufacturers must really, really crap, because that is what drives high insurance premiums, lots of failures (no failures, low premiums), so get rid of the private corporations because just like insurance companies, the government should also recognise them as being high risk. The quality control systems in all medical manufacturing facilities must be so bad, that no insurance companies give any of them a discount.

I would love to see some of the warranties on medical equipment, from the sounds of the marketing trolls it must be decades but I bet a lot of that junk comes out with nothing better than 90 days (now that's a big insurance risk, ha ha). The underlying reality is that all this low manufacturing run custom equipment should be manufactured by government, because no matter how inefficient they are, it well still be way cheaper than paying for inflated profit margins at the manufacturers, oh yeah and the insurance companies. Especially the insurance companies because according the medical manufacturing trolls, the very, very expensive quality control system means absolutely no failures.

Re:"Not for ________ use"

[lewko]

This would be more important in a nuclear reactor and not so big a deal to a hobbyist.

Depends what his hobby was. Muhahahahah....

Re:"Not for ________ use"

[Nazlfrag]

Someone could be misdiagnosed and sue is what could happen.

Re:"Not for ________ use"

[Anonymous Coward]

Production and demand are sufficient to determine price only when the market is perfect.

This is not true for medical equipment, because the market is highly regulated.

I work in the field of medical devices, so I see this every day. We have to keep copious records of the design process of the hardware, the testing to validate and demonstrate perormance, and each device has a record kept of every periodic maintenance call and every service call for a performance problem (e.g. breakdown).

All this adds to the cost to bring a product to market, and then adds to the cost of keeping a device running.

And on top of all that, the health "systems" that provide patient care in the USA are an extemely imperfect market...

I have seen many instances in the North Eastern states of extreme over-capacity. Great, in that if you need an X-Ray or an MRI you can get it done within fifteen minutes (which is three sets of paperwork to prove you can pay). But that means that a device is sitting around 80% of its time unused. But other posters will point out, "you can't put a price on your health", so people will cough up to $3200 for a simple abdominal X-Ray that takes, literally, 45 seconds of device time. The same X-Ray costs (I'm told) around $800 in Japan, and less in France or the UK. But in France and the UK, you turn up for your appointment, fill out no extra paperwork, but wait for maybe 90 to 120 minutes to go under the device, because it is utilised at 90% to 100% of the time.

Finally, even though you state that "demand is static", this is not quite true. There is relatively little growth in the number of hospital beds places in the USA,Europe and Japan, but the demand for every increasing resolution in imaging, ever faster turnaround, every simpler interfaces so that less qualified (i.e., cheaper) staff can operate the device for more qualified staff (i.e. doctors) to spend more time doing diagnoses... And that is in the mature, saturated markets of the world... then we can talk about BRICS...

AC

Re:"Not for ________ use"

[BronsCon]

I'm not talking about IR. Hell, I have a $90 vid cam that does IR imaging. The Sony cam had a thermal imaging mode and yes, if aimed at a window, it would fail; but if aimed at a poorly insulated wall, you could make out the outlines of your neighbors.

People were worried about being recorded doin' the naughty, when it was easily foiled by properly insulating your walls. Not to mention that the quality was... well... quality isn't the right word for the image it would give through even the thinnest of drywall, let alone studs and siding...

Re:"Not for ________ use"

[Fjandr]

Well, specifically in regards to the military, this is not true. Since you cannot, generally, sue the US government because of sovereign immunity, they don't care about insurance to cover failure. All those components they buy, with few exceptions, don't come with additional guarantees unavailable through standard retail or wholesale channels. The price is because of vendor contract lock-in in this case.

Re:"Not for ________ use"

[germansausage]

Here's another example. Back a long time ago (late 70s) when I was at university we had a professor doing "Aids for the Blind". He was working on a computer system that could synthesize human speech. He had about $50,000 of DEC minicomputers plus another $20,000 of hand-built D-A converter boards in the lab, and was able to successfully read individual words from text files and convert them to almost recognizable speech. That summer TI released the Speak and Spell, which did better speech synthesis for $29.

Re:"Not for ________ use"

[LostCluster]

And people are telling me elsewhere that tort reform and health care are not the same thing. I disagree with that. If hospitals were allowed to post a sign saying "We'll do our best to help you, but if we fail or make it worse we're not responsible." then health care would cost a whole lot less.

Re:"Not for ________ use"

[Xeno man]

This makes absolutely no sense. People with insurance, high deductible or not, generally do not question the costs of remaining in good health. They sign consent forms for procedures and deal with the bills after the fact. This is why bankruptcy rates from health care bills are so high. The people who do not seek treatment based on costs are almost exclusively the uninsured. If the internal link to your argument is seriously that patient will start haggling with the people responsible for keeping them alive, you might want to rethink your position.

People don't question the costs because they are not paying it. The insurance usually does. It's all the insurance plans that drive prices up. If you got full coverage, what do you care what the doctors charge and how much drugs are. If you actually look at what is available you will find that doctors are prescribing drugs that are $50 a pill when there are generic brands that are the same thing for $5 a pill. The thing is no one is asking why the price difference because the default attitude is "Insurance is paying for it", doctors and patients alike.

Re:"Not for ________ use"

[JWSmythe]

    There are different levels of IR.

    The IR that most people are familiar with is just below the visible spectrum, which lets stuff like the Sony camera shoot in the dark, with an IR emitter. Basically, a light that it can see by.

    Thermal imaging IR is "long IR", which shows heat. Anyone above 0 degrees kelvin puts off light at very low frequencies that we can't see. And no, there's no such animal as a $500 thermal imaging camera. You're looking at a starting price of about $3K. If Sony, or anyone else, were to produce a camera that retails at $500, they'd definitely do it. It's not a privacy concern that keeps the price high, it's the simple fact that the components are still very expensive.

    Seeing through walls is pure scifi. You'd see the temperature of the wall. You may (just may) see something through a wall, if it's hot or cold enough to change the temperature of the wall. Like, you could see the general shape of a fire through a wall, because it's heating the wall. In scifi it works through "suspension of reality". You believe what you're shown, because it's necessary to the plot. Some people don't understand an impossible technology used in a movie, so they assume that it's real.

    You'd be able to see through a glass window though, assuming nothing pesky like blinds are in the way. So, a couple having sex in a dark room, seen through an open window, is perfectly possible. Either IR would work, but that isn't quite what was suggested.

Re:"Not for ________ use"

[timonak]

I can honestly tell you that you have no idea of what you are speaking. I work for a small medical device manufacture as a software architect/engineer. There are many reasons why a medical device is expensive. I'll enumerate the two that I have experience with. The first, and biggest is the FDA. We are a class 2 medical device, much like the piece of equipment mentioned in the article. So what does this mean? It means reams and reams of paperwork. Not nearly as much paperwork his required for a class 2 as a class 3 (pace maker and other implantable devices) device, but still reams of paper. We sent almost a WHOLE box of paper to the FDA when we submitted our paperwork. If I had to add up the cost to produce the paperwork, given the cost of lawyers, and staff time, my guess would be >$250k. Thats just the initial cost. We now have to get ready for an FDA compliance audit in the next few months. We have also have to overhaul how we develop the software. We have to be able to trace every line of code back to reams of paperwork, that adds an additional burden to the bottom line. Next are lawyers. We spent a TON of money on lawyers while doing our FDA 510K. Competent lawyers who are also knowledgable about the FDA 510K process are NOT cheap. ONE of the lawyers we used cost $600/hr. You also have to remember that the medical market is quiet limited. How is a small medical device company supposed to survive if they sell the device for a couple of hundred dollars into a very limited market? When you see our product, you might be tempted to think $5000? I'm not paying that much for a metal frame, a hardened PC w/ a touch screen and some software. Its not worth that much. And when you do, I want you to tell that to me personally, to my face. I also want you to tell me that my family doesn't deserve to eat.

Re:"Not for ________ use"

[Tekfactory]

The guy Parent was arguing with was probably thinking of this link, scroll down to "See through clothing"

http://www.kenrockwell.com/tech/ir.htm

The link specifically states what the camera sees through is cotton, at the time this camera was released I believe swimsuits got all the attention.

Re:"Not for ________ use"

[Boronx]

Demand curves probably look like this:

Demand for a medical balance board @ $18000, maybe 1000

Demand for a wii fit @ $18,000 maybe 100

Demand for a medical balance board @ $100, maybe 10,000

Demand for a wii fit @ $100, maybe 10,000,000

Engineering cost for both, probably $1,000,000

Re:"Not for ________ use"

[that this is not und]

I did what you're doing for a living awhile back.

The 510K is an absolute joke. What you're doing when you claim a 510K exemption, is you're claiming your new medical device is 'substantially equivalent' to a device already approved. Saves you the astronomical cost of Clinical Trials. So you have your Regulatory Staff out working on that. Meanwhile your Marketing Staff is working double time to convince the customers that your produce is a new, exciting, innovative product.

Re:"Not for ________ use"

[wvmarle]

We're talking about a diagnostic device. Not a life saving device. Not even for internal use. It is quantifying balance: we know the patient has balance, we just want to know how much of it. It is not even diagnosing whether a patient has a disease or not, or what disease a patient has.

If it is faulty, the doctors will know. Either it doesn't work, or the values do not make sense. A doctor with a little bit of experience will know from looking at the test about where the number should end up, and if out of expectations can take another device to test again. They're cheap, so you can have more than one on hand.

Sterility is not even an issue here (beyond basic cleanliness of course), it is not for use in an OR.

The main reason these things are/were so expensive I think is because of the very small product runs. Really small: hundreds, maybe a few thousand. There was no other use for these sensors, so development cost has to be shared over a few thousand pieces at most. Come the Wii with its gadges using basically the same tech, and both production cost and development cost per unit drop enormously. It matters a lot if you share costs between 1000 or 100,000 units.

Then probably the medical version is much stronger and sturdier, lasting longer, but the price difference is too big to make up for that.

Re:"Not for ________ use"

[mpe]

And should they only be able to find a single one that isn't FDA approved and certified "for medical use", they will start their happy dance because they don't have to pay and the doc has to see how to get out of that shit.

Would this "FDA" be the "Food and Drug Administration" in the USA? When the article mentions the "University of Melbourne", the only such university I am aware of is in Victoria, Australia. Australia does healthcare very differently from the US.

Re:"Not for ________ use"

[jplopez]

If they were going to charge you 6k, why even bother about the warranty? From my point of view, if the machine was under warranty, the repair should have been free of charge.

Re:"Not for ________ use"

[Doghouse Riley]

"I also want you to tell me that my family doesn't deserve to eat."

It sounds to me as if -you- are earning your family's keep - your family deserves to eat.

However, the battalions of lawyers that get involved in the process (on your side, and on the government side) are doing nothing but adding cost to the system. They provide not one iota of patient care. Their families don't deserve to eat the fruits of this parasitism.

And I would hazard a guess that the CEO and board of your employer are more than willing to go along with all the FDA bullshit because it provides a very high barrier against the entry of competitors into the field. This is called "rent seeking" - look it up. Their families don't deserve to eat either.

Re:"Not for ________ use"

[Ihlosi]

Everything you wrote sounds like a reason to dissolve the FDA (and perhaps a chunk of the legal system) and start over.

You mean "Start over with snake oil, patent medicines, radioactive sports drinks and toothpaste, miracle healers and other kinds of quackery, plus a couple deaths due to drugs that have been tampered with, and a whole new bunch of thalidomide cripples just to be sure"?

No thanks, I'll pass.

Re:"Not for ________ use"

[eth1]

It's not the manufacturer's liability insurance that causes those high prices, it's the patients' medical insurance. The only reason they can set the price that high is because it just gets billed to the insurance. Then they inflate the MSRP even more so that they can still bilk the insurance companies even after a "discount."

When my mom was shopping for hearing aids, a particularly honest sales droid told her that the "MSRP" (which no one ever pays) was $12k for a certain model. They discounted it to $8k when they billed insurance companies, but if you didn't have insurance, they'd sell it to you for $3k. So basically they get an extra $5k profit if you happen to have insurance.

Re:"Not for ________ use"

[Opportunist]

Actually, NOT adding it would be insane.

The interesting part is that affordable healthcare saves money. When someone can actually go to a doc when he has a minor disease instead of trying to fix it himself (often by simply dumping antibiotics into his body, which can make it worse over time), he will get well again faster. Worse yet, if he decides to ignore it (because he simply cannot afford fixing a minor, non crippling problem with his body), in the long run he might end up as a cripple, unable to work anymore and relying on that social security that already costs more and more by the minute.

Our healthcare system started cutting cost by a quite interesting system: Free checkups. People can go and get a complete testing every other year (every year after you get to 50 years of age), free of charge. And they did, after all, a problem diagnosed early is a problem you can cure with less pain. And less cost. Identifying cancer early often makes it curable, results in a quite cheap operation and a productive member of the workforce instead of someone who gets heavy doses of expensive medication for a few years 'til his death (not to mention that he will probably not be too productive during this time). In general, they actually saved money that way.

What have we here?

[tonycheese]

Wii parts replacing 18,000 dollar medical equipment... PS3s replacing 10,000 dollar supercomputers... clearly the video game industry knows something we don't.

Re:What have we here?

[chuckymonkey]

Video games: Why waste good technology on science and medicine? Kidding aside, I think that it's a good thing that these machines are being re-purposed. I wish that we could do it for a lot more equipment and drive down the cost of health care a little.

Re:What have we here?

[Anonymous Coward]

As a guy who designs electronics for load transducers for living, I can tell ya that a balance board equivalent platform won't run you anywhere near $18,000. Probably more like $4k. One thing that makes the Wii device cheap is the mass production. Try selling a 100 of those a year for $100 apiece -- it's impossible. The tooling for plastic injection molding will cost you more than $18k alone. As for electronics themselves, they are not really a factor in the supposed $18k, er, $4k, price. I admit I haven't checked how accurate the balance board is. All I know is that $4k buys you a platform that has ~0.5mm accuracy for center of pressure across its surface of roughly 1/4 m^2. The resolution is better than that, of course.

OTOH, I'm going out and buying the darn balance board right about now :)

Re:What have we here?

[tenverras]

The Wii Balance Board is the Canada of medical devices. Cheap, but just as effective as its expensive counterparts

Re:What have we here?

[lanner]

It's all BS. Forget all of the posts regarding FDA, documentation, testing, and that crap.

It's just a matter of how many units get sold, like microprocessors.

If you design, make, and sell one, it's $500 million. If you design one, make 500 million, and sell 500 million, they cost $1 each. Profit is the same either way.

Not a lot of people buy medical devices, with some exceptions.

Nintendo can't make them and start with high prices, then drop them later. They have to assume how many they will make, sell, and guess a good price before their first unit is sold.

And yes, I have worked in medical device manufacturing, and I currently work in non-profit cancer research. We have numerous genetic sequencers around, like ones from Illumina. They cost like $750K each, but it's really surprising how little materials is actually in them. A $500 laptop is technologically 10,000 times more advanced than one of those Illumina boxes.

It's true that medical devices are more expensive, and I'd be the first person crying foul about it, but they often really really do have good reasons to justify the higher costs... usually.

If you want to talk about price rape, look no further than Cisco.

$2000 card
http://www.cdw.com/shop/products/default.aspx?EDC=1352161

$13,0000 card
http://www.cdw.com/shop/products/default.aspx?edc=1424619

They are the SAME EXACT CARD, with a little tiny firmware tweak. We have a couple of these in the 5580 series firewalls.

Obligatory

[Naurgrim]

Ah, I see you have the machine that goes ping. This is my favorite. You see we lease it back from the company we sold it to and that way it comes under the monthly current budget and not the capital account.

No wonder

[ArchieBunker]

Hospitals charge so much. Someone along the way decided to jack up a price and its been flowing downhill to the consumers ever since.

Re:No wonder

[jedidiah]

They actually have squat to do with each other.

"Tort reform" is the rich scaring the poor and stupid into absolving them
of any real responsibility for when something goes wrong. Not only do you
have to be stupid and careless in order to be sued, but you also have to
be a total jerk about taking responsibility for your actions.

Big scary verdicts only occur when perpetrators and insurance companies try
to blow off their victims. Then equally ignorant saps in the jury add zeros
with no real understanding of the numbers they're creating.

Education reform would be more effective really.

"Health Reform" and "Tort Reform" are not really related. Although both are
portrayed as a solution to a problem that neither directly addresses.

Letting insurance companies off the hook hasn't lowered prices. Neither does
turning insulating the customer from the cost of health care. Ads that tell
selfish old geezers that they can get an overpriced motorized wheelchair
"for free" is what keeps health care costs high. Young kids being duped into
thinking that their doctor visits are "for free" is what keeps health costs
high.

So does ensuring that devices are adequately tested.

The LOC price for something used in air traffic control or avionics is probably similarly expensive.

Re:No wonder

[Anonymous Coward]

Oh ,there is much more to it than that...

A friend of mine recently had to wear a device that helps bones knit faster by using electromagnetic fields. The device cost (his insurance) $5000. I am an electrical engineer, so I couldn't resist tearing it apart to see what it was. Maybe, maybe, $20 worth of electronics. More likely $5 when manufactured with coolie labor in China.

And the reason my friend was willing to let me tear it apart? It can only be used once! It is designed to permanently disable itself after one period of treatment.

What a waste of time and resources. What a gouge to the medical consumer. You wanna talk about controlling health cost? Start here.

Re:No wonder

[Jah-Wren Ryel]

Medical malpractice lawsuits are tort cases... and we know how much testing is only done because of fear of the lawsuits. Limit the liability, and there would be much less wasted medicine being practiced.

Hasn't seemed to make much difference in Texas - the state with so much tort reform that the Governor likes to brag that malpractice insurance rates have come down - but no metric that measure the quality of healthcare has improved, for example:

• The percentage of uninsured people in Texas has increased, remaining the highest in the country with a quarter of Texans now uninsured;
• The cost of health insurance in the state has more than doubled;
• The cost of health care in Texas (measured by per patient Medicare reimbursements) has increased at nearly double the national average; and
• Spending increases for diagnostic testing (measured by per patient Medicare reimbursements) have far exceeded the national average.

Even worse - most of the malpractice savings have gone to the insurance companies, because malpractice payments have gone 67% but malpractice insurance premiums have only gone down 27%.

Public Citizen, Dec 17th, 2009

Price-gouging

[GreatBunzinni]

Is it due to the Wii's balance board being terribly cheap or is it due to the the price of the "medical-grade" device being extremely over-inflated? Some of the prices practised by medical equipment and even drug distributors are insane and they always hide behind the mysterious "it's fantastic, medical-grade stuff" and that quite possibly is plain bullshit to increase their profit.

Price has a psychological impact too.

[Anonymous Coward]

With price comes respectability. That's why Christian Science practitioners always make a point of charging for their prayers roughly as much as a real doctor would charge for treatment: They know that something given away will not be percieved as effective.

Same thing here. Stick a patient on a wii board, and they'll regard it as quack rubbish. Stick them on an $18,000 purpose-built and impressive piece of diagnostic equipment with the logo of a respected medical equipment manufacturer (ie, not nintendo) and they'll feel far more confident, even if they do exactly the same thing equally well.

Customers who feel they arn't being given an expensive enough service are more likely to sue the hospital.

Perception

[jlb.think]

It is all just people's perception. A videogame can't be too expensive, but it damn well better work so the market pushes high quality at low prices. In the medical world we expect devices to cost out of the ass and be complex. That is the exact opposite of the videogame, or rather, the general technology world. It is about time there is direct market competition with the medical device manufactures who rip us off and overcharge for clunky hard to use equipment that doesn't work that well in the first place.

This is not a shock...

[Anonymous Coward]

I had been prescribed a medical device to assist in night time breathing... after asking the clinic person to show me an itemized list of parts and costs, I was shocked at the bill - over $2,200 (USD). She was annoyed that I wanted this list printed out because my insurance was "going to pay for it anyway..."

A few months later, my insurance no longer wishes to pay the rental costs - so I have to return it or pay $250/month. Found online for $700 new and delivered with three years of support.

Only when you put medical care in a truly competitive market is when you'll actually see competitive prices.

Re:This is not a shock...

[Big Boss]

I've started purchasing my own CPAP machine and accessories as well. Far cheaper than dealing with the home medical place locally (owned by my insurance company no less), even with insurance coverage picking up part of the bill. For less money, I get a better machine and direct support. And I can run the purchase through my FSA, so it's tax free. :)

FWIW, nebulizers are the same way. I bought a very nice machine online for about half the cost of the local place, and the local place wanted to give me a gigantic POS. I bought a very compact unit that has much nicer features.

Eyetoy

[Anonymous Coward]

The eyetoy from the PS3 is also de best camera in the market and it costs less than 40€. It has 75 degree wide lenses and can reach 125 fps. This is much more than what most cameras do. Even the 200€ ones.

accelerometers?

[edelbrp]

"When doctors disassembled the board, they found the accelerometers..."

They did? I couldn't find any information stating that the balance board had motion sensing. Everything I've read says it just has four pressure sensors, one for each corner and that's it.

Re:accelerometers?

[Anonymous Coward]

New Scientist may have made that up. The actual journal article on ScienceDirect only discusses a black-box approach: i.e., putting patients on the board and seeing what happens. The procedure doesn't mention disassembling the device whatsoever!

Medical insanity

[syousef]

What determines the price of a scale is not just its equipment or accuracy.. but also the insurance the manufacturer has to carry in case something goes wrong. That's why medical devices are more expensive... you're also paying for the liability of somebody being misdiagnosed by a technical malfunction. Highly unlikely, but the money that has to be paid when that happens and gets proven is huge.

So they system is "protecting" patients right out of being able to afford treatment, and people are still willing to stand up and defend this insanity. With these sorts of controls, many, many patients go without treatment, or worse go for alternative Voodoo treatment that do harm because they simply can't afford the real thing. It's a sure sign that the medical system is itself quite ill and probably clinically insane.

What needs to happen is companies need to be held accountable for gross negligence and willful malice, but permitted to release a medical device with a disclaimer about the level of testing that has been done. If the overhead for adhering to medical standards is literally an 180 fold increase in the price, clearly there is something very wrong with the efficiency of the system.

Economies of Scale

[burritozine]

Everyone has rightly pointed out that the cost of this sort of device is inflated by regulatory headaches and liability concerns. Let's not forget simple economies of scale here. A video game controller will likely sell millions if not tens of millions of units before it's eventually retired from the market. A medical balance board, on the other hand, is at best a niche device whose sales will likely be at least an order of magnitude (or two!) smaller. The costs of designing, testing and building this device are borne by a comparatively tiny number of sales, hence the higher price.

Medicare won't pay for Wii because of dual purpose

[aspelling]

Medicare and many insurance companies won't pay for Wii because it is dual-purpose device
NYTimes had a story when they refused to pay for iPhone-based speech synthesizer for a paralyzed patient but had no problems paying $5000 for a desktop based one because the desktop-based device was not able to do anything but synthesize voice
 

But can they use it?

[POds]

I know in my professional industry, there may be many a cool technology or device that i want to use, but may not be able to, despite the fact it looks good and can handle what i throw at it. However, i may not technically be able to use it because it has not been tested against specific guidelines or a part of the product was not tested against particular standards with the right amount of traceability.

I believe that’s why some particular product may cost more than any other. I.e a device to be used in a medical institute for diagnosis of any kind would probably require quite a lot of process in it's accreditation that the Wii probably didn't have to go through to be used as a game machine.

Been there.

[VertigoMan]

I lost all the balance function in my ears more than 5 years ago. At that time only one center in the Phoenix area had the testing equipment. It took me 3 months to get in for testing and the testing ended up costing me close to $500. Oh and that was out of pocket as the testing center wasn't covered on my insurance plan. I would love to see something as inexpensive as this as a first round of testing. Would have saved me months of stress over not knowing what the hell was going on.

Has Little to Do with Lawsuits

[Comatose51]

The reason medical devices are so expensive has little to do with lawsuits when compared with the number one reason: the market for health care is distorted because the decision maker (doctor) is not the person paying for the decision (the patient or insurance). Medical device companies just market directly to doctors. Medical conferences are like industry paid vacations for doctors. Even if you tell your doctor that your Wii balance board does the same thing as the $18,000 device, he's still not going to prescribe it because he has no incentive to. He doesn't bear the cost of paying for it. You do or most likely your insurance do. You see the exact same thing in the textbook industry. The professors make the decision and the students pay for it. When the two entities are not the same, you have a market that's distorted and normal mechanisms of capitalism don't lead to lower costs and greater efficiency like they do in other areas. Of course FDA approval definitely plays into this by making it easier for doctors to have support for their decisions.

sounds familiar

[sneakyimp]

This reminds me of the $800 hammer that defense contractors sold to the US government back in the 80's. It was an ordinary hammer.

Re:sounds familiar

[amiga500]

Do you know how much it costs to sell an $800 hammer? It's easy to sell a $10 hammer. For the $800 one, you need to hire a sales staff and lobbyists getting government contracts. You need to entertain your buyers, you may have to do trial runs, POC, RFP, provide 'free' training etc.. These things are all must be added into the cost of the product. I doubt Nintendo has sent salespeople to visit the doctors in the Melbourne, nor have they likely taken them out for dinner, provided them with equipment leasing options, or guaranteed a service and replacement contract. When I sent my Wii in for repair, it took six weeks and I lost all my data. You can't expect hospitals to get the same level of service as consumers.

You miss the point here - cost is irrelevant

[tg123]

There is no justification for an $18,000 price difference for what amounts to the same fundamental technology. I don't need a formula, or theories as to why this is. The medical industry is full of a bunch of crooked greedy bastards........

I think your missing the point here.

It's not how much it costs or if there ripping us off .

"The how much it costs" argument is irrelevant.

Its the fact that we are now getting devices, which are used to play games, in our homes which are comparable to highly sensitive medical devices.

WOW !!!

The doctors in this melbourne hospital should also be congratulated for looking at alternative ways of doing things.

"what the market will bear"

[nsayer]

Want to make a mint selling ordinary hardware?

All you need to do is either

A. Get it FDA certified for use in medicine.

Or

B. Get it FAA approved for use in aviation.

You can pretty much guarantee a 100x price premium in the former case or perhaps 10-20x in the latter case.

Of course, requiring government certification for things upon which the general public relies for life safety is not necessarily a bad thing, but the price premium that comes from the certification requirement probably is proportional to the square of the cost of doing whatever is necessary to obtain said certification.

Re:Surfy

[VJ42]

"I bet you the Defense Department could find lots of savings by sourcing their parts from Nintendo, too!"

Until the system fails because it wasn't built the have the shit beaten out of it in daily use. Military gear resembles professional construction equipment and is usually made in smaller quantities. While COTS solutions are attractive, they don't always suit the tasking.

Nintendo's systems are designed to resist small children; a force far more dangerous than anything the military can come up with ;p

re: FDA approval, etc.

[King_TJ]

Yes, but all of what you just said further illustrates why govt. bureaucracy is causing our medical expenses to spiral out of control. It's not sustainable. The only people who really "win" in this mess are the attorneys, and all the talk of medical reform in the USA right now conveniently skips changes in THAT area.

Not long ago, I was reading about a heart surgeon in India who among other things, got tired of the high cost of medical sutures. Apparently, the only supplier of the ones he needed was the Johnson & Johnson company, and they kept increasing prices each year. He finally got some investors together, who opened their OWN manufacturing facility to produce the sutures in India at a far lower cost, so he can now buy from them and cut at least 35% off of his annual expenses for them. (Since he's running huge clinics doing nothing but heart surgeries there, he benefits more than most would from "economy of scale".)

It seems to me, that's exactly the type of change the medical field needs to see. Unfortunately, government legislation often seems to stand in the way of progress here in America. (A doctor my friend knows heard this story about the medical sutures and angrily protested, "But I'm not even legally ALLOWED to invest in such a thing as a surgeon in the US!")

As it stands now, doesn't it bother you at least a LITTLE bit that you had to fork out upwards of $250,000 in *lawyer fees* just to prove that it was ok for a hospital to start using what's really just a touch-screen PC in a hardened metal frame?

Re:Nail on the Head...

[swillden]

Any health reform that does not change this won't contain costs. What you are wrong about is the idea that a one-payer system can't change this. It may not - I can think of several plausible national health care systems that wouldn't - but some in Europe do.

Agreed. I was speaking primarily of the approaches being bandied about for the US, all of which would strongly favor low or no-deductible coverage and trivial co-pays.

That said, I am not in favor of a national health care system.

A systen where deductibles were $10,000 minimum with 50-90% of costs (depending on price etc) were covered after that, would do wonders for keeping costs down and improving medical tech (that last bit national health care tends to be rather poor at)

T

$10K is a bit higher than I would go, especially if the deductible resets annually. For many people a $10,000 bill is a financial catastrophe. I'd start it at half that, maybe a little less. Although I'm generally quite libertarian, in this case I think I'd also like to see forced health care savings. The collection process could be handled similar to social security, with the (very important!) difference that the funds are deposited in an account owned by the individual. So any employed (or self-employed) individual would begin building a health savings account from the first day they start collecting a paycheck. Since people are generally healthy in their younger years, that should ensure that by the time they start experiencing significant medical expenses they CAN afford a $10K deductible. At retirement, any money in the health care savings account should convert to a traditional IRA. Funds withdrawn and spend on health care should be tax deductible, other withdrawals should be taxed as income.

Similarly, in order to ensure that insurers can spread risks across the broadest possible pool, I would suggest that at least a basic level of high-deductible insurance be mandatory for everyone who is employed. I'd leave it to private insurers to compete for the business, but every employed person would be required to purchase medical insurance meeting the mandated minimum standards for catastrophic coverage. Setting the standards low and requiring everyone to buy should allow premiums to be very reasonable. Making coverage mandatory would also allow us to legislate that insurers cannot decline to cover an individual without worry that it would encourage the healthy to opt out.

It should also be mandatory to purchase coverage for your dependents.

All that "mandatory" stuff really goes against my principles, but I think it's impractical to allow people opt out -- because we're too soft-hearted to TRULY allow them to opt out. As long as we don't feel comfortable refusing emergency treatment to those who can't pay, we need to focus instead on ensuring that everyone can pay because they're full participants in the system.

Even requiring everyone who is employed (and their dependents) doesn't fully resolve the issue. There are still people who are unemployed, and there are people who do get very sick while still too young to have built up significant health savings. We need to make it easy for relatives and charities to help out, and we probably need government intervention to arrange for coverage when that fails. It should be handled at the state level, though, not federal, to allow us to explore a variety of options and figure out what works well.

That's how I'd set it up, if I were in charge :) You're probably glad I'm not.

Re: FDA approval, etc.

[dogugotw]

So here's the rub. If 'the government' backs off and lets device and drug companies be less rigorous and more nimble in their work, whoo whoo...more change in less time, innovation, costs drop, new products stream onto the market...yeah.....happy day....
Until someone gets hurt because the company didn't do the things you should do when designing products that are supposed to save lives. A couple of years back the FDA did exactly this to a company making...ohhh flu vaccine. Seems they cut the company a bit too much slack and the entire batch was crap, had to be recalled, and people didn't get flu shots. Guess who spent time sitting in front of a congressional committee explaining what happened? YOU want to explain the congress why companies are killing people?
I work in the industry and as much as I chafe under the paperwork, I have to admit that the only thing the FDA is doing is making us do what we SHOULD be doing. Is it expensive? You betcha. But I, for one, don't want MY health damaged because someone wanted to get product x to market just a bit faster and for a lower cost.