The CPAP industry is as bad or worse. Here are the drivers I see:
1. FDA -> Medicare -> Private Insurance. They set the reimbursement codes and what each code will pay. On the internet, you throw up a website and the customer decides if your approach has value. With a pay per code system, anything outside of the sanctioned approach is either puts you at legal risk ("you aren't allowed to do this, it is not sanctioned") or financial risk ("thanks for the better way, but it disrupts money flow X in the system, so we're not giving you a reimbursement code").
2. The "Insurance is better" customer bias. The average consumer of healthcare expects to show up, slap their insurance card down and receive treatment. This abstracts them from being the direct payment entity of the services they provide. If you piss off the patient but provide the service to code, then the insurance company will pay. If you please the customer but go outside the payment structure, the insurance will not pay. Businesses get paid.
3. Regulatory and bureaucratic haze. Go to a CPAP trade show some time, it is a different world. No one is focused on improving technology and services for the CPAP user. They want to get together and lobby to prevent reimbursement cuts. They want to make sure the business they run stays good with the new regulations and can survive the next wave of audits. They do not shop machines to find what works for the patients, they have too many other stakeholders to please: referring physicians, insurance payors, what their front lines people have experience setting up. They are an extension of a giant that has far more control and say about their own business than they do. They fight back or buck the trend, they are literally audited out of business or worse.
4. Talent Deficit. There are very few places to innovate and if you find a line and do it, you have to fight the system hating you for doing it on top of the normal startup pains. It takes very special people to want to walk that road with you. For the bigs in the industry, mfgs and large insurance based sellers of equipment, their HR departments are hiring for technical positions based on resume check boxes and history with microsoft. The products they put out are heavily windows, heavily compliant, fearful of making waves with any stake holder. You can't build a better one and win because you won't get paid and don't have a network to leverage. People who could come in and really make bold moves get on the ground, see the reality and leave to do something easier.
"2. The "Insurance is better" customer bias. The average consumer of healthcare expects to show up, slap their insurance card down and receive treatment. This abstracts them from being the direct payment entity of the services they provide. If you piss off the patient but provide the service to code, then the insurance company will pay. If you please the customer but go outside the payment structure, the insurance will not pay. Businesses get paid."
THIS. Combine this with the fact that most consumers receive insurance through their employer (and expect this too) further abstracts them from being the payment entity.
1. FDA -> Medicare -> Private Insurance. They set the reimbursement codes and what each code will pay. On the internet, you throw up a website and the customer decides if your approach has value. With a pay per code system, anything outside of the sanctioned approach is either puts you at legal risk ("you aren't allowed to do this, it is not sanctioned") or financial risk ("thanks for the better way, but it disrupts money flow X in the system, so we're not giving you a reimbursement code").
2. The "Insurance is better" customer bias. The average consumer of healthcare expects to show up, slap their insurance card down and receive treatment. This abstracts them from being the direct payment entity of the services they provide. If you piss off the patient but provide the service to code, then the insurance company will pay. If you please the customer but go outside the payment structure, the insurance will not pay. Businesses get paid.
3. Regulatory and bureaucratic haze. Go to a CPAP trade show some time, it is a different world. No one is focused on improving technology and services for the CPAP user. They want to get together and lobby to prevent reimbursement cuts. They want to make sure the business they run stays good with the new regulations and can survive the next wave of audits. They do not shop machines to find what works for the patients, they have too many other stakeholders to please: referring physicians, insurance payors, what their front lines people have experience setting up. They are an extension of a giant that has far more control and say about their own business than they do. They fight back or buck the trend, they are literally audited out of business or worse.
4. Talent Deficit. There are very few places to innovate and if you find a line and do it, you have to fight the system hating you for doing it on top of the normal startup pains. It takes very special people to want to walk that road with you. For the bigs in the industry, mfgs and large insurance based sellers of equipment, their HR departments are hiring for technical positions based on resume check boxes and history with microsoft. The products they put out are heavily windows, heavily compliant, fearful of making waves with any stake holder. You can't build a better one and win because you won't get paid and don't have a network to leverage. People who could come in and really make bold moves get on the ground, see the reality and leave to do something easier.