Look at these price increases!

Rastaman · Post by **Rastaman** » Mon Jul 03, 2006 2:39 pm

I noticed so far this hasn't affected cpap.com's prices yet. I guess that's a yet huh?

Issac unregistered · Post by **Issac unregistered** » Mon Jul 03, 2006 2:45 pm

Based on these prices, the Hybrid is only 15.00 more than the Swift???

Paul B · Post by **Paul B** » Mon Jul 03, 2006 2:46 pm

Wulfman, Resmed can charge whatever they want for their products and there would be no issue with price-fixing. Price fixing only occurs when multiple suppliers of equipment get together in various ways, and agree among themselves in a clandestine manner to price products close to one another's prices. This is clearly illegal. It usually only works when you have an oligopoly or a small number of companies creating a market and usually with large barriers to entry, kind of like the oil companies. It used to be competitive in the oil industry, but with so many mergers having taken place, in my opinion it is no longer competitive so they charge what the market will bear. The huge barrier to entry is that the cost of building an oil refinery today is hugely expensive and would take a lot of time. They actually closed down refineries some number of years ago creating an artificial scarcity.

The thing we need to remember about internet sales of apnea equipment is that it is small potatoes, a small blip on the radar to the manufacturer. As Johnny Goodman would tell you, it is only about 6% of manufacturers revenues. Resmed is not concerned about the sales loses of their decision. In fact, what internet sales they do get will be hugely profitable to them.

What I find reprehensible about their decision is that they are closing off the only cost friendly way for people without insurance to afford equipment. Some people will be forced to go without treatment because they will be unable to afford the new prices, if the other manufacturers follow along with Resmed. Some of them won't, but the other big ones may, resulting in fewer choices for people in need.

Sleepy-in-AL · Post by **Sleepy-in-AL** » Mon Jul 03, 2006 3:42 pm

Paul B wrote:Wulfman, Resmed can charge whatever they want for their products and there would be no issue with price-fixing. Price fixing only occurs when multiple suppliers of equipment get together in various ways, and agree among themselves in a clandestine manner to price products close to one another's prices. ...

This isn't entirely accurate. They aren't "setting their prices," they are manipulating a segment of the market with the expressed intent to artificially inflate or maintain the excessive charges currently paid by insurance providers. They are in effect colluding with DMEs to "fix" the price at thier MSRP. Look back at the article where this policy first came to light in Investor's Business Daily. This is not only price fixing it is insurance fraud.

They have every right to set their prices and policies based on many parameters. But it appears that the policy is "Thou shalt sell at or above this MSRP" again with the expressed intent to maintain inflated insurance payments. The policy as far as I have seen does not affect the price Internet resellers pay for the product. It is unclear at this point what the punishment will be for failure to comply.

Guest · Post by **Guest** » Mon Jul 03, 2006 3:59 pm

[quote="Rastaman"]I noticed so far this hasn't affected cpap.com's prices yet. I guess that's a yet huh?

Wulfman · Post by **Wulfman** » Mon Jul 03, 2006 4:09 pm

The way I read it (broadly), price-fixing doesn't necessarily have to be between "competitors".

A few references to price-fixing:

http://business-law.freeadvice.com/trad ... fixing.htm

Most state statutes provide that fixing the price of a product or service in agreement with another individual or business is illegal. The general rule provides that a vendor may not in combination with another vendor agree to set a certain price thereby creating a fixed price within a certain market. A business acting on its own and not in concert with another may use legitimate efforts to obtain the best price they can, including their ability to raise prices to the detriment of the general public. Also, conformity of prices within a given product is not illegal unless such conformity was created by a combination of vendors agreeing on a set price. For example, where competitors agree to sell their goods or services at a specified price, minimum price or maximum price and they receive profits from such an agreement, they are in violation of price fixing. Additionally, setting a price to be charged only within a certain area in order to get rid of competition or to create a monopoly is generally illegal under most state laws. A majority of states have also enacted a "Below-Sales-Cost" law wherein businesses may not sell goods below cost if they do so with anti-competitive intent or effect.

http://www.usdoj.gov/atr/public/guideli ... er-ncu.htm

Price fixing can take many forms, and any agreement that restricts price competition violates the law. Other examples of price-fixing agreements include those to:

* Establish or adhere to price discounts.
* Hold prices firm.
* Eliminate or reduce discounts.
* Adopt a standard formula for computing prices.
* Maintain certain price differentials between different types, sizes, or quantities of products.
* Adhere to a minimum fee or price schedule.
* Fix credit terms.
* Not advertise prices.

In many cases, participants in a price-fixing conspiracy also establish some type of policing mechanism to make sure that everyone adheres to the agreement.

http://www.answers.com/topic/price-fixing

(there's a section in this site that defines "Vertical price-fixing"

Paul B · Post by **Paul B** » Mon Jul 03, 2006 4:54 pm

Hi Sleepy,

A couple of comments:

1) I think you'll find that the prices that cpap.com will have to pay for Resmed equipment will significantly go up in either August or September, but based on quantities purchased they may still be less than many DME's. My understanding of what Resmed is trying to do is to force internet suppliers to pay more for their equipment and then expect them to provide additional services to their customers consistent with what services they think DME's provide, which in many cases is not any more than internet suppliers currently provide. Resmed claims their objective is to provide better compliance for therapy for their users like you and me, but that very well may be a smokescreen for other purposes.

2) I'm certainly no expert in this field, and it would be interesting to see Johnny Goodman's take on all this, but I suspect he is somewhat constrained in what he can say publicly in that Resmed is one of his suppliers that he must maintain a relationship with, however small it turns out to be.

Sleepy-in-AL · Post by **Sleepy-in-AL** » Mon Jul 03, 2006 5:47 pm

Paul,

Paul B wrote:Hi Sleepy,

A couple of comments:

1) I think you'll find that the prices that cpap.com will have to pay for Resmed equipment will significantly go up in either August or September,...

This may be true. That was my initial understanding, especially based on the article in Investor's Business Daily. But from what I've gathered since then I've been lead to believe that the "wholesale" prices weren't changing. Either way, the end result for the consumer and the insurance companies is the same - artificially inflated prices.

Paul B wrote:My understanding of what Resmed is trying to do is to force internet suppliers to pay more for their equipment and then expect them to provide additional services to their customers consistent with what services they think DME's provide, which in many cases is not any more than internet suppliers currently provide. Resmed claims their objective is to provide better compliance for therapy for their users like you and me, but that very well may be a smokescreen for other purposes.

I'll quote some of my response to another related thread, see viewtopic.php?p=89854&highlight=#89854 for the full discussion. As you say, thier "concern" is a smokescreen. If they were the least bit concerned with patient care, they would implement policies that improved patient care, not increase the prices patients pay.

sleepy-in-al wrote:One thing most of us agree on though, this is NOT about patient care or compliance! It is about profit and nothing more. They certainly have the right to maximize profits (and even the obligation) so long as they do it ethically and legally (and this is borderline at best). Just don't lie to me and tell me its for my own good.

If they want to improve service and compliance, set policies that will result in these goals. Here are some examples of policies I would love to see. But I'm sure that the DMEs would find a way to mess this up too.

1. Make it mandatory for the dispenser to complete a followup questionaire with the patient after some number of days. This would provide the DME and the manufacturer valuable market research and give the patient an opportunity to discuss problems they are having.

2. Require that all RTs dispensing their equipment actually be trained IN DETAIL on the functions, configuration, and patient demonstration of their specific equipment.

3. Require that all dispensing DMEs offer a 2 week follow-up to read data from the equipment to determine that things are functioning as expected. For instance, is the average leak rate within the tolerance level for the particular mask? Are there any large leaks? Are there numerous leaks?

4. Respond to E-Mail sent to their public relations e-mail address whether it be positive or negative.

5. Require that dispensing DMEs provide a 24 hour hot-line for therapy related problems.

Any or all of these policies could positively impact patient care. I predict you won't see any of them implemented because DMEs don't get paid any extra for providing service or caring. They get paid UCR charges for product codes nothing more. I like others here advocate separate billing for RT time. But not while they still charge extremely over inflated rates for equipment.

Paul B wrote: 2) I'm certainly no expert in this field, and it would be interesting to see Johnny Goodman's take on all this, but I suspect he is somewhat constrained in what he can say publicly ...

I agree it would be interesting to hear his take on it but, as you suggest, I'm sure he must choose his words carefully. There may even be contractual requirements regarding what he can say publicly.

I really hope that the insurance companies and the government wake up and put ResMed on notice! However, I live in the real world and fully expect that ResMed will get away with this, at least initially. However, as I also suggested in another thread, I believe that ResMed's market share may already be decreasing, and definitely so in the "informed and educated" market.

Darth Vader Look · Post by **Darth Vader Look** » Tue Jul 04, 2006 1:59 am

I don't really want to come across as the doomsayer here but if Resmed is just raising the prices that online website DME sellers have to pay, I don't see anything stopping them from doing this. Typically speaking, insurers don't deal with online sellers so they will not have anything to say in regards to this as it doesn't affect them. Unless the online sellers get together as a group and fight this, you will see nothing happen or change. And based on statements from Tracy at the TAS store front, you already see division in this group. I'll bet a dollar to a donut that Johnny is just biting his tongue off to keep from airing his frustration with this. Pricing use to be a supply and demand thing but if what has been stated previously comes true, that will have put a new spin to things. If this does happen my Resmed buying days will be long over. So glad that the hybrid has come to market and maybe the price will go down. If the reviews of the hybrid stay very positive, that will be my next mask.

ke4qwe · Post by **ke4qwe** » Tue Jul 04, 2006 9:26 am

Just to let everyone know what happen to my DME. DME gave me a mirage Swift with my machine as that was what I used at the Sleep Center and then charged the Insurance Company $240 for the same mask that is around 120 on the internet but guess what the Insurance Company would only pay the DME $61 for it. At lease for once the Insurance Company is taking some one else to the cleaners besides me/

pratzert · Post by **pratzert** » Wed Jul 05, 2006 7:05 am

[quote="Paul B"]Hi Sleepy,

1) I think you'll find that the prices that cpap.com will have to pay for Resmed equipment will significantly go up in either August or September, but based on quantities purchased they may still be less than many DME's. My understanding of what Resmed is trying to do is to force internet suppliers to pay more for their equipment and then expect them to provide additional services to their customers consistent with what services they think DME's provide, which in many cases is not any more than internet suppliers currently provide. Resmed claims their objective is to provide better compliance for therapy for their users like you and me, but that very well may be a smokescreen for other purposes.

2) I'm certainly no expert in this field, and it would be interesting to see Johnny Goodman's take on all this, but I suspect he is somewhat constrained in what he can say publicly in that Resmed is one of his suppliers that he must maintain a relationship with, however small it turns out to be.

_________________

After the experience I had with my Insurance company and Apria DME, even if the price was the same.... I would STILL buy from cpap.com.

At least I got the machine "I" wanted and not the one the DME wanted me to have to increase their profits at the expense of my health.

In fact.... now that I think about it.... even if it cost MORE than the insurance DME, I would still give my business to an internet provider.

I actually got MORE and BETTER service from cpap.com com than Apria gave me.... and I did not have to take the verbal abuse and pressure that Apria put on me to take the crap machine they wanted to give me.

Long Live the internet dealers !

Tim

rested gal · Post by **rested gal** » Wed Jul 05, 2006 8:30 am

Paul B wrote:My understanding of what Resmed is trying to do is to force internet suppliers to pay more for their equipment and then expect them to provide additional services to their customers consistent with what services they think DME's provide, which in many cases is not any more than internet suppliers currently provide. Resmed claims their objective is to provide better compliance for therapy for their users like you and me, but that very well may be a smokescreen for other purposes.

Maybe I've misunderstood ResMed's announcements about the price increase. I thought ResMed is saying that the internet suppliers will have to SELL ResMed products at higher prices. If there was something in the announcement that said ResMed was going to make the internet suppliers pay ResMed more for stuff, I missed that.

My understanding of it is that ResMed will not even allow the internet suppliers to buy any products from ResMed UNLESS the internet suppliers charge higher prices for ResMed products.

I agree that all the ResMed talk about doing this as a means of making internet suppliers provide more support and service is a smokescreen. To me, it's nothing more than ResMed doing a favor for the bricks and mortar DMEs and their own (ResMed's own) sales reps. After all, take away the lower prices advantage that the internet retailers are giving to the consumer and the consumer is more likely to go shopping at the local DME in town.

Not this consumer, though. There are plenty of other good brands to choose from -- on the internet.

Rastaman · Post by **Rastaman** » Wed Jul 05, 2006 8:46 am

That's a very good point. I've become more and more aware of different brands. And this whole concept just escapes me in the typical price war marketplace. For example, if one store raised prices on gas 30% higher than another store, they would probably go out of business.

Now, Sony has been getting away with this for years and up until fairly recently they always had a quality product. They've been riding on that name for quite awhile if you ask me and the products don't necessarily match anymore. So, let's say I'm going out to buy a TV or DVD player, would I buy Sony? No way! I'd get something with a better track record (customer reviews wise) with similiar if not identical features for a lesser price. That's why having customer reviews is so important! Websites like Circuit City have them, but sites like Best Buy don't.

Regarding insurance, while I have it, I'll get whatever the DME recommends or has on available because I'm not paying for it AND my insurance has nothing in place to help me help THEM in the way of getting better prices, etc. As far as I can see, the insurance companies are doing this to themselves. I suspect something else is going on behind the scenes. Something sinister.

On the other hand, If I personally have to buy a product, I'm going to buy something that fits my pocketbook! I suspect this kind of purchase is less than 5% of the total though. And that's why they're able to actually RAISE prices and get away with it. Now, Resmed products will only be for those who get it through a DME or rich folks. But I don't blame YOU guys one little bit for voting with your dollar. Maybe our 5% and another 5% down the road will start to add up. In fact, shout high and low!

DME_Guy · Post by **DME_Guy** » Wed Jul 05, 2006 9:24 am

Our whole health care system is based on fixed pricing. For example, Medicare and insurance companies pay a fixed price for everything based on a code. From what I've read here, I'm under the impression that some of you think that insurance companies pay what they're charged. Not at all true. They pay a set fee for your equipment and care, regardless of what equipment you get or which Dr you see. I went to a dentist a few years back and asked if I could get a discount as a cash paying customer. I was told no because Delta Dental wouldn't allow it. Is that legal? Doesn't seem like it to me but I'm not a lawyer.

What about drug companies? Do you think they fix pricing? http://www.aflcio.org/aboutus/thisisthe ... ckupprices

And what about the health insurance companies? Do you think it's just a coincidence that rates seem to go up at the same time with most of the big companies? I don't think so. Over the past several years, they've raised premiums and cut services at the same time. And good luck even getting health insurance if you have a pre-existing condition.

I'm glad many of you are upset about Resmed. I hope you're so upset that you realize that it isn't just Resmed, but our whole health care system. This is a "wake up" call! Pun intended. Our health care system is in need of a major overhaul. I can't believe it's not a major political issue yet. I don't know how bad it has to get before we start putting some pressure on politicians. I think as more and more people have to pay for the rising cost of health care out of their own pocket instead of just hearing that their employer has to pay more, it will become a very big issue. It's already affecting companies like GM ability to compete in the global market.

Rastaman · Post by **Rastaman** » Wed Jul 05, 2006 9:45 am

Well, I think the companies out there as a whole would like to do away with health insurance altogether. In other words, if they all stop paying for it at the same time, then no company will be offering it. And those profits can go to the guys up top and the shareholders. (In minimal increments ofcourse)

I've had the impression for a long long time that companies would rather just take my money than give me a product in return. I've always known that. That's cutting into their profit margins ya know?

I think the biggest problem politically, is you have half the people saying everything is alright and it's great. Just "sit back and relax" and don't worry your pretty little head about this. The other half wants fair change but it's hard when the other half things everything is just dandy. That or they have their heads in the sand thinking everything is lovely. Yes, this is better than being at war or in a country so poor it can barely pay for healthcare. But this is supposed to be the US of A!

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Additional Comments: Pressure MinE 11 MaxI 17.5

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Additional Comments: Pressure MinE 11 MaxI 17.5