Uncovering the Sleep Apnea Industry – Medical Equipment Costs

In my previous article “I don’t sleep well anymore… I Snore. Do I have Sleep Apnea? Do I need a CPAP Sleep Machine?“, I discussed my current sleep issues and my desire to sleep better.

In this post, I will begin to discuss and express my opinions on what I have discovered about the medical sleep industry.

My obvious frustration with the medical industry in this post stems from my complete inability to allow myself to overpay for anything.  I am, to the complete annoyance of my wife, never a person that just goes with the flow. I always have to know what I’m paying for and whether or not there is a lower cost alternative. This is especially the case when it comes to higher ticket items like a CPAP sleep machine.

When I decided to look into solving my daily fatigue issues, which I’m sure are a result of my poor sleep, I started by looking at what seemed like would be the bulk of the cost of the solution… purchasing a CPAP machine.

I did a quick rudimentary Google search and found that the better quality machines are priced somewhere in the area of $800 – plus or minus a few hundred dollars.

Having gone to college for electrical engineering, when I look at one of these devices, all I see is a small air pump hidden inside a shiny plastic box. The box has a read-out display and there’s a couple of tubes emanating from it. Thus, with my technically educated vantage, I am blown away by their high cost.

Now, I realize that a lot of engineering goes into making one of these devices, but from what I know about economics, the prices are inflated because of the restriction on demand.

The federal government has classified CPAP machines to be sold as medical devices and thus a prescription from a doctor is required to purchase one.

Therefore the supply is restricted because you can’t just go to Walmart and purchase one. You need that medical permission slip to get one.

In manufacturing and sales, anytime a lower quantity of something is sold, the price is higher.  Thus, due to medical restriction, fewer people are going to buy a CPAP medical device and that drives up the price.

Personally, I believe that if you could walk into Walmart and purchase a CPAP sleep machine, the cost of the machines would easily be under $200.

Interestingly though, through my research, I discovered the machine itself is not solely the biggest expense.

Where I have to believe the industry makes its a lot of its money is in the wear-and-tear items that need to be replaced: the filters, masks, and tubes. Those inexpensively manufactured parts, which virtually cost pennies to make, are sold at unbelievably marked-up prices.  On the cheap end, a plastic tube sells for around $10, and 0n the higher end, a plastic tube with rubber ends and some metal wire that creates a little heat goes for over $30.  And these things need to be repurchased and replaced as often as every 3 months!

And then there are the plastic face masks!  We’re getting into Nike pricing territory there!

Anyway… I’ll digress from this mostly worthless rant.  In my next article, I’ll discuss what I learned about the costs of having a CPAP sleep study done.


How I Manage My Own Retirement

I have always been a do-it-yourself type of person, which has always included managing my own savings and investments.  I've been successfully investing in the stock market for almost 20 years and beyond my personal blog, I also write another blog from the perspective of a father and family man about how I invest for the long term.

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