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The Misalignment Problem of the DME Industry – Erik Kondo

Recent developments in artificial intelligence have brought to the forefront the issue of the Misalignment Problem. The concept is that even through Artificial Intelligence has brought tremendous benefits to humanity, there will likely come a time when the interests of AI and human beings are no longer aligned. In this case, what benefits AI might not benefit, or even worse, could be detrimental to the human race. If at such time, AI has developed more power than human society, humanity could be eliminated. Remember the Neanderthals? They did not fare so well relative to Homo sapiens. The history of the Earth has shown that the combination of an imbalance of power combined with competing interests doesn't ever end well for the weaker entity.

Look no further than the realm of commercialized assistive technology to see an example of this misalignment in real time. The primary motivation of the Durable Medical Equipment (DME) industry is to create financial gain for the companies involved. On the other hand, the people who use DME devices require them to maintain and improve their quality of life. The real power in this relationship resides in the hands of the DME industry, not the consumer. It is the DME industry that decides what devices to manufacture and sell based on the product’s forecasted profitability, rather than its usefulness to the consumer.

DME companies make the most amount of profit when they sell the highest margin products. These high margin products tend to be expensive to purchase, maintain and repair. They also need to be covered in large part by insurance companies. These are the type of products that are mass produced and heavily marketed to the Disability Community. Unlike able-bodied consumers, people with disabilities have little say in the DME products that are made available to them. The result is that the users of DME have no choice but to use the devices that the DME industry decides to produce and sell to them. The DME industry drives consumer demand with slick marketing campaigns stressing how their expensive product is "medically necessary" or "life changing". Little do most of the users of DME realize that they are actually lifetime "cash cows" for the DME Industry rather than valued clients.

The "worst" customer for the DME industry is a person with a slight disability. Since they are typically seen as not really "needing" DME devices (regardless of the real life benefits provided). Therefore, insurance companies will not pay for the purchase of DME equipment for them. Thus, they are budget conscious customers who must pay for products with their own funds. They are looking for value.

As a rule of thumb, the larger the degree of disability, the "better" the customer for the DME Industry. The more "disabled" a person is, the more expensive assistive technology devices insurance companies will pay for. The more dependent the person is on the DME Industry to live their life, the less alternative solutions they have. The result is the DME Industry’s power to sell them expensive (high margin) products rather than affordable (low margin) options.

The second worst customer for the DME Industry is an uninsured person with a disability. This person may desperately need DME devices to live but may have only minimal means to pay for it. Such people are unlikely customers for high margin products. Therefore, the DME industry has little incentive to design and produce economical DME devices for them. Ever wonder why it is so hard to find inexpensive, yet highly functional manual wheelchairs in the US? Those types of wheelchairs have low profit margins, so there is no financial incentive to produce and sell them.

The Misalignment Problem results in the lack of production of DME devices that are designed to create the greatest improvement of quality of life for people at an affordable cost. Such devices would also be inexpensive to purchase, maintain and repair. The Misalignment Problem results in DME products that are designed with a One-Size-Fits All approach. In order for products to be used by the largest pool of customers, they are made to fit all, yet function well for none. The Misalignment Problem results in a lack of DME innovation for devices with low amounts insurance reimbursement, and an overabundance of DME innovation for devices with high amounts insurance reimbursement. The Misalignment Problem greatly disadvantages people with disabilities.

Until the Disability Community is able to manifest more power in the pricing, design and production of assistive technology, this Misalignment Problem will continue to benefit the DME Industry over people with disabilities with an ever increasing negative effect.


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