In the US, many states require hospitals to file a "Certificate of Need" before they're allowed to buy a new MRI (or operate a helicopter ambulance service, etc). The reasoning is to prevent overlapping service and reduce costs. But really it reduces resiliency and availability -- if the lone machine in the county is down for repairs, you don't want to be transporting a patient across the state to get a scan done.
Wait - you mean if I start a private hospital, funded privately, owned privately, I might not be able to buy (whatever medical doo-dads I want) for that hospital ?
CON laws are somewhat unfortunate when applied badly, yes, but they don't seem to apply here, which describes GE marketing a MRI machine to hospitals that already have one, so that they don't have to transport patients between floors.
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In the US, many states require hospitals to file a "Certificate of Need" before they're allowed to buy a new MRI (or operate a helicopter ambulance service, etc). The reasoning is to prevent overlapping service and reduce costs. But really it reduces resiliency and availability -- if the lone machine in the county is down for repairs, you don't want to be transporting a patient across the state to get a scan done.
Edit: Found list of states with CON laws: http://www.ncsl.org/research/health/con-certificate-of-need-...
Wait - you mean if I start a private hospital, funded privately, owned privately, I might not be able to buy (whatever medical doo-dads I want) for that hospital ?
You might not even be able to open an emergency department or maternity ward if there is one "close enough" according to the state regulators.
So the solution to high medical costs is limiting the supply?
I guess if it works for rent, it'll work for medicine. </s>
Ironically, the states without CON laws help those that do have them, by allowing increased sales and thus lowering the unit costs.
Gross. Why would I invest R&D into building a dramatically cheaper MRI if I can't make it up on volume?
You raise the price to cover the lack of sales volume and spread your fixed costs over fewer machines.
I'm not saying every Walgreen's & CVS pharmacy in the country should have one, but it wouldn't be hard to imagine the "Quick-Med" places having them.
CON laws are somewhat unfortunate when applied badly, yes, but they don't seem to apply here, which describes GE marketing a MRI machine to hospitals that already have one, so that they don't have to transport patients between floors.