The econonmics of ASV

Interesting thread!

(I haven't posted here in a few months)

To address last things first, in the previous post, you will see a lot of adjectives being used to describe the products and services being offered. To single out one, for instance, the butcher, the real goal is to sell 'meat to consumers and make money in the process'. The social benefit here is that most everybody eats meat, and therefore there is a market for it. And as wel all know, there is a clearly identifiable supply chain from cow to steak. Everybody along the way makes money turning that cow into a steak. Ultimately though, you need to make consumers (who usually have a lot of choices where to buy meat) buy their meat from you, with all the supply chain markups, including your own. And, you want your markup to be as high as possible, because you make more money (given a constant sales volume) if your markup is higher. In order to get that higher price (because of your higher markup) you need to want consumers to think you are getting a better value. By using the term 'quality meats' (and there really is such a thing. But for the most part, dead cow is dead cow at the end of the day), and 'discriminating customers', you are making the customer 1.) think they are getting a superior product, and 2.) massaging their ego by making them think they are discriminating.

You see the same thing with CPAP machines, even ASV units, as the manufacturer wants to sell more of them. And you can bet there is plenty of markup on these sophisticated machines. Most every one of us posting here is an ASV user, and we all know the specific benefits ASV provides for us. But not being altruistic, the manufacturers of these machines know there is a small, specialized markup for these machines. But development costs aside, they know there is an opportunity here to make a lot of money, and they do.

Although there is certainly some altruism that goes into the developing and sales of ASV machines, there is definitely a feeling among the manufacturers that there is money to be made. And so these machines can be readily purchased (with a prescription here in the US). When an item is needed, but there is no profit opportunity, then the government ends up buying it for those that need it (often with much red tape in the process, and even bigger profits for those that know how to 'play the government').

Technically, there is some difference in these machines from the 'normal' CPAP/APAP machines. The Respironics machines use a high speed shutter valve to rapidly control pressure. The Resmed machines (at least the last generation) use a high performance blower that can be quickly controlled (probably by brute-force blower motor driver electronics). Both add to material costs, but not enough to explain the prices of these machines.

One thing manufacturers like these days is to make a single piece of hardware, and then sell you 'code' that will make that hardware do more things, without changes to the hardware. If they could build a 'universal machine' (one that went from straight CPAP to AASV/AVAPS, etc.) with no hardware changes, they probably would. Then, the functionality could be made available by software license. This would drive production costs down substantially. It may also be a possibility someday that a midified ASV algorithm would work well enough that it could cover a wide range of SDB conditions, without the need for complex setup. This would benefit everyone with SDB, by substantially reducing the cost of CPAP/APAP/ASV.

Finally, I question what was said about ResMed's goal of eventually marketing through chain stores. They are famous for theirt anticompetitive, anti-consumer marketing practices. Even my DME doesn't like them, and only dispenses them with a DAW prescription. They have given our site sponsor, CPAP.com a hard time over the years in their path to try and make everyone along the supply chain milk as much money from the consumer and their insurance, as they possibly can. I don't use any ResMed products anyomre because of their anti-competitive price-fixing habits.

timbalionguy wrote:Interesting thread!

(I haven't posted here in a few months)

Good to see you!

VVV wrote: Of course fulfilling consumer demand (What other kind is there?) is equal to social benefit.

You seem to have missed the non-beneficial kinds that broke your initial argument in red text. Here they are again:

-SWS wrote:Before moving on to legal vice, let's take the example of illegal vice: the heroin industry. A heroin dealer's primary goal is to make money---NOT to benefit society. That heroin dealer invests capital primarily to fill a self-defeating consumer demand toward capital gain. He is more than happy to make money on the demise of others. He is not primarily occupied with benefitting society.

Okay, let's move on to legalized vice. Does anyone think the tobacco industry is PRIMARILY occupied with benefitting society? It's entirely possible to fulfill a consumer demand that is largely counterproductive.

Employing the constructs of logic: If capital investment occurs without social benefit (it frequently does), then social benefit is clearly not required. The heroin industry still thrives, as an example. So does the tobacco industry.

At this point I should point out that the legal system and capitalism are two distinctly separate social mechanisms. That law necessarily intervenes, to compensate the economic mechanism, does not exempt those occurences from being capital-investment scenarios. None of those scenarios you tried to dismiss ceased to be capital-investment scenarios, VVV. Rather, they demonstrated a variety of pitfalls inherent to capitalism as a social mechanism.

Of course social benefit is a FREQUENT byproduct of capital investment. But capital gain is ALWAYS capital investment's primary goal----whether people elect to pursue that goal ethically or unethically.


P.S. I still wear Skechers.

.

Hi SWS

-SWS wrote: I fail to see . . .

Indeed.

Let me try another approach.

1. I don't doubt that sleep apnea exists.

2. What I do doubt is the wisdom of putting the Sleep Medicine Business at the helm of our solution.

.
________________________________________________________________________________________________
.


Hi VVV!

You know that I like you.

So, I hope you take it as a compliment when I say that I believe that you are a dying breed: an American Business Romantic.

Imho, hopelessly fixated on what was and not on what is.

.
________________________________________________________________________________________________
.

VVV wrote:I suspect this view of capitalism comes not from experience in/with business but from the portrayal of businessmen by Hollywood and TV

And I suspect you live in a little town.

(and sure enough:)

VVV wrote:if I go through my little town and ask . . .

I knew it!

.
________________________________________________________________________________________________
.

VVV wrote:none (of your small town businesses) think their primary business purpose is to make money.

And that is why they are being swallowed up by the likes of Walmart.

Like a Blue Whale feeding on krill.



.
________________________________________________________________________________________________
.


VVV, I've been in business since I was 17. I am now 56.

Over those many years, it has been my experience that as you move up the CEOs and CFOs that inhabit the upper rungs of the Fortune 500 ladder, you'll find that their true mission statement is simply this:

1. To make as much money as possible.

2. To make it as quickly as possible.

3. To do so by any means necessary.

.......


Such a clear, clean mission statement is personified by my good friends, partners and associates who toil on what is known as the financial district: at Fitch, at BOA, and last but not least, at the much maligned Goldman.

They understand that they have but one business: to make money. Period.

To think otherwise . . . is to guarantee that you'll soon be unemployed or out of business.

Not the world I would want for my children, but the world as it is, imho.

.
________________________________________________________________________________________________
.


Hi timbalionguy, glad to make your acquaintance.

timbalionguy wrote:Finally, I question what was said about ResMed's goal of eventually marketing through chain stores.

Doctors, sleep labs, RRTs and DMEs are unreliable (and expensive) gatekeepers.

And thus, not part of ResMed's final solution, imho.



.
________________________________________________________________________________________________
.

timbalionguy wrote:
They are famous for their anticompetitive, anti-consumer marketing practices.

They have given our site sponsor, CPAP.com a hard time over the years

. . . try and make everyone along the supply chain milk as much money from the consumer and their insurance, as they possibly can.

I don't use any ResMed products anyomre because of their anti-competitive price-fixing habits.

That's why we love them on the Street.

F*ckin' Aussie Crocs they are.

Now, if only I wasn't an sdb patient, I could . . .

learn to stop worrying, and love da bomb.

.
________________________________________________________________________________________________
.

-rocklin wrote:A pap with every nap©.

Mr Bill wrote:An ASV for every ADD©

-SWS wrote:Eyeglasses for the masses©.

-SWS wrote:A bedpanny for every fanny©.

That does it.

One more and I'm going to start a separate thread.

Go ahead: some wise a$$, I dare you: make my day.

.

rocklin wrote:.

-SWS wrote: I fail to see . . .

Indeed.

Let me try another approach.

1. I don't doubt that sleep apnea exists.

2. What I do doubt is the wisdom of putting the Sleep Medicine Business at the helm of our solution.

I'm sorry but that post comes across as being equally vague and equally insinuating. So far I gather that you are trying to prevent a social conspiracy or other sociopolitical ill-deed related to sleep medicine...

Would you mind clearly stating WHO should be at the helm of our solution? Also, would you mind clearly stating WHAT the problem is that goes with that solution? Thanks.

.

SWS, no disrespect, but I think your problem in this thread stems from living in your head, and working out the solutions from there.

-SWS wrote:A heroin dealer's primary goal is to make money---NOT to benefit society.

And you know that how?

Have you ever met a heroin dealer, either on the retail or wholesale level?

If you had, you'd know that in real life (not inside your head), their reasons for being in that business can be incredibly varied.

And some of them do believe that they benefit society.

.
________________________________________________________________________________________________________________
.

-SWS wrote:Would you mind clearly stating WHO should be at the helm of our solution?

My answer is . . .

You.

You must be at the helm of your own solution.

.

SWS, let me ask you this:

What were you doing when the towers collapsed and 2,752 people died?

Do you remember?

rocklin wrote:

-SWS wrote:Would you mind clearly stating WHO should be at the helm of our solution?

My answer is . . .

You.

You must be at the helm of your own solution.

That matches what people on this message board have advocated from day one. The good news is that CPAP machines being dispensed at local pharmacies don't jeopardize that---nor do they amount to a totalitarian society just around the corner.

Good luck to you in your sleep apnea treatment, Rocklin. I'll ignore your gratuitous remarks per usual.

Oh, I grew up in a high crime area and interpersonally conversed in social circles that included murderers and drug dealers. Forget that I went on to formally study the subject matter. True.

.

-SWS wrote:That matches what people on this message board have advocated from day one.

Agreed.

But for the vast majority here, it seems "seize the night" really means fully accept your fate as married to this beast, then seize control of your xPAP therapy.

A classic example is the reaction to chopper999 in what I consider the most telling thread I've seen since I've been here:

viewtopic/p650470/FREEDOM-From-Apnoea-A ... hine-.html

So many here seem to have an emotional investment, almost a love affair with their xPAP.

I know I do.

Seductive little bitch.

And the boys at ResMed couldn't be happier.

Can't wait to introduce the lil face hugger to the population as a whole.

No "conspiracy", just good old ambition.

If that's the future you want, SWS, you can have it.

.
_________________________________________________________________________________________
.

-SWS wrote:Good luck to you in your sleep apnea treatment, Rocklin. I'll ignore your gratuitous remarks per usual.

Thanks, SWS.

Sorry about the gratuitous stuff.

-SWS wrote:Oh, I grew up in a high crime area and interpersonally conversed in social circles that included murderers and drug dealers.

"Interpersonally conversed"?

Is that like talking to them?

-SWS wrote:Forget that I went on to formally study the subject matter. True.

And yet for all your formal study, did you ever have a heart to heart with a drug dealer whose main motivation was to get his kids out of the projects?

Or a former addict who was tired of the sh*t they typically cut his drugs with and wanted to proudly produce a quality product?

As a youngster, I was into the drug scene, and I've had heart to hearts with people in that scene.

Equally, as a middle-aged man, I had to form personal relationships with the upper management of a number of financial services firms.

In my experience, there's no comparison. The drug scene folk are much more emotional about money and the value of life.

It really hurts them to terminate a colleague.

True.

.

.

gvz wrote:
How about:

A soul for a troll. ©

Pretty good, kinda catchy.

Sorry, but it's nearly 2 am EST, and I don't have the energy to make a separate thread.

Where's mars when you need him?

Haven't seen him post for a while now, hope he's OK.

Lights out, kids.

roc

.

I'm still going through the thread, but once you include regulatory compliance , bringing a new device to market probably cost 5 million dollars or so. Updates to a product are likely to cost a fraction of that, say $600,000 - $1,000,000. Recouping that on a smaller market leads to higher prices. Add to that the difference in consequence between ASV and CPAP failing, increased testing, better manufacturing, etc etc etc... and you end up with a much more expensive device. What I don't understand is why there are base level CPAP devices from manufacturers of higher level devices(Bipap, auto pap, etc..) The cost savings of having just two lines, CPAP+, and Ventilator, should allow the prices to come down almost to where the lowest end model is.

timbalionguy wrote:...
One thing manufacturers like these days is to make a single piece of hardware, and then sell you 'code' that will make that hardware do more things, without changes to the hardware. If they could build a 'universal machine' (one that went from straight CPAP to AASV/AVAPS, etc.) with no hardware changes, they probably would. Then, the functionality could be made available by software license. This would drive production costs down substantially. It may also be a possibility someday that a midified ASV algorithm would work well enough that it could cover a wide range of SDB conditions, without the need for complex setup. This would benefit everyone with SDB, by substantially reducing the cost of CPAP/APAP/ASV.

Microsoft beat you to that business model. You buy any lower version of windows 7 retail and install it. You can instant upgrade to whichever version you are willing to pay for because its already there on your PC.

rszasz wrote:I'm still going through the thread, but once you include regulatory compliance , bringing a new device to market probably cost 5 million dollars or so. Updates to a product are likely to cost a fraction of that, say $600,000 - $1,000,000. Recouping that on a smaller market leads to higher prices. Add to that the difference in consequence between ASV and CPAP failing, increased testing, better manufacturing, etc etc etc... and you end up with a much more expensive device. What I don't understand is why there are base level CPAP devices from manufacturers of higher level devices(Bipap, auto pap, etc..) The cost savings of having just two lines, CPAP+, and Ventilator, should allow the prices to come down almost to where the lowest end model is.

Hmmm, for the $4000 they cost to the DME they only have to sell a couple thousand of these ASV's if they have any sort of decent markup which I am sure they do. I Googled an estimate for SDB world wide and its ~40 million people.

If ASV users are ~1 in 500 then that would be ~80,000 ASV users. Lets see times $4000 (DME discount) that would be sales of ~$320 million with a further DME markup of ~$320 million. But the ~40 million CPAP users at $400 each could generate ~$16 billion in sales. So, they stand to make 50 times as much money with the less expensive CPAP. I guess we should be glad our ASV's only cost 10-20 times as much.

Then here is an estimate for the SDB population in the USA.
"We estimate that 2 percent of women and 4 percent of men in the middle-aged work force meet the current minimal diagnostic criteria for sleep apnea syndrome"
http://www.nejm.org/doi/full/10.1056/NE ... 281704#Top

Mr Bill wrote:Microsoft beat you to that business model. You buy any lower version of windows 7 retail and install it.

You can instant upgrade to whichever version you are willing to pay for because its already there on your PC.

And for some time now, Nvidia beat Microsoft: their "Pro" cards are the same old, same old, just flashed with a new BOIS

Too tired to delve into your math, Mr. Bill, I'll take your word for it.

.
_______________________________________________________________________________________
.


Speaking of math, Mr. Bill, I was just thinking:

Chuck Norris thought he had enough guns . . .

.

.

.

.








.

.

.

.

.

.

AND THEN THE ZOMBIES ARRIVED!!!

.

.

rocklin wrote:SWS, let me ask you this:

What were you doing when the towers collapsed and 2,752 people died?

Do you remember?

I was sitting in a living room waiting to walk in to school with a couple friends. We quickly called our friends next door, we were all geologists. I remember seeing the tower start to collapse and saying those people on the ground had better start running, that's going to produce a ground surge cloud like a pyroclastic eruption, and it did. We sat and watched it all on the news then went in to work and started searching the internet for more info.

Oh, that last post. Yeah, I'm tired too. Got to turn in. I am reluctant every night. But gotta sleep. See ya around.

rocklin wrote: If that's the future you want, SWS, you can have it.

I think that's an entirely distorted interpretation of the future for sleep apnea patients.

rocklin wrote: And yet for all your formal study, did you ever have a heart to heart with a drug dealer whose main motivation was to get his kids out of the projects?

I presented a hypothetical case, which is known to be common. You seem to have distorted that hypothetical case, as if it were a universal statement instead. Heart-to-heart discussions with society's most dangerous criminals can be both revealing and congenial. However, psychometric diagnostics commonly reveal an entirely different side. I have had discussions with murderers and drug dealers both before and during incarceration. And I am sympathetic to the plight of many unfortunate individuals who continue to get caught up in some of society's worst problems. Completely irrelevant to the topic at hand: the economics of ASV.

I'm through discussing nonsense about totalitarian sleep medicine. Those who enjoy or believe that, please have at it. Enjoy.

-SWS wrote:I'm through discussing nonsense about totalitarian sleep medicine. Those who enjoy or believe that, please have at it. Enjoy.

Good for you, -SWS. You are too kind, and have too much helpful knowledge, to waste your time on stupid arguments. You haven't posted much lately and it makes me sad to see people wasting YOUR precious time on this kind of thing.

I want to start reading/learning about ASV machines, but when threads take these kinds of turns, I stop reading them. I'm sure there are others that feel the same way.

I truly appreciate all the knowledge and help you have shared on this forum.