From the Mailbag: Sleep Treatment Devices and Dental Implants

Readers complain about possible monopolistic areas.

Welcome to BIG, a newsletter on the politics of monopoly power. If you’d like to sign up to receive issues over email, you can do so here. 

Looking into every market is impossible, but readers are constantly telling me about areas where there is potentially abusive market power at work. Here are two.

The first is sleep treatment devices.

Matt,

Have you ever looked into the sleep treatment industry, or CPAP devices? Like hearing aids, they require prescriptions, physician "monitoring" and other unnecessary, expensive nonsense. These simple electronic devices which should cost 100-200 dollars instead cost 1000-3000 once properly accessorized, Furthermore, they require "trained treatment specialists" who do little or nothing but can increase billings by thousands per patient per year.

My "sleep clinic" was Northwestern Hospital, a reputable institution otherwise. I met with a physician's assistant (not a doctor or sleep specialist) for ten minutes who sent a sleep test home with me. I returned it via UPS and days-later got a 5-minute phone call giving me a thumbs up for a sleep therapy device. There was no discussion about me, why I didn't sleep, if I wanted a CPAP device, or if multiple factors where at play. Instead, they checked off the boxes for insurance approval, ordered me a device, and clapped their hands in completion. 

Fulfillment is handled by the treatment specialists, a third-party company with a "relationship" to the clinic. Accessories use proprietary connectors and cost 3x their standard connector competitors. They also require a prescription to purchase, which means that buying a CPAP compatible power brick requires $400 to the third-party fulfillment provider, and $100 to the clinic for an on-site or telemed visit - even though the same battery pack costs $100 with a different connector.

I entered the system looking for a solution to my poor sleep, and came out of it no smarter but with a plastic spider to sit on my face. It's the typical formula of a service-provider/vendor partnership existing only because it is shielded from competition by a government enforced monopoly.

Curt

The second is dental implants.

Hello Mr. Stoller.

I am not sure if you have covered this already, but I wanted to mention dental implants and if you know of any anti-competitive tactics in this field.

I need 2 implants, and the cost for both in the New York metro area is about $7000.

I am not expecting it to be dirt cheap, but this seems a bit excessive and is out of reach for many. Most dental insurance usually covers about $1000 per year, so that helps a little but not much, and it seems like the cost is about the same just about anywhere you look in the area.

I know dentists make serious money, and I am not against that, but I can't help but feel like something fishy is going on with this and many types of dental work, similar to dealing with medical providers and insurance.

Thanks for reading.

- P

If you know anything about these industry sectors, let me know.