The cost of Assistive Technology
Now, let’s look at a section of Assistive Technology for ease of argument – Communication devices (AAC). Using a computer tablet with software to select words and phrases to communicate with.
As with many arguments, there are always at least 2 camps. Those for the prices being high and those against.
The argument for High Prices – The true cost of a product
The argument centers around the fact that there is a smaller market for the companies to sell to. However, the companies still have overheads to pay for and therefore they have to make more profit from each unit sold.
Here’s some maths:
There are roughly 60 million people living in the UK. A report provided for the NHS reckons around 6,000 people would be able to use communication devices to enable them to talk.
Let’s assume that on average a household contains 4 people. That’s roughly 15 million households.
A company providing communication devices therefore has 0.0004% of the potential market than a mainstream product e.g. a television or even a computer. If the companies then sold their products to 50% of their markets and made £50 profit on each item, then the profits would be £150 thousand for the communication device company, whereas a television company would make £750 million. That’s 5,000 times the profit.
£150 thousand may sound a lot of money to most, though when accounting for wages, tax, premises, marketing and so on, £150 thousand is pittance. That’s why they need to price the communication device with more than £50 profit. Now, £1 thousand profit on each item will turn £75 thousand into £3 million profit. Much more attractive.
There is still a sizable amount of research and development to go into the communication device, mainly at the initial development stage. As time goes on, you are looking at the cost of tweaks and enhancements to the product.
I think we can’t really go against the numbers mentioned in the ‘For’ argument. Yes they do make assumptions along with very large numbers. However, the argument gets weaker, the longer the product is out there.
I mentioned the sizable research and development costs earlier. This is true. However, once you have something fit for purpose (it works), then you’re mainly looking at updates. So the initial research and development costs will be large and therefore you’re making a loss, as you’re not selling your product. Then, when your finished product goes to market and, if liked, sells for a nice profit? Though it may take a year or so to start making an overall profit as they have to pay off the research and development (R&D) costs.
As subsequent years should see R&D costs lower, then why then are the devices still selling at the same price, long after the R&D costs have been recouped? The answer is because they can and a company not making a profit is either doomed to failure or known as a ‘not for profit’ organisation?
The argument against High Prices – Capitalism verses Social Responsibility
This argument has just taken into account the capitalist stance, after all we are in a capitalist society, full of companies needing and wanting to make profits. What hasn’t been brought into the argument is the fact that these devices and other Assistive Technologies are being sold to help people, due to their disability, achieve (or enable them to get closer) to what a non-disabled person can achieve.
In my example, using communication devices, we’re looking at allowing people to speak, not just an entertainment device or luxury item. So should such profits be made from, what many would see as a miscarriage of circumstance? After all, if we heard of someone not being allowed on the train before they paid for a ticket costing £1,000 whilst everyone else on the train were being charged £50, or even being allowed to ride for free, then there would be a national outcry, would there not?
The Government ‘bale out’
We are now looking at Assistive Technology being brought into the NHS and local government. Either way, we’re going to be paying for it. That’s good, isn’t it?
It is indeed good, as long as the government departments know what they’re talking about. Remember Wembley and the Millennium Dome? Both government initiatives that went way over budget. Those projects involved construction, humans have been building things since we stopped hunting and gathering and therefore the knowledge of how much materials and resources cost should be relatively common-knowledge. Yet someone signed those construction contracts off and the taxpayer footed the bill.
We are now looking at specialist equipment, not projects that have been common place such as buildings. Who’s going to check the spending on this then? Who is going to advise the NHS on what equipment and supporting services should be bought and what is a fair price?
Let’s get it right this time
I’ve seen government schemes come and go. They all look good on paper, but by the time the dust settles, people take stock and then try to sweep things under the carpet because the promises that were made just didn’t come true. The amount of money being invested into the schemes look impressive, though the cash soon gets flitted away.
Research needs to be thorough and contracts need to be tight, exact and overall, the best value for money using the resources to hand. Do you think that Wembley would’ve cost so much if the sums were properly investigated in the beginning and financial penalties enforced for every day they ran over schedule?
Tags: Assistive Technology
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