Outsourcing inflates medical equipment costs

President Obama recently spotlighted corporations that take their assets and run to a tax-friendly island. It reminded me of a family experience 20 years ago.

My wife had a grafting procedure for a stress fracture. Her surgeon, in order to sandbag his efforts, prescribed a biotechnical bone healing device to assist recovery. It produced good results.

However, the shock came with the bill. At $3,200, of which we paid $640 after insurance, it exceeded our surgeon’s fee for the operation. There was an 800 number stenciled on the little black satchel encasing the instrument. I called, and got Puerto Rico. I asked if they were in a competitive situation. Their answer: “Oh yes, a competitor down the road charged $30 more.” Thirty dollars on a $3,200 price tag? Sounds more like collusion than competition.

Here is a corporation employing inexpensive Puerto Rican labor, probably escaping U.S. taxes, overpricing a product and thus contributing greatly to out-of-control health care costs. Medical equipment costs have been flying under the radar. They are escaping scrutiny. This shouldn’t be.

Recently, I called that same corporate 800 number in Puerto Rico. It was still business as usual.  

Jerry Gregory
IU alumnus