Wheelchair users have no bargaining power against wheelchair makers.
Car buyers have leverage.
Normally this exorbitant price would incentivize competition in a healthy market, but the private equity players presumably make that difficult. There might also be barriers to entry in the market.
> but the private equity players presumably make that difficult
There's no reason to think this is true. Unless the barrier to market entry is access to huge amounts of capital, it should be no different than if the entire space owned by mom and pop shops.
PE shops are great targets for being the “bad guys” in whatever situation, of course they are no different than your run of the mill investor or founder when it comes to greed.
I'm feeling it's not the full story here. Presumably it shouldn't be extremely hard to produce a wheelchair, right? So why aren't there more people trying to get in this business?
It’s more the divorce between the receiver, the seller and the buyer. Sellers are not selling to the people using the wheelchairs, they’re selling to insurance companies and the government. Both types of entities have a proclivity for overpaying.
This is also true for most drugs. If we removed private insurance companies, Medicare and Medicaid in their totality from the equation, the market rate for drugs and medical equipment would drop into the abyss compared to where they’re at now.
You also need the unreasonable barriers to entry for the scam to work. Otherwise new entrants would still drive down the price. So the FDA is doing its part to keep prices high.
Consider the public schools. You have the customer (the students), the buyers (the taxpayers) and the service provider (the teachers), which are accountable to neither.
Define "accountable"? If a teacher does something awful to a student (e.g. sexually harass them), a taxpayer-funded entity (the school board, the police, or the courts depending on the severity and what happend) will reprimand the teacher.
With something less egregious like "giving a the students a bad education", we still have some level of accountability based on standardized testing and school funding. Standardized testing is far from perfect, and it can be an example of Goodhart's Law, but it's still accountability.
The schools' poor performance relative to private schools is a strong signal of lack of accountability.
Another signal is the firing of teachers for incompetence is practically non-existent.
A third signal is anytime someone from the school talks about solving issues, they always always always put it down to lack of funding, and the credulous journalists repeat that unquestioningly and the schools get their tax increase.
A fourth signal is repeatedly lowering the requirements for a diploma.
A fifth signal is getting rid of "high stakes testing".
lol. The teachers have very little say in anything. The service provider is the school board and the administrators, the teachers are just like an instrument they operate as they see fit.
There have been a lot of acquisitions and rollups in this space. We have regulations against this, but they are not enforced, and the VCs have the money to push through this layer anyways.
It's both.
The US lacks serious competition in _most_ of it's industries right now.
Weirdly, not really in the US. The regulations are all a little pointless because it's a "self-regulated" industry. Look at the cyber truck - stuck floor pedals and trunk closer that cuts off fingers, or trivial to clone car fobs.
It's not surprising that a nearly bespoke vehicle would cost more than, and be less reliable than, a mass produced one. Just think of the engineering resources invested in the two vehicles and in their manufacturing processes.
Ya this reminded my of a Palmer Lucky interview where he explained how the prices are created. Can't remember off the top of my head but there was substantial incentive to build with the most expensive materials, doesn't seem like the case here though.
From a friend who is a Navy engineer this is apparently on purpose is done as a form of economic stimulus. Overpay 10x for things to support the local economy around the base.
Car buyers have leverage.
Normally this exorbitant price would incentivize competition in a healthy market, but the private equity players presumably make that difficult. There might also be barriers to entry in the market.