Hacker News new | ask | show | jobs
by duncanawoods 3588 days ago
I think this is usually because their profit engine breaks rather than being overwhelmed by waste. All big orgs seem to have one part of the business printing money while the rest tries to burn it. So long long as the printer prints, the bonfires burn.
1 comments
wildmusings 3588 days ago
If your competitor can produce the same output with less waste, they can lower prices and take your customers.

This is especially true of health care where there's not much salient differentiation or other dynamics that would naturally produce monopolies.

link
acdha 3588 days ago
That's a very simplistic view: it assumes that the product in question is an easily-compared commodity, the business has low barriers to entry, and that there aren't other factors (long-term contracts, regulatory requirements, natural monopolies, etc.) which would make switching hard.

In the case of healthcare, consider the cost of entering a competed space: nobody is better at everything so you won't have a clear advantage for many patients, the startup costs (time, money, permits, staff, etc.) are massive, people like to keep their existing doctor and won't change without cause, and the complexity of the problem defies simple solutions. You can't save on staff costs without losing in-demand professionals, things like billing are both intrinsically complex and disastrous if you get them wrong, and so are all of the safety and other regulatory compliance issues. You might be able to shave bits here and there but it'll take time, have indirect costs, and it's going to be a modest percentage over time.

link
ZenoArrow 3588 days ago
Only if those competitors can arise. If the established players are all happy to keep their market share and increase profits by raising prices, you won't see the same race to the bottom.

Companies require capital to start. The level of capital to start a company differs depending on the industry. One of the main reasons you see far more startups in IT than in telecommunications (think Verizon, AT&T, etc...) is due to the difference in cost of entry into those markets.

link