How does manufacturer pricing affect you?

Den, seriously, you and others are so misinformed in this topic.

Here's what happened;

This whole industry was typically covered by insurance. Nobody saw end-pricing because no one really paid cash for OSA products.

Over the past few years a few less-than-business-saavy people decided to start selling OSA supplies online. Then these internet folks got egoes and decided to go compete with each other over who could offer the lowest price (winning nothing really). Sometimes this meant selling at $30 or less over their cost of goods thinking (stupidly) that a higher quantity moved would "make up for it." Again, less-than-business-saavy people here.

Unfortunately the manufacturers didn't immediately realize how irrational certain customers of theirs were being in light of the fact that there had never been any policies on public end-pricing and market positioning because, again, most of it was hidden in insurance.

Who benefited? The uninsured cash paying public of course (you guys) however now you are mistakenly believing that companies (real companies) can actually be profitable selling at these moronic low-margin prices. The answer? They can't.

Guest wrote:Den, seriously, you and others are so misinformed in this topic.

Here's what happened;

This whole industry was typically covered by insurance. Nobody saw end-pricing because no one really paid cash for OSA products.

Over the past few years a few less-than-business-saavy people decided to start selling OSA supplies online. Then these internet folks got egoes and decided to go compete with each other over who could offer the lowest price (winning nothing really). Sometimes this meant selling at $30 or less over their cost of goods thinking (stupidly) that a higher quantity moved would "make up for it." Again, less-than-business-saavy people here.

Unfortunately the manufacturers didn't immediately realize how irrational certain customers of theirs were being in light of the fact that there had never been any policies on public end-pricing and market positioning because, again, most of it was hidden in insurance.

Who benefited? The uninsured cash paying public of course (you guys) however now you are mistakenly believing that companies (real companies) can actually be profitable selling at these moronic low-margin prices. The answer? They can't.

Taking that statement......my point would be that the WHOLE INDUSTRY was milking a "cash cow" (actually an insurance cow) for all it was worth.....and to Hell with the "end users"......yeah....US.....the ones who sleep with this stuff every night.
The "WHOLE INDUSTRY" doesn't really give a damn about the end users.....only making big profits.

THANK GOD FOR THE INTERNET/ONLINE SELLERS.....and the user support groups like the forums we're using now. Many of the stories I've read over the last several years show that there's either borderline or downright incompetence in the brick and mortar DME industry and the medical community. It's incredible!

As I said (in so many words) in my earlier post......if the WHOLE INDUSTRY doesn't wake up pretty darned soon, when this economy goes completely in the tank, it's gonna be U G L Y for lots of people......those that NEED the equipment and those that make and sell it. The employees covered by insurance are going to be fewer (there have already been massive layoffs) and those that still have it are going to be paying huge premium amounts.

What's "wrong" with the "cash paying public"? I used insurance for my sleep study and buying my first machine (they reimbursed me for my online purchase) but I've purchased FOUR additional machines totally out-of-pocket.....three were from an online seller (including an Auto for my son who got screwed by a local DME and was given the lowest-end "Plus" model with no C-Flex) and one from a private individual.

I'd say the "less-than-business-savvy people" are the ones in the manufacturing sector......NOT the online sellers. Like has been stated, the manufacturers made their profit when the machines were sold to the resellers. If they get acquired or go belly up, it's not the fault of the end users.

Time will tell what's going to happen with this economy, but if I was working for one of the flow generator manufacturers, I'd be polishing up my resume.


Den

Guest wrote: Unfortunately the manufacturers didn't immediately realize how irrational certain customers of theirs were being in light of the fact that there had never been any policies on public end-pricing and market positioning because, again, most of it was hidden in insurance.

You're correct, most of the wallet-raping has been hidden by insurance payments. Insurance companies have negotiated rates with DME providers. There is a certain amount they will pay for "reasonable and customary" charges. So, people with insurance cause the DMEs to make less money than those paying cash in a MAP priced environment. The DMEs have no choice but to accept what the insurance company wants to pay, same as the doctors. Either accept that price or lose a chunk of business.

So, as a person with crappy insurance, it was cheaper for me to buy online than go through the DME my insurance required. The insurance company wants to "rent-to-own" the machine for 13 months to ensure they get 2 years worth of deductible from me, then 10% of the remaining balance after the deductible. The insurance company probably would have paid zero when all was said and done since they'd have gotten $500 twice in deductibles. The B&M DME couldn't even TELL ME how much the machine costs -- it depends on the billing code. So, defend these folks if you wish, but in the long run, the consumer is being screwed.

Over the past few years a few less-than-business-saavy people decided to start selling OSA supplies online. Then these internet folks got egoes and decided to go compete with each other over who could offer the lowest price (winning nothing really). Sometimes this meant selling at $30 or less over their cost of goods thinking (stupidly) that a higher quantity moved would "make up for it." Again, less-than-business-saavy people here.

So, by your own admission, these online e-tailers are STUPID and are just going to lose money and shrivel up and die -- which hasn't happened, otherwise these other businesses wouldn't be "suffering".

So, in the end, setting a 3x markup forced upon anyone selling their products was set up. Anyone who tells you that 3x markup is fair is a moron. It allows inefficient retailers to stay in business and make a profit despite having no economic feasibility.

Guest wrote:Den, seriously, you and others are so misinformed in this topic.

Here's what happened;

This whole industry was typically covered by insurance. Nobody saw end-pricing because no one really paid cash for OSA products.

Over the past few years a few less-than-business-saavy people decided to start selling OSA supplies online. Then these internet folks got egoes and decided to go compete with each other over who could offer the lowest price (winning nothing really). Sometimes this meant selling at $30 or less over their cost of goods thinking (stupidly) that a higher quantity moved would "make up for it." Again, less-than-business-saavy people here.

Unfortunately the manufacturers didn't immediately realize how irrational certain customers of theirs were being in light of the fact that there had never been any policies on public end-pricing and market positioning because, again, most of it was hidden in insurance.

Who benefited? The uninsured cash paying public of course (you guys) however now you are mistakenly believing that companies (real companies) can actually be profitable selling at these moronic low-margin prices. The answer? They can't.

OPEC makes the same argument. Respironics and Resmed are doing the same as OPEC, controlling the price, it is not supply and demand it is price fixing and our government encourages it. We the uninsured have to pay the price because of Medicare, as it has a stipulation that says you will not sell items at a lower price than what Medicare pays. So when someone starts doing that these mfgs try and protect their cash cow, so they stifle anyone attempting to do that so they don't have to lower the price they sell these to Medicare.

Then we know this pricing schema is all a scam, they overbill knowing full well that they won't get reimbursed for the billed rate, it is all done to hide the real price from the patient. Insurance and DME's are in cahoots for the same reason.

Well that is wrong. It is why we all have heathcare we cannot afford, it is why our premiums if you do have it are out of control. It should be supply and demand which dictates price and government should never ever get in the business of dictating the price we pay for anything or we end up paying $100 for a toilet seat to $300 hammers.

IF they made these machines Over The Counter, the price would drop by half or more, in fact there is less technology in these machines than found in a antiquated VCR and you could buy those for $100 if you looked, machines for the price of a mask, that is what we need, then all the Brick & Mortar rip-off DME's would have to go back to peddling crutches.

These machines should be OTC just like Prilosec.

AutoPAP machines should be on the pharmacy shelf next to the diabetic supplies, thermometers, pressure cuffs, and humidifiers. Straight CPAP's need to be consigned to museums because they can't auto-titrate and Autopaps can be set to straight CPAP if you prefer. The diagnostic software should be readily available on the shelf next to the autopap. However, like diabetic supplies, your insurance should pay for the cost of machinery and supplies. You're only going to buy it if you really need it. Honestly, who will you harm if patients autotitrate? I can't really see a need for a sleep lab if this is something that can be diagnosed with an in-home PSG. A set of simple videos could make the whole process easy for most people to understand. Wider availability, better public awareness and greater sales should drastically reduce the cost of these machines. And drop the crappy 2-factor smart card encryption. It's useless. Just use an SD card of any size and be done with it. Keep as much data as the card can handle.

XPAP technology needs to be seriously de-mystified. You may quote me on that.

I voted for 3 (cost) since it's just for grins and giggles and it fits my thoughts most closely.

"guest":
> Sometimes this meant selling at $30 or less over their cost of goods thinking (stupidly) that a higher quantity moved would "make up for it." Again, less-than-business-savvy people here.

Who cares? What's your point?

If that internet seller goes out of business, he deserves to. We buyers then buy from someone else. That's what capitalism is all about. Or it's supposed to be.

> Unfortunately the manufacturers didn't immediately realize how irrational certain customers of theirs were being

Irrational? That's BS.! Let's change the product and examine your statement. A person can buy a car from Dealer A (whose store is in a high rent district) for $30,000 or from Dealer B (whose store is in a low rent district) for $25,000. You know where that car will be bought, don't you? I do it. You'd do it too. You probably have. And if dealer B goes out of business because he's not a good businessman, that's OK. And, by the way, let's acknowledge that in some non-zero number of cases Dealer A is the one who goes out of business because, it turns out, he's not a good businessman. His profit margin was _unnecessarily_ high, he was just greedy. That's what capitalism is all about. Not some government sponsored price fixing!

> you and others are so misinformed in this topic

Many of the people in this forum are among the most informed about xpap therapy that you will find anywhere on the planet Earth.

Therefore, the next question is, what is your agenda? Odds are you're some brick and mortar DME that stiffs insurance customers by giving them the bottom of the line cpap model in order to make the greatest profit from your insurance company payment. Now, _that_ I believe.

DreamDiver wrote:AutoPAP machines should be on the pharmacy shelf next to the diabetic supplies, thermometers, pressure cuffs, and humidifiers. Straight CPAP's need to be consigned to museums because they can't auto-titrate and Autopaps can be set to straight CPAP if you prefer. The diagnostic software should be readily available on the shelf next to the autopap. However, like diabetic supplies, your insurance should pay for the cost of machinery and supplies. You're only going to buy it if you really need it. Honestly, who will you harm if patients autotitrate? I can't really see a need for a sleep lab if this is something that can be diagnosed with an in-home PSG. A set of simple videos could make the whole process easy for most people to understand. Wider availability, better public awareness and greater sales should drastically reduce the cost of these machines. And drop the crappy 2-factor smart card encryption. It's useless. Just use an SD card of any size and be done with it. Keep as much data as the card can handle.

XPAP technology needs to be seriously de-mystified. You may quote me on that.

I voted for 3 (cost) since it's just for grins and giggles and it fits my thoughts most closely.

DD,

Think about that one for a minute.
In my opinion, the "insurance" coverage is is what's keeping the prices of these items artificially high. If diabetic supplies (strips) were taken off of insurance coverage, they'd be about 10 cents apiece rather than $1 each. Same thing with XPAP equipment.....take them off of insurance coverage and they'd be selling in "big box" stores (Wal-Mart and others) for about $100 or less.
Right now, you can buy diabetic testing supplies WITHOUT insurance coverage......I have been for the last 3 1/2 years. This year, I started using the Reli-On (Wal-Mart) meters and strips which sell for about half of what Accu-Chek strips sell for. The part that got me pissed was that in order to get a prescription for my strips, I'd have to pay for a doctor's visit. I figured that by the time I took off a day of work, the price of gas and the office visit, I could buy a year's worth of Reli-On strips (I use about 100 per month and that's about $45 per). On top of that, it's hard telling how many other tests the doctors could think up to suck money out of me and my insurance, once they got me in the door. I get a (free) blood draw through my employer each October and the most recent one looked pretty good (2007 was NOT good).

Den

This thread has been really educational for me. Thanks to all our folks who are smart about this stuff. Probably a crazy question in light of all of the above, but does cpap.com ever have "specials" on any of their XPAP machines?

I've been a CPAP user for less than a month now, and I guess I don't know about the MAP policy... I have some general ideas about it from what I'm reading here, but could someone please fill me in? My DME gave me a catalog with the Medicare rules and schedules for replacement, etc. but that's all the information I have. Like some of the other posters, I'm liable to buy supplies out of pocket, as it's often easier.