How can National Health Care lower Costs when they can’t even Buy Computer Equipment at Competitive Prices?

Posted by PITHOCRATES - May 13th, 2012

Week in Review

The problem with national health care?  There is only one buyer in the market.  The government.  And whenever you have only one buyer you’re never going to get the best price (see NHS pays ‘extortionate’ 328 per cent mark-up on printer parts by Christopher Williams posted 5/11/2012 on The Telegraph)

The NHS is paying “extortionate” prices for basic computer equipment and services, with dealers collecting profit margins of up to 328 per cent, a study has found…

On average, at central and regional levels, the NHS buys computer services and equipment at 28 per cent more than their wholesale price, compared to the best average in the private sector of only 3 per cent, said Mercato, a firm which tracks government and commercial IT procurement. As well as basic items this includes expensive equipment such as servers, and software.

These are things they know they are paying extortionate prices for.  Because there are other buyers for these things in the private sector.  And they can see what they are paying for these same things.  It didn’t stop the NHS from getting ripped off.  But they could tell they were being ripped off.  By the prices people were paying in the private sector.  Of course, these people aren’t buying hospital equipment, medicine, supplies, etc., that only the NHS uses.  And they buy these things in a market where there are no other buyers competing for these.  So there is no incentive to lower prices at all.  So if they’re paying 328% profit margins on computer equipment and services you know they are paying at least 328% profit margins on everything else they buy.  Or far, far more.  Because who’s going to know except the seller?

If this is happening in the NHS you know it will happen in Obamacare.  Every supplier in the Obamacare system will be looking to take advantage of some unaware bureaucrat.  Or bribing one to allow extortionate prices.  Because that’s the way government works.  It always has.  And it always will.  Only with Obamacare we’ll be sacrificing the quality of the U.S. health care system in the process.  For all the graft in the system will leave even less funding for health care services.  Because this graft will be new.  Unlike the private insurance companies that are now a pain in the ass to everyone that has to deal with them.  But you have to give the private insurance companies this.  They don’t pay extortionate prices.  Which has kept health care costs under control so far.  At least, as best as anyone can.  And far better than Obamacare will.  Just wait and see.


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