America's Stunningly Overpriced Healthcare System In 2 Charts

[jamtoday]

74. An article from 2010

Highlighting how the centralisation of ancillary services stifle innovation and drive up costs. It's about needleless catheters and stopping infections. A more efficient, safer and cheaper product being squeezed out by corrupt political and financial practices.

"After months of trial and error, Shaw hit on the idea of surrounding the tip of the syringe with six petal-like flanges, which could flare open to make way for the catheter port. Unlike some of the solutions floated by big medical device makers, such as coating the ports with silver, Shaw’s innovation added only a few pennies to the cost of production. And it seemed to be remarkably effective: a 2007 clinical study funded by Shaw’s company and conducted by the independent SGS Laboratories found the device prevented germs from being transferred to catheters nearly 100 percent of the time."

"In the case of syringes, the incumbent heavyweight has long been Becton Dickinson, or BD, a New Jersey–based company that controls 70 percent of the syringe market and has a lengthy history of trampling competitors. As early as 1960, BD was brought up on Justice Department charges for its anticompetitive practices—among them price fixing, buying up patents to kill its rivals’ innovations, and forcing hospitals to buy its syringes to get other essential supplies, some of which were only produced by BD."

"Often, these large companies used their clout to squeeze hospitals on prices. To keep costs in check, in the 1970s many medical facilities began banding together to form group purchasing organizations, or GPOs"

"Originally, these purchasing groups were nonprofit collectives and were managed and funded by the hospitals themselves. But in the mid-1970s, the model began to shift. Some large hospital chains started to spin off for-profit GPO subsidiaries,..."

"Then, in 1986 Congress passed a bill exempting GPOs from the anti-kickback provisions embedded in Medicare law. This meant that instead of collecting membership dues, GPOs could collect “fees”—in other industries they might be called kickbacks or bribes—from suppliers in the form of a share of sales revenue."

"This situation only grew thornier in 1996, when the Justice Department and the Federal Trade Commission overhauled antitrust rules and granted the organizations protection from antitrust actions, except under “extraordinary circumstances."

Full article at link.

http://www.washingtonmonthly.com/features/2010/1007.blake.html