They definitely do, but for different reasons.
Hospitals increase prices they send to insurance so that the reduced rate the insurance pays covers their cost+profit. The insurance company wants to spend as little money as possible from their risk pool, and they want to advertise their “massive negotiation powers” to their big customers who have enough members to self fund (the insurance company just manages the money and billing, so zero risk on their part).
GE and the hospital have a much more traditional business to business relationship. GE is actually providing them with a very delicate piece of machinery that is enormous, filled with liquid helium, that produces a preposterous magnetic field and is safe enough to stick a squishy person into.
Their extra markup comes from the certifications that tell you that you can trust that it’s safe for those squishy people. It’s an intangible value add, sometimes legally mandated (FDA approval), sometimes an assurance of quality (all those ISO certifications attesting to quantifiable defect rates).
They’re not charging you more so when you pay less they still make a profit. They’re charging more because there’s only a handful of companies that can actually sell the damn things, and they all also have the same intangible costs.
Medical equipment is expensive because the price jump between “works” and “you can trust it with someone’s life” is a very expensive one. The paper documenting it even more so.
They definitely do, but for different reasons.
Hospitals increase prices they send to insurance so that the reduced rate the insurance pays covers their cost+profit. The insurance company wants to spend as little money as possible from their risk pool, and they want to advertise their “massive negotiation powers” to their big customers who have enough members to self fund (the insurance company just manages the money and billing, so zero risk on their part).
GE and the hospital have a much more traditional business to business relationship. GE is actually providing them with a very delicate piece of machinery that is enormous, filled with liquid helium, that produces a preposterous magnetic field and is safe enough to stick a squishy person into.
Their extra markup comes from the certifications that tell you that you can trust that it’s safe for those squishy people. It’s an intangible value add, sometimes legally mandated (FDA approval), sometimes an assurance of quality (all those ISO certifications attesting to quantifiable defect rates).
They’re not charging you more so when you pay less they still make a profit. They’re charging more because there’s only a handful of companies that can actually sell the damn things, and they all also have the same intangible costs.
Medical equipment is expensive because the price jump between “works” and “you can trust it with someone’s life” is a very expensive one. The paper documenting it even more so.