I realize that there are huge costs for those companies that manufacture medical equipment in the first place, especially in R&D activities. However, what determines a different price between, for example, an MRI machine (that can cost $3 million) and a Mammography machine (around $50k)?
These prices come from a quick Google search and may, therefore, have to be contextualized.
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Applying for and receiving FDA approval costs a fortune, on top of what you already mentioned.
It is a bit like why do equipment used in space cost so much they are specialised and have to work to higher tolerances than normal equipment because there are major problems if they malfunction.
Eli5: You are going to inflate a ball to play with your friends. You promise to spend all this work pumping the ball so your friends said they’ll give you a share of snacks they saved for lunch. You’re the only kid whose parents have a pump and you realize that you HAVE to make sure it’s inflated just enough where it’s hard enough to play with but soft enough where it doesn’t hurt to catch it or your friends will get mad at you. If your friends get mad you, your parents will stop letting you use the pump and another kid will have to ask their parents for a pump. You spend so much effort and are the only kid with a pump right now so all your friends say take however many snacks you want.
TLDR translation: Equipment manufactures need a license from the government to make sure their equipment isn’t risking patient lives. Because one fuck up takes away a license, there are very few companies that make equipment and so they have a monopoly on the equipment and the prices they charge. This is (supposedly) fair because there is a lot of expensive research involved to make sure the equipment is within regulation and doesn’t violate the license.
Edit: made more readable and easier to understand
Other reasons are size and complexity. A mammogram machine is “just” a basic xray machine, whereas an mri machine must be large enough for a patient to fit into the torus and the huge mass of spinning sensors needs to be cooled with cryogenic fluid. The mri room must also be built with special shielding and nonferrous materials due to the magnetic fields produced during the scans.
Hospital equipment is also designed to be safe and not cause harm to human life. Equipment power supplies and batteries are tested and certified to not catch fire while charging, must be tested regularly to ensure they haven’t degraded and will cause a hazard to hospital staff and patients. The equipment also has other safety features like low smoke emited by burning plastics, no sparks that could ignite oxygen being use by patients, design requirements like no crevices or gaps to trap pathogens or contaminants, etc.
Doing something is cheap. Doing something reliably is not. Doing something safely is not cheap either. Doing something reliably AND safely is insanely expensive.
Any machine gets more expensive when you need it to work under high pressure and even more when they need to be idiot proof. MRI machines needs tons of safety to ensure that if someone brought some metal they don’t die. The machine need to always work, cause you can’t easily replace them. Other machines that can afford to be less safe (because there is less risk to begin with) will be significantly cheaper.
An **additional reason** most other answers here omit is medical equipment sold to western doctors and hospitals and other wealthy customers and when products are sold to the wealthy those customers are able to pay higher prices and have high standards.
Doctors and hospitals earn what they earn because when you need their services you need their services. For example what will you not pay to save your life or the life of a loved one?
Use of medical services can be high without making the population overall healthier / longer living so in places that have government run healthcare attempts are made to contain the cost of healthcare by limiting the supply and forcing triage — hence waiting times can be long.
When healthcare is not run by government waiting times can be short but the high costs of healthcare gets passed on to you as high insurance premiums and large medical bills if you fail to purchase medical insurance.
The answer isn’t always cut-and-dry, as companies will charge as much as they believe they can. So if you have a unique, patented product, it will be more expensive even if the technology and manufacturing isn’t expensive. Remember that the market isn’t big either, and they want to make a yearly profit. So they charge accordingly. And the hospital doesn’t have much choice, there’s only a few of these manufacturers out there.
But in the specific example of mammogram vs. MRI, it really is simple.
A mammogram is just a specialist x-ray. Century old technology. Well understood technology, relatively easy to make.
An MRI is a high tech machine that uses liquid helium cooled superconducting magnets to measure magnetic fields of individual atoms. It’s just so much more difficult to build, and the materials themselves are magnitudes more expensive.
It’s like comparing a Spitfire to an F35. Yeah, they’re both TECHNICALLY just fighter planes.
There are multiple factors.
1. Standards. How precise it has to be built etc. So if you need a 10 inch steel bar as a part of the machine the price grows exponencially with precision. The more complex and precise a machine is the more expensive to make it.
2 safety. MRI machine has heavy, fast moving parts. If an MRI machine malfunctions, it can kill people. If an xray machine malfunctions they can give off lethal dose of radiation. And the price tag for the solutions of those safety problems are on a very large scale.
3 demand. If there are 2 different machines but with the same R&D cost. They simply have to charge more for the product they sell less pieces of.
4 supply. If the producion takes a lot of time and there are a waiting list, customers will pay more just to get one faster if they need one.
5. Capitalism. If you have the “how to” and no one else has you can sell your product for any price you want.
6. Transport and set up costs. Some machines are heavy af. and delicate af. at the same time. And for warranty reasons, hospitals cannot just put them together for themselves.
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