33 comments

  • catherd 1452 days ago
    The mask situation in the US is truly fucked up right now. I've been finding and sending masks and other PPE to the US from China. Started out for friends and family then it expanded to friends-of-friends, then anybody. It has a really weird dynamic.

    I've contacted over 100 hospitals. They don't want to help themselves. It's all about pushing people into a web form that fronts a bureaucratic system that supposedly allocates resources efficiently through a central clearing authority (never heard back from any of them), covering their ass in regards to regulatory requirements, and not allowing anyone to take advantage of them by charging money.

    Individuals aren't much better. They've had so much conflicting information drilled into them that of the few who still think masks are needed by regular people, many feel so guilty about getting them that they can't bring themselves to do it. Or can't wear them in public because people will judge them for taking away from nurses even though the same hospitals the nurses work at have made it clear they would rather have their employees work unprotected than buy something not approved by the FDA or stoop so low as to work with someone who can't donate everything for free.

    Have had way better success working with retired civic-minded business guys who can buy stuff through their local civic group and just get it done. It takes a surprising amount of almost outright harassment from these dudes to get the hospitals to either accept a donation or come up with a list of what they need and arrange funding, but so far getting hooked up with this type of person has been the only way I've found to get PPE (at least the kind that's still available) into a hospital.

    • samcheng 1452 days ago
      Hospitals do seem to graciously accept donations, even opened (half-used) boxes of masks. You can just drive up and hand them off. Second-tier healthcare facilities, such as elder care centers and rural clinics, are also desperate for PPE right now.

      We just drove up to the UCSF hospital and dropped off a couple hundred pounds of supplies. No fuss:

      https://www.rinse.com/blog/rinse/covid-19-medical-supply-dri...

      Here's an example organization with a long list of facilities accepting donated supplies:

      https://www.donateppe.org/

      I'm sure it's harder to convince the terribly inefficient US health care bureaucracy to pay for this. I noticed our local Chinese American community, combating a worrisome rise in racism, has been active in the philanthropic distribution of masks. You might try raising funding that way, instead of through the bureaucracy.

      I've also noticed a reluctance to accept the Chinese KN95 standard. People don't trust it, for better or worse. I think they would rather have homemade cloth masks, to be honest. Not sure how you can change that perception.

      Best of luck in your efforts!

      • edge17 1452 days ago
        The economic reality is that most of the chinese supply chain that creates most of the masks is KN95 because China mobilized their country for their needs first. Quality is definitely an issue, but the bureaucratic layers of many of the hospitals in the US are definitely protecting the business at the expense of the safety of front line workers. Most of them simply don't understand what is going on at the ground level of the supply chain.
        • dsfyu404ed 1452 days ago
          As someone who spends way too much time hanging around with cynical lawyers I am not surprised by the current state of affairs.

          We've spent the last 30yr using civil case law to heavily incentivize organizations to build process and follow that process even when it's stupid, push decision making higher up and remove the capacity for decisions making down low (like middle manager level) where they can happen fast.

          It's not that the people want to protect the business at the expense of patients but that the business itself is structured in a way that it's impossible for the people who make it up to do break protocol that says they have to meet X Y and Z criteria when sourcing supplies without it being a fire-able offense.

      • fencepost 1452 days ago
        Hospitals do seem to graciously accept donations, even opened (half-used) boxes of masks. You can just drive up and hand them off. Second-tier healthcare facilities, such as elder care centers and rural clinics, are also desperate for PPE right now.

        There's a significant difference between donating to or working with hospitals and doing the same with medical professionals working in hospitals.

        Particularly for small donations like a partial box those are probably being allocated out directly by and to clinical staff in need.

      • bwb 1452 days ago
        I think the KN95 issues is also a legal/health standards one. I don't know if the FDA can waive that unilaterally but they should prob think about it.
    • m4rtink 1452 days ago
      While not perfect (we could have definitely acted sooner) the Czech system of handling PPE distribution seems to have worked so far: - banned export of sanitizer and drugs early on

      - banned sale of FFP3 class respirators to anyone else than healthcare providers and the state

      - required everyone to wear masks in public of any type (this is rather important as it both prevents asymptomatic carriers from spreading the infection & remove the mask stigma by everyone having one)

      - this triggered a huge wave of basically everyone with a sewing machine & some fabric making masks, by now (~third week of masks) basically everyone is stocked and is quite easy to buy a had made mask online or get it from your local administration (there are now even some mask vending machines)

      - started an air bridge from China (various aircraft - from the government, chartered & NATO leased An-124s, planes appropriated from various airlines), so far 500+ tons of PPE and medical supplies have been acquired

      - material distribution is handled by the state (army, firefighters & sometimes even the police) to all the hospitals, care homes, for police, social workers, etc.

      • grey-area 1452 days ago
        required everyone to wear masks in public of any type (this is rather important

        Have any studies been done on this? It seems pretty tenuous to me and lots of assertions about mitigations (from drugs to masks) are being made just now without evidence.

        • ceejayoz 1452 days ago
          Yes. Lots of studies linked in https://medium.com/better-humans/whats-the-evidence-on-face-....

          Turns out stopping droplets helps slow the spread of a virus that spreads via droplets. Shocker, I know.

          • grey-area 1451 days ago
            Thanks for the link. The vast majority of the studies cited there are in fact in a hospital setting. I'm skeptical masks worn in the street are going to help more than distancing measures, though they'd probably help in crowded environments like public transport (along with hand washing).
            • GaryNumanVevo 1451 days ago
              Clearly the effects are at least cumulative. The lowest estimate for transmission with a homemade mask is 50% reduction, that's better than 100%
            • ceejayoz 1451 days ago
              They are to be used in conjunction with distancing measures, handwashing, etc. They are not a replacement for it.

              Here's one on homemade masks; they work better than nothing, not as well as surgical/N95: https://www.ncbi.nlm.nih.gov/pubmed/24229526

              • m4rtink 1451 days ago
                You definitely want to do both & ideally much more. But yet again, even even if mask provided zero protection, as long as it reduces spread from asymptomatic carriers, it is a big win. But for that everyone needs to wear them - which is happening here in Czech republic.

                Just today a went for a walk through the second largest Czech city. The weather was nice and there were people in the streets, though a lot less than normally, with the usually crowded spots totally empty due to all the restaurants still being closed.

                To cut things short, the number of people without mask I saw during this hour and a half walk that were not wearing a mask ?

                1

        • slfnflctd 1452 days ago
          More recent data strongly suggests that even people with no symptoms at low risk who have been sheltering in place should be wearing masks in public. I read an article over the weekend (which I unfortunately can't find now, although I found some similar ones) that described people on a plane with an infected passenger-- the rate of infection for healthy people wearing masks was literally zero, while those without masks was like 40%. I can't verify this now, but I have turned up a lot of articles describing how the official advice has changed on this.

          I have a friend in a mid-size midwestern town in the U.S. whose mayor just put out a bulletin advising that everyone wear masks.

          • nucleardog 1451 days ago
            Similarly, there's at least one study out of China related to this recent outbreak showing the infection rate of the front line staff in hospitals (who were given N95 respirators) as zero, while the infection rate among other departments (radiology, etc) which were not wearing masks as much higher. That despite them calculating the front line staff having ~700% more exposure to the virus.

            I know we want to study and confirm everything, but it seems like a real no-brainer that wearing a mask that filters droplets would reduce your disk of infection from an airborne virus generally spread via droplets.

            And we're not talking about this in a hospital context, simply as harm reduction. As long as respirators are not an option for most of the general public due to supply issues, etc, then anything which reduces the infection rate is /better than nothing/, even if it isn't perfect.

            • grey-area 1451 days ago
              I think you and others are making a lot of assumptions here - outside a hospital setting with trained staff and fitted masks to keep out virus-saturated air other vectors may be far more important.

              There are reasons health experts around the world have not bothered to recommend general wearing of masks before other measures. Most people don't have the discipline to wear masks properly, not touch them, sterilise them, clean masks and all their clothes when they get in etc.

              • ceejayoz 1451 days ago
                It is a mistake to think “wear a mask” advocacy is actually “wear a mask and do nothing else” advocacy.

                It’s one of several things one should be doing.

        • WhiteSage 1451 days ago
          There is no denying that wearing masks slows the spread. But how much do fabric masks with no filter, which allow most droplets through, slow the spread? I would appreciate any in reference to studies/indications on which fabrics might be appropriate.
          • ceejayoz 1451 days ago
            https://www.ncbi.nlm.nih.gov/pubmed/24229526

            > Both masks significantly reduced the number of microorganisms expelled by volunteers, although the surgical mask was 3 times more effective in blocking transmission than the homemade mask.

            Stopping droplets entirely isn't as critical as slowing them down. That's why the homemade masks still require the six foot social distancing.

        • DanBC 1452 days ago
          You asked for studies but you're going to get a bunch of Medium blog posts written by tech-bros who've half-read, and misunderstood, a bunch of research that says that masks don't really do much to stop droplets getting in nor getting out and that masks are probably not useful to prevent covid-19

          There's a delusional belief on HN that the only way people are infected is by breathing in droplets, and all the other routes (fecal-oral, ocular, hand to mouth nose or eyes) are ignored, even those these are probably the main route of infection.

          • ceejayoz 1452 days ago
            I'm sure you'll be citing studies that demonstrate this, right?
    • prostheticvamp 1452 days ago
      Just gotta like my nose in, as a medical professional involved in procuring PPE for my small health chain:

      We run into fraud and scammers trying to take advantage of our desperation on a daily basis. Probably about 20% of our supply leads. So, yeah, there’s a definite element of wariness - we don’t just take anything from anyone at random. Lives depend on us sourcing actual equipment, rather than squandering limited resources on falling for a scam. And, you know, not being the FBI, for many of us this falls to a lone harried admin plus-or-minus their boss talking it over and making a gut call before moving on to put out the next fire.

    • swiley 1452 days ago
      I just went to Whole Foods (hopefully for the last time in quite a while.) everyone there was wearing a mask (customers and employees) fear of shame be damned.

      Also hearing “Shiny Happy People” while everyone is literally up to their eyeballs in PPE afraid to be near each other is a weird experience.

      • chillacy 1451 days ago
        > fear of shame be damned

        I hope that starts to become more socially accepted now. The thing that's always stopped me from wearing my mask as early as February was all the news reports of people being assaulted for wearing a mask on a subway. Like no good deed goes unpunished.

      • xamuel 1452 days ago
        "Shiny Happy People" might be more appropriate than it seems. Many consider the song to be an imitation of dystopian propaganda.
        • MattSayar 1451 days ago
          That's funny, considering:

          >“It’s a fruity pop song written for children. It just is what it is”, Michael Stipe told the BBC’s Andrew Marr in 2016.

          • xamuel 1450 days ago
            Artists don't always accurately describe what their works mean. John Lennon insisted that "Lucy in the Sky with Diamonds" has nothing to do with LSD :)
    • gamblor956 1452 days ago
      You're definitely not calling the right hospitals. In LA, hospitals have been accepting donations of masks from people, and purchasing them from local companies. No bureaucracy involved.

      And it's now rare to see people not wearing masks in LA.

      • edge17 1452 days ago
        I think he's trying to offer his supply channel to hospitals that are talking about being desperate for supplies.

        People keep talking about donations, but the reality is that this is a crisis of supplies, not a crisis of money. My experience matches the parent comment here.

        • yellow_postit 1452 days ago
          Knowing OP is someone selling the wariness is all the more reasonable. Random internet stranger trying to sell masks, figuring out if they are legit or not is a valid concern before spending money.
          • edge17 1451 days ago
            That is correct, but again, the reality is that the whole supply chain comes from China and fake 3M masks also exist. Also, no one is telling the hospitals not to ask for samples and test the goods themselves. The problem is that the hospitals don't even understand what they're up against on the supply side, and they have an expectation that 'legit' masks will just show up.

            I've been knee deep in this stuff for the last two weeks or so, the article in this post is accurate from what I've seen on the supply side. This is also another accurate article - https://www.forbes.com/sites/daviddisalvo/2020/03/30/i-spent... One thing worth pointing out is the article points to the sheer number of supplies leaving the country due to hospitals being unable to pay quickly enough. All I can say is, the demand is real, the supply is constrained, and not all the 'random internet people' are scammers - a lot of them are people with very deep resources and relationships in China actually trying to do their part to bring PPE.

            In the end, donations aren't going to solve this problem. Reliable supply chains are, and reliable supply chains require that some small profit be made to cover material costs, cost of risk, cost of storage, etc.

        • gamblor956 1451 days ago
          Kaiser California was part of an attempted $39 million scam related to masks and other medical equipment just a week ago. Luckily they did their due diligence and no money changed hands, but there are a lot of scammers out there claiming to have masks who can't actually back up their claims.

          If the OP actually has those masks, and can prove he owns the inventory and that they are what he claims they are, he wouldn't be having any issues selling them right now.

      • sieabahlpark 1452 days ago
        What? I live in LA and the majority are not wearing masks. At least on the westside. It's very casual still in some areas. Thankfully I don't see mother's taking their kid to soccer practice still.
        • jayd16 1452 days ago
          Went to the market today on the west side and it was probably 50-50 masks, maybe more masks than not. I think our sample sizes are just too low to draw exact numbers but its still much higher than last week.
        • gamblor956 1451 days ago
          I haven't been to the Westside since they imposed Safer at Home, but east of the 405 at least half of the people are wearing masks, and in some neighborhoods almost everyone is.
      • yodsanklai 1452 days ago
        Does it make sense to wear masks in the outside though? suppose I have a limited number of masks, should I keep them for indoor public spaces, such as public transportation or doctor's waiting room?
        • prirun 1451 days ago
          According to this article, masks can be reused (and critically, retain their electrostatic charge) by baking in an oven for 30 minutes at 160 F or steaming for 3-10 minutes (this article says 3, the CDC site says 10 I think):

          https://utrf.tennessee.edu/information-faqs-performance-prot...

          The CDC recommends not reusing masks, but sometimes it may be necessary.

          Another option is to have 5 masks in a paper bag and rotate them every day. The virus should be dead after 5 days.

          Another option I read is to steam a mask in the microwave using a plastic bag with 60ml (6 tbsp) of water for 3-10 minutes once steam is generated.

          https://www.cdc.gov/coronavirus/2019-ncov/hcp/ppe-strategy/d...

          I am only passing on information I read and am not qualified to judge its accuracy.

    • alexis_fr 1452 days ago
      There will be another scandal with infected masks, it is bound to happen. At one point, a large percentage of the population is infected unknowingly, and manufacturing masks in a pure environment won’t be easy.
      • TylerE 1452 days ago
        Unlikely. Lifespan on nonorganic surfaces is limited to a few days.
        • alexis_fr 1452 days ago
          Some studies already say they survive 7 days on masks, and a flight is only a few hours.

          HN is really becoming an echo chamber where there is only one leading trend, downvoting to hell the various opinions, and it is really bad for HN’s ability to help entrepreneurs anticipate on trends.

          • ejstronge 1452 days ago
            Do you have a link to these studies? I haven’t heard of a study showing viability this far out (vs showing the presence of viral nuclei acids, which is not sufficient for infection)
  • mrosett 1452 days ago
    One angle that this article missed: anti-price gouging sentiment has a lot to do with why the factory isn’t running 24/7. Imagine if he could charge 10x his normal price (ie $1/mask, which is much less than the value a mask provides.) I suspect plenty of employees would happily work 100 hour weeks for the duration of the crisis if they were getting paid $150/hr. Instead, he’s forced to take a slower, more conservative approach to ramping up to avoid risking bankruptcy.
    • juiyout 1452 days ago
      Same in Taiwan, mask making has not been very profitable. Taiwan imports 93% of masks from China.

      Govt stepped in quickly on the brink of this outbreak though. Govt called 34 companies together each responsible for different parts of mask manufacturing from material, machine parts, installation, assembly, etc and govt up front paid 6 million USD for 62 production lines to be installed and assigned military personnel to help man the lines 24/7.

      Daily mask production ramped up from 3 million to 10 million in 3 weeks. This is only barely covering Taiwan's domestic needs. Taiwan is now aiming for daily production of 20 million.

      For distribution, govt rations out all manufactured masks. Currently each citizen gets 9-10 masks every 2 week and I believe each doctor receives 40 per week. The price of the masks for regular folks is fixed at around 1 USD for 6 masks. It is free for med staff.

      As for the installed production line, once the mask maker reached the production quota of 5 million masks for a particular production line, the mask maker gets to keep that production line for free. Note that the mask makers, once involved in this project, pretty much gave their business as usual.

      I would think it is tax dollar well spent.

      EDIT: Try and include some English references: - [https://focustaiwan.tw/business/202003090013] - [https://www.taipeitimes.com/News/taiwan/archives/2020/03/10/...] - [https://www.taipeitimes.com/News/editorials/archives/2020/03...] - [https://www.straitstimes.com/asia/east-asia/coronavirus-how-...] - [http://www.taipeitimes.com/News/front/archives/2020/02/15/20...]

    • gpm 1452 days ago
      From one perspective this is true.

      From another perspective, he's having trouble getting long time contracts. Hospitals could give him that extra 90c per mask (10c per mask per the article, 1$ suggested price in your comment) by signing a contract to buy x masks every year for 10 years instead of just signing a contract to buy x masks.

      It seems that the actual problem might just be hospitals being stingy.

      • arkades 1452 days ago
        > It seems that the actual problem might just be hospitals being stingy.

        Hospitals have to stay afloat just like everyone else. If they go bankrupt, they close, just like everyone else.

        If the government agrees it's a national security matter for us to have our own PPE production pipeline, then it needs to stop in. It can't expect private facilities, that have to make their own budget targets, to take on the cost of keeping up national priorities. That's literally what the government is for.

        • taneq 1452 days ago
          Hospitals aren't going to sink or swim depending on whether they can save 10-15c per face mask, and being the U.S. they probably charge the patient $10/mask regardless.
          • prostheticvamp 1452 days ago
            Hospitals don’t generally buy line items. Tiny healthcare centers do. Hospitals get tied into group purchasing organizations (GPOs), which control the supply pipeline to hospitals in exchange for buying at scale.

            But that’s beside the point. Almost all disposable medical supplies are cheap in isolation. They build contracts for a whole bunch of supplies, in massive quantities, over time.

            Those pennies add up.

            Again, operating margins <2%.

            Until you’ve internalized what that means, I don’t see a high value in going back and forth.

            • cerberusss 1451 days ago
              Parent noted they're a a medical professional involved in procuring PPE for a small health chain. Above comment should not be voted down, IMHO.
        • Aeolun 1452 days ago
          If they could pay $0.1 per mask before exporting the job to China for $0.02, then presumably they can do the same thing again and make marginally less profit.
        • fermienrico 1452 days ago
          The Republican party's narrative is that the private market will "figure itself out". Furthermore, the party does not condone excessive government intervention. That's a double whammy.
          • PeterStuer 1452 days ago
            That is not a 'Republican' narrative, but a neo-liberal narrative. In the US that is available in two colors, red and blue.
          • randallsquared 1452 days ago
            > the [Republican] party does not condone excessive government intervention.

            Well, that's the rhetoric, but it's only that for most. Power first, principles later.

          • Cyberdog 1452 days ago
            What Republican party are you looking at? The one that passed a law last week for $2 trillion in government intervention? The one that shut down my state for at least three weeks, causing me to lose my side job?

            Sadly, small-government types (of which I am one, if by "small" you include "no") no longer have much of a home in the Republicans.

          • saber6 1452 days ago
            > Furthermore, the party does not condone excessive government intervention.

            This sentiment is dated and suspect. Reference: The stimulus/relief bill just passed.

            Remember the bottom line that everyone in power likes to be in power. Gotta keep the music going.

          • mikemotherwell 1452 days ago
            So you think this policy was in place starting with Trump? Or was it with a Bush, but Obama chose NOT to repeal it? Or has it all started with Republican governors very recently?

            This partisanship seems crazy to me, especially given that the bureaucratic system seems plain broken. Not broken based on Republican or Democratic ideology, just plain broken.

            I'm not American, and it doesn't seem like in my country Australia these supply issues have been as bad, despite almost all of our supply coming from China.

            • lazyasciiart 1452 days ago
              They haven’t been good. Australian doctors are wearing homemade masks just like Americans. https://www.physiciansweekly.com/were-not-hungry-we/
              • Melting_Harps 1452 days ago
                > They haven’t been good. Australian doctors are wearing homemade masks just like Americans.

                Wow, I had thought that due to political alliances and mutual dependence as well as proximity that Australia would be the first to get supplies from China. I guess this provides further credence that being politically cozy with CCP doesn't benefit you any more than a country who puts trade sanctions in place like the US.

                That was a really sobering read, but this highlights the chaos that is currently taking place best:

                > But staff in some stretched hospitals in NSW are facing tight restrictions on the use of higher specification N95 face masks and are relying on face shields made from plastic and rubber bands from hardware stores to stay safe.

                > “Some are even using scuba gear,” said Andrew Miller, President of the Western Australia state branch of the Australian Medical Association.

                > “We have doctors and nurses who have been disciplined for trying to wear a mask at work. It’s a situation full of conflict and confusion.”

                The CCP (and by extension the WHO) should have to answer for Crimes against Humanity for trying to cover up COVID19 outbreak which got medical workers killed, and dissapearing citizen journalists who were trying to expose the dire nature of all of this.

                I hope People now begin to realize (and support) why what Hong Kong is doing is imperative to not just their own interests, but in curtailing the expansion of this Authoritarian regime from being a dominant power in the World. For most people it's one thing to see it going on elsewhere and dismiss it as other People's problems, but a stark realization comes into focus when you see it's implications have affected not just your safety and livelihood but the whole World as its exhausting the foundations of daily Life.

                Its par for the course for the CCP, I highly recommend people watch a documentary on how the CCP has and will continue to censor media and jail those who fail to repeat their narrative that ultimately lead to the World being in disrepute, as all of this could have been avoided:

                https://www.youtube.com/watch?v=cKbd4EsbgMM

                Also, if anyone works in the medical field and needs to get a source on masks, a yellow leaning Hong Kong factory (Yellow Factory) has begun making masks:

                https://tinyurl.com/uw4umrd

                https://www.facebook.com/yellowfactory2020/posts/12316591596...

            • presumably 1452 days ago
              Clinton: https://en.wikipedia.org/wiki/Strategic_National_Stockpile

              Republican ideology is abhorrent; one doesn’t have to be part of the Democratic Party to recognize that.

              https://www.theatlantic.com/ideas/archive/2020/03/conservati...

              • champagneben 1451 days ago
                From your Wikipedia link:

                "In 2005 and in preparation for a predictable pandemic influenza, the Bush administration called for the coordination of domestic production and stockpiling of protective personal equipments.[6] In 2006, the US Congress funded the integration of protective equipment to a Strategic National Stockpile: 52 million surgical masks and 104 million N95 air-filtration masks were acquired and added.[6] During the 2009 flu pandemic, 100 million masks were used, but neither the Obama administration nor the Trump administration renewed the strategic stocks."

      • mrosett 1452 days ago
        Note that getting hospitals to agree to long term contracts at prices that are higher than they'd normally pay is basically a backdoor form of raising prices. From a financial perspective, there's not a huge difference between a) a hospital paying $0.80/mask for the next year and $0.02/mask for the following decade or b) $0.10/mask with a decade long contract.
        • pdonis 1452 days ago
          > From a financial perspective, there's not a huge difference between a) a hospital paying $0.80/mask for the next year and $0.02/mask for the following decade or b) $0.10/mask with a decade long contract.

          Yes, there is: the cash flow for the two cases is very, very different. Case b) is doable for a reasonable cash flow. Case a) is impossible unless someone else besides the hospital provides the huge up front amount of cash required to pay $0.80/mask for the first year.

          • gpm 1452 days ago
            Masks aren't a large enough portion of a hospitals budget for cashflow to be a major concern. Besides which loans exist (though we are neglecting to properly account for the future value of money in our napkin math).
            • pdonis 1451 days ago
              > Masks aren't a large enough portion of a hospitals budget for cashflow to be a major concern.

              Maybe not under normal circumstances, but these are not normal circumstances. Also, we're talking N95 masks, not ordinary surgical masks.

              • gpm 1451 days ago
                Compare the cost of masks to the cost of the salary of the people using them. Under no circumstance is the cost of masks a major cashflow concern.

                Nothing in the article says these are N95 masks, I don't believe you are correct. But also, what does that have to do with my comment?

        • gpm 1452 days ago
          Exactly! Financially the word for this is regulatory arbitrage. Since he was selling the masks at the same price before the crisis though I suspect that long term contracts would not fall afoul of whatever price gouging laws there are. It's also what it sounds like he is already doing, and maybe more socially acceptable.
        • lugged 1452 days ago
          If you can make masks for 10c its not price gouging to sell it at a normal markup from those costs. Its not even "basically a backdoor form of raising prices" It's literally just what it costs.

          Also, I highly doubt this guy is using 10 year contracts.

          If I was him I would only be selling to those hospitals that sign 100 year contracts with strict non compete clauses and defined rules around sourcing / pricing and failures to comply.

          • rch 1452 days ago
            > 100 year contracts with strict non compete clauses and defined rules around sourcing / pricing and failures to comply.

            Exactly. IIRC Sysco negotiates 50-99 year contracts with e.g. universities to supply on campus dining. It seems that firms in the healthcare supply chain would do the same.

            • michaelt 1452 days ago
              Interesting. What does a customer do, in a 50-year contract, if the level of service drops or the product becomes obsolete?
          • djyaz1200 1452 days ago
            Totally agree, he should accept orders from any org willing to sign a long term deal at his usual prices and run the factory 24/7.
          • londons_explore 1452 days ago
            Most companies go bankrupt in a lot less than 100 years... In most cases, the full value of the contract would never be paid.
            • Sabinus 1452 days ago
              It would still solve the problem of companies not purchasing while they're solvent but not urgently needing masks.
        • bluGill 1451 days ago
          If a hospital agrees to purchase so much over time I'd give them a discount. Cash flow works much better if you get it, one time purchases are the most expensive because you have to pay for all of your costs now.
      • richajak 1452 days ago
        not sure about giving him $1 per surgical mask is a right thing to do. The big component is the material, which need to be refined and coated. The material needs to be processed with expensive machine. According to article from NPR, even manufacturers in China depends on this German machinary supplier. It looks like the difference between 2c masks and 10c masks from his company is due to either business efficiency or labor cost. To pay 10c or 20c per mask to his company looks reasonable if he bought machine from Germany and made end-to-end production from raw material. However it does not seem reasonable to pay $1 if he simply buys ready-to-use materials, cut, and package.

        As for long term contract, the argument is ok up to certain extend. The cost of machine is quite high, several $m, it is a fixed cost, but negligible with high production volume - not that high to justify 10y contract.

        https://www.npr.org/sections/goatsandsoda/2020/03/16/8149292...

      • mapgrep 1452 days ago
        Not an extra 90 cents per mask, an extra 8 cents per mask.

        “His masks may cost a dime each, but a made-in-China mask might go for two cents.”

        A hospital charged my friend $5k for three stitches. They could pay 8 cents more per mask. But they care more about $$$ than the long term health of the country.

        And I’m not even making a moral statement with that. It’s the natural consequence of making health care a capitalist endeavor. There are other approaches.

        • arkades 1452 days ago
          Not to undermine your dramatic point[1], but:

          Most hospitals run at profit margins well below 10%. Median operating margins are in the vicinity of 2% (https://www.modernhealthcare.com/providers/operating-margins...) And for the last few years, expenses have been growing faster than revenues (though the rate of growth of expenses has slowed.)

          Whatever you imagine they're bringing in, they're not.

          Nor is their job to maintain the long-term health of the country. That's literally the government's job.

          [1] Those numbers have a historical reason behind them, which people are either ignorant of or choose to ignore. The short version is: hospital prices are set as a part of the negotiations with insurers. Insurers account for the vast, vast majority of dollars going into hospitals, so their business operations are built completely and entirely around insurance dollars. Uninsured patients register as barely more than a rounding error. So while, yes, being uninsured in this context sucks, hospitals aren't gleefully rubbing their hands and going "muahaha, $5K for stitches!" They don't expect to see that 5K, they don't rely on that 5K, and they're not trying to gouge that uninsured person who's almost certainly not good for that 5K. That person has just fallen into the crack(s) in our healthcare system, which are more complicated than "evil greedy hospital", or "evil greedy insurer."

          • pdonis 1452 days ago
            > Nor is their job to maintain the long-term health of the country. That's literally the government's job.

            No, it isn't. It's everybody's job. The government is a tool we use to delegate certain aspects of that job--and often it's a very bad tool to use and we should be relying on it less, not more. The idea that "it's the government's job" to do things causes all kinds of problems, because people think they can just let the government take care of it and not have to worry about it any more. You can't do that. Ultimately it is we, the people, who are responsible.

            • chimprich 1452 days ago
              > Ultimately it is we, the people, who are responsible.

              What a bizarre position. This distributed approach to the emergency health of nations hasn't worked out well in the current situation.

              I can't see how it would suddenly start working better in the future under our current economic system either. Everything is set up under economic pressures such that inefficiencies are ruthlessly exposed and eliminated.

              This maybe works out OK for creating new generations of electronic gizmos but it is catastrophically fragile for things like PPE as described in the article.

              To avoid something like this in the future, the only options I can see are more government control or rethink how economic systems work.

              • pdonis 1451 days ago
                > What a bizarre position.

                I don't see how it's bizarre to recognize what the US Constitution says.

                > This distributed approach to the emergency health of nations hasn't worked out well in the current situation.

                In the US at least, what hasn't worked is waiting for centralized authorities to tell people what to do, instead of just doing obvious common sense things like social distancing and wearing masks. Not to mention allowing the FDA to prevent state and local health authorities from taking obvious common sense measures to develop tests, either on their own or in cooperation with private labs, when it was clear that the FDA and CDC didn't have tests ready.

                > more government control

                Would be a bad idea, since the more centralized authority controls things, the worse the consequences are when the centralized authority makes a mistake.

                > rethink how economic systems work

                What you call the "catastrophically fragile" economic system is a product of government control. So again more government control seems like a bad idea.

          • deathanatos 1452 days ago
            I have a hard time believing and reconciling that against the cost of treatments.

            E.g., I had my vocal cords looked at; took only ~1/2 hour of an ENTs time, and is a (somewhat) common and non-risky procedure. $4,000. I have no way to justify that price — I highly doubt the ENT is making $8k/hr! It was one of the big reasons that drove me away from PPOs in general: completely opaque, expensive, retroactive billing. Going to the doctors puts you on the hook for near unlimited liability.

            Now, Kaiser was a nice contrast; I had the opportunity to get my wrist operated on for RSI. Somewhat invasive, would require weeks of healing, not guaranteed to be successful (it had a ~50% success rate!): $300, priced out before the operation.

            (Sadly, I'm no longer with Kaiser, as they were west-coast and the rent was too high.)

            • boulos 1452 days ago
              The Economist had an article about this last year [1, but paywalled, obviously]. A helpful quote though:

              > As the drug industry has come back down to earth, the returns of the 46 middlemen on the list have soared. Fifteen years ago they accounted for a fifth of industry profits; now their share is 41%.

              An example of a middleman firm is Express Scripts (a prescription management / negotiation firm) which had an operating income of $5B in 2017 on revenues of $100B. The parent company Cigna (NYSE:CI) handles a broader array of insurance things and had an operating income of almost $10B in the last twelve months but on revenue of $160B.

              Medical billing in this country is insane and full of inefficiency. A little bit of each part gets collected along the way, and it adds up. I don’t even think ExpressScripts would have been counted in the methodology that The Economist was using (excess profits are considered a >10% return on capital) as part of Cigna.

              [1] https://www.google.com/amp/s/amp.economist.com/business/2018...

            • WillPostForFood 1452 days ago
              Only 25% of hospitals in the US are for profit. 56% are non profits, and the rest are run by the government.

              https://www.kff.org/other/state-indicator/hospitals-by-owner...

              • grok22 1452 days ago
                NYTimes article, so may be pay-walled; but it sorta seems like non-profit hospitals in many places really do make money: https://www.nytimes.com/2020/02/20/opinion/nonprofit-hospita...
                • kube-system 1452 days ago
                  I see this confusion come up in just about every discussion about non-profits.

                  “Profit” and “income” are two entirely different things. All businesses, whether for-profit or non-profit, aim to generate income (i.e make money) so they can further their goals.

                  Profit is when you take that income and distribute it to shareholders. The main difference between for-profit and non-profit companies is that non-profits cannot do this.

                  The distinction of “non-profit” means a lot less than most people assume it does.

                  • grok22 1451 days ago
                    But one of the ideas of being a non-profit (atleast in my mind) is that they are driven by idea of service to the community. It seems like a lot of hospitals are structured as non-profits, but really with a profit motive (not community service) with the profits being funneled to individuals and stake-holders (in manners that take advantage of the law!).

                    Basically it's hard to reconcile the fact that hospitals are "non-profit" while also charging what seems excessively for everything.

                    I haven't looked through financial statements of one of these hospitals, but does anyone else have any experience with doing so and do they actually see that hospitals do need to charge those enormous amounts for everything to run effectively or to survive?

                    • kube-system 1451 days ago
                      Sure, hospitals have a mission of providing a service to the community. They treat patients.

                      Non-profit does not mean volunteer. It doesn't mean they don't make money. It never has. Non-profits are businesses. They operate like businesses. Any impression you had that they do anything differently is a misconception.

                      It is common for people to equate the word "profit" with "making money", and therefore mistakenly assume that "non-profit" must mean they don't make money. But the word here is specifically referring to the ownership of the organizations net-assets: all assets belong to the business itself, rather than it being the equity of shareholders.

                      Non-profit only means that the company must use it's property for its own organizational goals, and it does not have owners that the property can be distributed to.

                      > I haven't looked through financial statements of one of these hospitals, but does anyone else have any experience with doing so and do they actually see that hospitals do need to charge those enormous amounts for everything to run effectively or to survive?

                      From a link someone else posted elsewhere in the comments:

                      > Median operating margins reached 1.7% in 2018

                      https://www.modernhealthcare.com/providers/operating-margins...

              • briffle 1452 days ago
                in Madison, WI about 10 years ago, one of the local, non-profit hospitals plunked down $140M cash to build a new wing. didn't ask for donations, or take a loan. non-profit does not mean you don't make money...
            • fencepost 1452 days ago
              Quite probably the physician got 10-20% of that supposedly charged amount, possibly less, and from what (s)he received was paying a variety of expenses including a billing person to deal with the insurance company.

              If you have the procedure codes that were billed you can likely look up the Medicare reimbursement rates for them. Private insurance would pay more than that, but not orders of magnitude more.

              • indymike 1451 days ago
                You've explained the problem in healthcare well: 80-90% of the cost of seeing a physician is not seeing the physician.
            • arkades 1451 days ago
              Your ENT saw a tiny fraction of that.

              He billed 4K. The contracted rate he got from an insurer is significantly below that. A huge chunk of that disappeared to malpractice insurance before he got to paying the rest of his overhead.

              He saw, as another poster said, maybe 15% of that.

          • craftinator 1452 days ago
            It's really, really easy to be broke with a six figure salary. All you have to do is spend 99.9% of it every year.

            Have you seen the lavishness of the modern US hospital? The art pieces, high vaulted ceilings on every floor, solariums, gardens, decorative architecture... These things are not free. They are very, very expensive! And at the same time, they are fucking worthless in regards to making people healthy. I pay my insurance because I want to be healthy, not so the hospital I go to looks pretty. They are marketing machines that live outside their means, and I should not owe them $5k for stitches. It's fucking insane, and it's greed to use those massive markups on people who are in life or death situations. It's equivalent to wartime profiteering.

            • jimmaswell 1452 days ago
              The artwork and everything has been found to improve patient outcomes. Gardens and paintings aren't that expensive compared to other costs at a hospital.
          • vl 1452 days ago
            Oh, please, have you been to the hospital? This is typical visit: check-in with security, wait in line, check-in with receptionist, wait, talk to the nurse assistant (wtf? I kid you not, now nurses have assistants!), wait, repeat exact same thing you said to assistant to the nurse, wait, see doctor for 5 minutes and repeat exact same thing again! How the fuck is it supposed to be efficient?
            • evgen 1452 days ago
              It is actually rather efficient, you just lack the wisdom to understand anything beyond your own narrow point of view.

              Check-in with security: Yes, because this is 'Merica and it has actually become necessary to do a preliminary screen to make sure you are not a raving nutjob.

              Check-in with receptionist: Enter you into the system, until this point is hit you are not even at the hospital as far as the system is concerned.

              Talk to nurse assistant: No, this is not just an assistant for a nurse, but rather a term used to describe someone who has a particular level of training and commensurate duties. A CNA can take vitals, ensure that they have the proper records for you (e.g. records say vi is a 45 year-old white male and we have a 60 year-old Latina, maybe we need to double-check things.) This is also the first real step in the triage process where someone with medical background can make a quick decision as to whether or not you need to be seen quickly or can wait.

              Talk to nurse: Ok, now we actually start doing more fine-grained examination and diagnosis. Chances are this is where the real diagnosis and treatment was decided, but you don't need to know this.

              Talk to doctor: Now someone who is very busy will take a few moments to examine you and make a decision. The nurse you talked to earlier put markup on your chart indicating what she noticed and found as well as possible standard treatments for same so the doctor was able to confirm that it was horses and not zebras and then sign off on the treatment.

              In a hospital all of that process you think of as inefficient does not give a shit about you or your time, it is trying to maximize the value and impact of the time that really matters in a hospital: the attention of doctors and RNs. The process may have been inconvenient for you, but it means that the people who matter at that hospital only spend their time where it is needed and trivial tasks or downtime are handled elsewhere in the process.

              • bluGill 1451 days ago
                There might be too many layers, but those same layers mean that there are multiple people any one of which might notice that you are the rare 1 in a million case not the common thing with almost the same symptoms that they see hundreds of every week.
            • Red_Leaves_Flyy 1452 days ago
              Why don't you go to urgent care instead? If you define why think you need a doctor you'll probably be fine at urgent care. If urgent care won't take you then you'll probably be seen quickly at a hospital.
              • vl 1452 days ago
                Because it wasn’t an ER visit, it was an appointment.
          • Aeolun 1452 days ago
            > more complicated than "evil greedy hospital", or "evil greedy insurer."

            Evil greedy medical industrial complex?

            I think most of the issues in the US medical situation come from everyone trying to profit as much as possible.

        • gpm 1452 days ago
          > Not an extra 90 cents per mask, an extra 8 cents per mask.

          We're suggesting the hospital giving him 1 dollar per mask instead of 10 cents during the crisis, that's an extra 90. 98 cents compared to the Chinese prices.

          I guess my proposal makes it a bit less. With the 10 year contract, assuming that the demand spike only exists in the first year, it would be an extra 90 cents - savings of (9 years * 2 cents / year) = 72 cents per mask. This could be "fixed" by extending that contract for a few more years.

          • droithomme 1452 days ago
            I paid $4 per N95 mask in January.

            $1 is an absolute bargain.

            $0.10 is vastly below the cost of manufacture and only being promoted by people who mean harm.

            • gpm 1452 days ago
              The $0.10 figure comes from the article... I think these might just be surgical masks not N95 masks.
            • PeterStuer 1451 days ago
              Did you buy them at quantity (lot of 50k masks), or in a small box of 10 at the DIY store?
        • readme 1452 days ago
          >A hospital charged my friend $5k for three stitches

          https://www.youtube.com/watch?v=VGDUqBLtyNM

          DIY can save money. I've used superglue for this in the past.

          • vl 1452 days ago
            You don’t have to use superglue, there is special medical glue for this purpose you can buy. Also great for treating cuts before swimming, etc.

            Search for “tissue adhesive” or “liquid bandage”.

          • godelski 1452 days ago
            Please don't do this at home.
            • concordDance 1452 days ago
              My family used superglue at home for cuts all the time. Not really much worse than doctor stitches.

              The difference between you and a doctor for little things like stitches that causes the $5k price tag is a couple of hours of study, credentialism, beurocracy and malpractice insurance. Only the couple of hours study is actually needed and you can do that yourself pretty easily with the internet.

              • himinlomax 1452 days ago
                There's medical grade superglue, it's a bit more expensive than regular superglue which has mildly toxic byproducts.
            • godelski 1452 days ago
              For the downvoters: SERIOUSLY DO NOT DO THIS AT HOME! Let the medical professionals put in your stitches.

              I seriously can't believe I have to say this.

              • dgoodell 1452 days ago
                I cut my index finger pretty bad, it must have been all the way through the skin as there was a big flap. It definitely needed stitches. I used superglue to hold it together until it stayed stuck on its own. I couldn’t use the finger for like a week because it was all bandaged up. Probably not as a good job as if I went to the doctor, but my finger didn’t fall off. HDHP turns you into a do-it-yourselfer. My mother had a much more serious gash when she dropped a piece of glass on her foot. This was on Croatia. We went to the ER in the city, and she got stitches fairly quickly for like $20 cash. If I would have cut my finger in Croatia, I would have gone to ER to get stitches.
                • lovehashbrowns 1452 days ago
                  Had a coworker do this as well. Cut his finger, used superclue to hold it together. Turned out well, apparently.

                  With the Healthcare situation in the US, it's basically past the point of just saying "go to a doctor, don't diy." Now it's just better to give out accurate information for diy people to do it safely.

                • vl 1452 days ago
                  Get normal medical glue instead of superglue - search for “tissue adhesive” or “liquid bandage”.
              • jschwartzi 1452 days ago
                This is America. It’s much cheaper here to risk our lives than to risk bankruptcy from visiting a hospital.
                • readme 1449 days ago
                  I have to assume the guy who says not to do this is from a country with universal healthcare.
              • craftinator 1452 days ago
                For 5 grand? Yeah fucking right. Why would you recommend that?
                • godelski 1452 days ago
                  Because a high chance of an infection/botched job would lead to a much larger bill and more pain.
              • Zanni 1452 days ago
                You can keep saying it, until you provide an argument. ALL CAPS is not an argument, you're just stating your opinion louder.
        • jmckib 1452 days ago
          If healthcare was really a capitalist endeavor then it wouldn't cost $5k for three stitches. Prices would be transparent, there would be a free market with competition, and healthcare wouldn't be linked to employment. You can thank regulations for all of those problems.
          • monocasa 1452 days ago
            Why wouldn't capital use the inability of people who are literally passed out and bleeding out on stretchers to price shop, to capital's advantage?
            • dogma1138 1452 days ago
              Because someone would then do it for cheaper when medicine was a trade that’s how it used to be.

              And it’s somewhat how it’s still is in some fields of it primarily cosmetic, elective surgery (including LASIC and the likes) and dentistry.

              There are plenty of countries where the majority of the health care is provided by private firms even if the state picks up the bill or part of it including almost all countries with universal healthcare.

              The US is pretty much unique in costs and distribution of burden and it’s not because of the free market approach to healthcare.

              When 9 out of the 10 most profitable hospitals in US aren’t even private/for profit you can’t simply claim that the investment firm or HMO that owns the hospital tries to suck out as much profit as possible for their shareholders.

              P.S. I don’t agree that regulations are the problem anyone who thinks that you somehow would get better results with deregulating healthcare is likely very wrong, the entire system in the US is however broken and not because of simply campitalism.

              • roenxi 1452 days ago
                Great comment; agree all the way. But I do think that it lost the specifics here so I want to highlight them:

                Stitches are very easy to administer. Nobody needs a uni degree to stitch up a wound. They need lots of practice.

                It is impossible for a reasonably free market to charge $5,000 for 3 stitches; because an independent doctor would set up next door with a sign saying "Stitches; $4,500!" and drive home in his Lamborghini every day. The hospital and the independent doctor would then start undercutting each other until the margins were no longer outrageous and they have to think a bit before dropping their prices any further.

                If a hospital can get away with charging $5k for 3 stitches, any market freedom has long ago been exorcised.

              • perl4ever 1452 days ago
                "When 9 out of the 10 most profitable hospitals in US aren’t even private/for profit"

                How exactly do you measure the profit of a non-profit?

                • cosmie 1452 days ago
                  The same as you measure the profit of any business. They're just referred to as net assets[1].

                  Non-profit is a misnomer - not for profit is a more apt phrase. While they can't operate with the intent of generating profit, they're perfectly allowed to actually generate profit from various activities. With the intention that the profits from that activity will be a revenue stream that funds loss-making activities elsewhere which support their nonprofit mission (such as issuing grants). Hence it's kept on the books as net assets.

                  [1] https://smallbusiness.chron.com/non-profit-accounting-defini...

                  • dogma1138 1451 days ago
                    They don’t even have to fund loss making activities they just aren’t allowed to share profits with investors / shareholders.

                    They have to reinvest their profits back into the business that can be grants but can also be increasing pay to their staff or expanding their operation.

                    Two thirds of US hospitals are NFP (public, community, university etc) or government hospitals.

                    Ironically the more money they make and the bigger they are the higher prices they tend to charge because they can negotiate higher rates with the insurance providers.

                    The US system is simply broken the US healthcare has a huge problem with uncompensated care which is one of the primary reasons why most hospitals lose money on primary care.

                    This means that hospitals are “forced” to extract as much money as possible form insurers so your healthcare costs do not only incorporate the risks of all policy holders for your specific provider but also the uncompensated care costs of the hospitals.

                    The insurers then extract as much money as they can from their clients which primarily are business which don’t seem to care that much as they can often write of much of that cost as operating expenses.

                    This pretty much causes a cycle of inflation that is unsustainable under normal circumstances and will utterly brake the entire systems under extremes like the current pandemic.

              • matwood 1452 days ago
                I would add those clinics to your list of places we see competition drive prices. I have 2 near my house that handle things like cuts, fractures, sprains, sinus infections, etc... They were $100 for pretty much everything included in a visit (x-rays, tests), but have started competing. They went down to $95, and may be $90 now.
            • BurningFrog 1452 days ago
              Because that would be the worst imaginable PR.

              Also that kind of emergency care is quite rare. It's a very small part of the healthcare system and mostly confuses the discussion.

              • ardy42 1452 days ago
                >> Why wouldn't capital use the inability of people who are literally passed out and bleeding out on stretchers to price shop, to capital's advantage?

                > Because that would be the worst imaginable PR.

                You're wrong. "Bad PR" has not worked at all to encourage the healthcare industry to fix medical billing on its own. See this article for an example:

                https://www.nytimes.com/2017/03/29/magazine/those-indecipher...

                It's literally impossible to comparison shop healthcare, and I've tried. You can't properly diagnose yourself, for the same reason a doctor can't properly debug your code. You have no idea how treatment is going to be coded (and you'd have to be an expert to understand the codes and their implications, anyway). Hospitals will only tell you their inflated "list prices." Your insurance won't tell you anything about what they've negotiated with the hospitals in your area until you've been billed, since they consider that information proprietary.

                Most healthcare is to solve real health problems (from mild to extremely serious). People won't decide to live with those problems unless they're forced to, so they can't opt out of the system until it's fixed.

                • stale2002 1452 days ago
                  > It's literally impossible to comparison shop healthcare, and I've tried.

                  Indeed this is true.

                  The solution to this, though, is to make it required for hospitals to post their prices, as well as to make it illegal for hospitals to give preferential rates to insurance deals.

                  • iguy 1452 days ago
                    Something like this would be great. And the posted prices ought to include all complications / unexpected weird things -- they have the information (and the volume) to average such costs, you don't.

                    But not trivial to implement correctly. What exactly is the menu of procedures, and who standardizes (and updates) it? It would be much harder to comparison shop if there were a million entries (and every hospital offers a subset). Can hospitals select their patients, e.g. post great prices & outcomes by only accepting patients under 50 (or just with few other health issues)?

                • BurningFrog 1451 days ago
                  > You're wrong. "Bad PR" has not worked at all to encourage the healthcare industry to fix medical billing on its own. See this article for an example:

                  Huh?

                  The question I answered was about "people who are literally passed out and bleeding out on stretchers to price shop"

                  I agree that medical billing is a corrupt disaster.

                • henrikschroder 1452 days ago
                  The funny thing is that dentists are perfectly able to give you an accurate price quote, taking your insurance into consideration, and before you've committed to anything.

                  If they can do it, why the fuck can't doctors do the same? The system is so obviously rotten.

                  • yks 1451 days ago
                    I don’t know, maybe I don’t have luck with my dentists or my insurance but on every bill some procedures are either downgraded or outright refused to be covered based on some technicality. As usual, insurance finds a way to scam you.
                  • neltnerb 1452 days ago
                    Agreed, my neurologist can't even confidently tell me blood work absolutely required for my condition will be covered, much less the price.

                    It took years to find that almost every facility nearby does the tests he orders for no copay at all. But Beth-Israel doesn't see a problem with charging literally over a hundred dollars after insurance for a blood draw.

                    I guess a very big and very evil problem for another time, but our health care system is a house of cards.

              • jacobsenscott 1452 days ago
                Bad PR doesn't matter much when demand is inelastic. Everyone hates comcast, their cell phone provider, and the oil companies for example. They are all doing just fine.
                • BurningFrog 1451 days ago
                  At least the two first are semi monopolies in highly regulated industries. Much like your local hospital.

                  No one hates their food stores that I'm aware of, even though that demand is at least as inelastic as for healthcare.

            • stale2002 1452 days ago
              If you aren't able to purchase food, you die. And yet food prices are reasonable in almost the entire world.

              Also, I would like to point out that the vast majority of medical issues are not emergencies.

              Maybe there is a reasonable argument that ambulances, and emergency rooms should be highly regulated. But, fortunately, the vast majority of medical issues do not involve going to an emergency room.

          • WalterBright 1452 days ago
            > If healthcare was really a capitalist endeavor then it wouldn't cost $5k for three stitches.

            Before the government got heavily involved in healthcare in the 1960s, healthcare was cheap.

            Edit: requested cite: https://www.thebalance.com/causes-of-rising-healthcare-costs...

            • PaulDavisThe1st 1452 days ago
              Citation required. Preferably with inflation adjusted dollars, compensation for expansion of treatment options, and the Reagan decision that ER departments are legally required to treat any patient.

              Feel free to make a moral case against Reagan's decision if you feel like it.

              • WalterBright 1452 days ago
                I received 3 stitches in my face around 1987 from the emergency room. Cost was $289. I don't know why I remember the figure. Today that would be $658.08 according to the inflation calculator at https://www.usinflationcalculator.com/

                I bought a 383 big block engine for my dodge, and a friend of mine was helping me move it into the garage. I tripped and fell on top of the block, making quite a gash in my eye socket. Lucky I missed my eye. Still have a scar! Sadly, the block turned out to have a crack in it and was not salvageable.

                • Cyberdog 1452 days ago
                  You put a crack in an engine block with your head?
                  • WalterBright 1451 days ago
                    That would make a better story, but the crack in the block was discovered when I set about rebuilding it, and had nothing to do with my soft head hitting it. The machined edges of a block are sharp, and by falling on it it made a deep gash in my face. Bled all over the engine and the floor.
                    • Cyberdog 1450 days ago
                      I know, I know. I was misinterpreting your story for comedic effect. :P
                  • umanwizard 1452 days ago
                    He didn’t say his head caused the crack, just that there was one.
                • foldr 1452 days ago
                  >Today that would be $658.08

                  That's still more than most Americans could easily afford. And that's for stitches.

                  • WalterBright 1451 days ago
                    That's also 20+ years after the big inflation in medical prices started. I did think it was high at the time, likely why I remembered the number.
                    • foldr 1451 days ago
                      If you go back as far as the 60s then you're not really comparing like for like. People don't want the level of medical care that the average American got in the 1960s.
                      • WalterBright 1450 days ago
                        Stitch technology hasn't changed.
              • jacobsenscott 1452 days ago
                • gamblor956 1452 days ago
                  This citation supports the point of the comment you are replying to.

                  Healthcare was cheaper before Reagan interfered in the health care industry to artificially inflate costs to the financial benefit of his buddies.

          • giantrobot 1452 days ago
            What regulations are those exactly?
            • WalterBright 1452 days ago
              One is you need a medical license to practice. To get a license, you need to be a graduate of an approved medical school. Slots in medical school are controlled by the AMA, which has a strong interest in limiting the number of doctors being minted, to keep doctor fees high.

              That's just one.

              • sct202 1452 days ago
                Part of the reason behind restrained increases to med school spots is because traditionally they tried to get very close to full placement to residencies. In recent years, med school attendance has grown much faster than residencies, and that would be a very terrible position to be in to go $400k+ in debt and pass med school to only get stuck when you don't place into a residency the first round. https://www.aamc.org/news-insights/us-medical-school-enrollm...

                EDIT: There are also separate osteopathic graduate schools and foreign med schools (Caribbean) that aren't limited by the AMA and still funnel thru the same match program.

                • WalterBright 1451 days ago
                  Sounds like a chicken-and-egg problem. Which came first - the number of AMA slots, or the number of residency openings that matches it?
              • kevin_thibedeau 1452 days ago
                I know a trained foreign surgeon who switched to law after immigrating because of this red tape.
                • Melting_Harps 1452 days ago
                  > I know a trained foreign surgeon who switched to law after immigrating because of this red tape.

                  I had a few of my undergrad bio and chem labs with a Vietnamese doctor who came to the US, I always tried to be in his group whenever possible because he had the most insight into the Industry as a result of his transition.

                  Apparently, because he was educated and practiced in Vietnam he was forced to have to repeat the entire process to enroll into Medical school. I'm not sure if was on loans or doing it on his own, but he must of have been determined to make it happen, because I'd probably do the same as your colleague if forced to do it all again.

                  He was an older guy, I was 18 or 19 so anything over 25 was 'old' to me but I think he was in his 30s while we were in our 2nd year courses.

                  With all of the polemics surrounding COVID19, I think the least we should do is take away the power of the AMA-like Institution to determine how many medical students can be enrolled into any program and make any necessary accommodations to ensure it happens.

                  Making the current medical staff do the equivalent of an understaffed, under supplied death march has to make reason prevail regardless of our stance.

                  Private and Public medicine is an issue to come back to, but being short staffed in a pandemic is suicidal--Italy recalling retired medical staff was alarming, but also highlighting that a Public Medical system is not yielding the panacea many suggest, either.

                  And for anyone asking for a source on the AMA's practices look at his, I remember reading this in 2005 as I was in school, and being schooled and trained as if I wanted to take MCAT because of the looming shortages caused by retiring boomers, even though I had no interest in Medicine:

                  https://usatoday30.usatoday.com/news/health/2005-03-02-docto...

            • gpm 1452 days ago
              The ones that let them not tell you how much they will charge you for a service until after they provide it, and then still demand payment (and have the government enforce that demand)?

              (I'm pretty sure that's not what the person you were replying to is going for - but it is a very problematic piece of the regulatory environment which is unique to hospitals)

            • mixmastamyk 1452 days ago
              The certificate of need is one regularly mentioned.

              The attachment of medical insurance to employment is another.

              If you don't already know at least a few of these, you're probably a student or not interested.

            • BurningFrog 1452 days ago
              Healthcare is probably the most regulated industry in the country.

              Nobody knows all the regulations, and asking for a list seems a bit clueless.

              • giantrobot 1452 days ago
                If you're going to claim specific problems are caused by regulations is not too much to ask which specific regulations cause specific problems.

                What's clueless is to use the word "regulations" like it's some incantation.

                Healthcare is heavily regulated because medical care is not usually something you can restitute after the fact. If you sell me a defective widget my life doesn't depend on I can get my money back or sue you to get it back. If a doctor sticks a defective medical widget in my body and I die, I can't really do much about it afterwards.

                I'd prefer that doctor's certifications have some sort of regulatory oversight. I'd also like medical widgets to be regulated so there's stringent QA and manufacturing process qualifications.

        • jlebar 1452 days ago
          > A hospital charged my friend $5k for three stitches. They could pay 8 cents more per mask. But they care more about $$$ than the long term health of the country.

          Couldn't we say the same thing about the owner of this factory? He could gear up and then pay unemployment for laid-off workers after the crisis ends; he did it once.

          I am also not a fan of our health-care system, but...it's complicated.

          • hedora 1452 days ago
            Last time, ramping up almost bankrupted the business, and left it with an extra $1M in debt.
            • moftz 1452 days ago
              Seems like the government should just remove the risk of being the business of critical supplies. Obviously we didn't have enough supplies in stockpile it would benefit the US to have a dedicated factory to produce a constant stream of PPE for the next 10 years. This stuff is so cheap to make that not stockpiling it is just stupid. These kind of supplies are used by everyone everywhere that it's a waste of time and money trying to negotiate critical supply stockpiles on the local or state level. This needs to be at the national level to be able to leverage the power of the US govt. Using the DPA, the govt can come into 3M or any of the other manufacturers and say "you are going to sell us 50M masks per year for the next 10 years". After a couple years, you have a healthy stockpile that can either be used in a pandemic or changed out for fresh supplies over time. It's a shame to throw out expired medical supplies but having a consistent supply chain going for years is good to make sure that there is a standard product out there that you don't need to worry about changing.
              • vl 1452 days ago
                FYI, 50M masks in pandemic is 1/7th of what country needs in a day.
    • piokoch 1452 days ago
      That's the way free market works. If masks were more expensive, it would make sense to invest and produce more of them. Instead governments and institutions all over the World are trying to keep prices low and the only result they get is shortage of masks (and similar equipment).
      • darkerside 1452 days ago
        Free market solutions break down when demand is inelastic. Governments are trying to prevent price gouging due to inelasticity. The root of the problem is supply, so stop the government intervention and you pay more money for the same problems.
        • DuskStar 1452 days ago
          Free market solutions break down when demand AND SUPPLY are BOTH inelastic, and that's only if you count 'price goes up' as market failure. Think of it this way - the demand for food is inelastic. Does this mean free market solutions for food have broken down?

          Governments preventing price increases just means that supply doesn't increase nearly as quickly as it would otherwise.

          • darkerside 1451 days ago
            Letting masks sell for $25 a pop so that companies are incentivized to build infrastructure to churn them out at an optimal rate 6 months from now just doesn't seem like a realistic solution
            • DuskStar 1451 days ago
              Letting masks sell for $25/ct now so that companies can afford to go to 24/7 production NOW and not have to worry about paying unemployment in 2 months might be, though.
        • bretthoerner 1452 days ago
          > The root of the problem is supply, so stop the government intervention and you pay more money for the same problems.

          The company in the article is closed on nights and weekends. Don't you think there's a price at which they'd stay open, thus increasing supply?

          • RhodesianHunter 1451 days ago
            You literally cannot scale up the production of the underlying fabric that goes into N95 masks quickly. These assembly lines take 6 months to set up.

            There is no price at which these masks can be sold which will meaningfully impact supply before Covid 19 burns itself out.

            Such price increases are honestly more likely to incentivize people digging their P100 masks out of their garages and workshops and donating those.

            • ric2b 1451 days ago
              They're closed on weekends and nights. The number of machines isn't what's keeping their production capacity down.
            • DuskStar 1451 days ago
              And this factory makes surgical masks, not N95s. The material is not a bottleneck as far as I'm aware.
    • WalterBright 1452 days ago
      Shortages are the inevitable result of anti-gouging laws.
      • jayd16 1452 days ago
        The article is about not being able to get long term contracts to actually make ramping up production worthwhile. Being able to gouge for a few months doesn't seem like it would help that.
        • icelancer 1452 days ago
          Sure it would. If he could increase his margin by 500% he wouldn't need the long term contracts as much due to the massive surplus of profit he'd be able to bank while also paying his employees double time.
          • jayd16 1451 days ago
            As the article lays out, it doesn't make sense to ramp up for a month when the demand will die down. The company can't compete in normal circumstances. It would make way more sense to simply gouge the 500x prices at the current capacity and wait it out.
        • WalterBright 1451 days ago
          If gouging were legal, a mask maker could easily go to three shifts a day instead of one, and would do everything he could to make more.

          But with it illegal, you'd be relying on self-sacrifice and altruism, which isn't very reliable. Greed is a much more effective motivator.

    • gumby 1452 days ago
      He could make two SKUs, one at the regular price made by the normal shift and one made on the other two shifts with different cost structure and pricing.
      • whatshisface 1452 days ago
        That's exactly the type of loophole abuse that a judge would be likely to strike down.
        • gumby 1452 days ago
          I didn't mean it at all as a loophole -- I said different cost structure.

          I read his article: he claims can't get the volume to justify adding more shifts. Well, right now he could, even though the additional shifts would presumably cost more (more expensive labor costs, more inputs (e.g. energy), and likely a higher cost for the new raw materials wheich he'd have to get on the spot market as opposed to the long term agreements he already has.

          There's really nothing stopping him from doing this, except he's busy appearing on Bannon's podcast. And he says "well it would just be a drop in the bucket" -- likely it would be meaningful for Texas though, and then Texas's external demand would drop a little, allowing someone else to get access. This is how the economy is supposed to work.

          But instead he says the government should give him a long term contract. Well boo hoo. He describes the capabilities he has but complains instead of taking advantage of them. And the newspaper doesn't call him on it.

          • im3w1l 1452 days ago
            It's easy to sit on the sidelines and say "nothing is stopping him". Even if his fears and concerns are unfounded, I don't doubt they are sincere.
          • mixmastamyk 1452 days ago
            And when you abandon them next month, then what?
            • gumby 1452 days ago
              At this point there are many people who would be glad to have a month's income!
              • mixmastamyk 1452 days ago
                People, but not businesses with capital expenditures.
                • gumby 1451 days ago
                  There's typically not much cap ex when you add another shift as your'e running when existing equipment is idle. He even mentions this possibility. But any such risk should be baked into the higher price. Nobody's going to complain that he has to charge more for added emergency volume.
                  • mixmastamyk 1451 days ago
                    It's as if you haven't read the article or discussion.
    • godelski 1452 days ago
      I suspect that there would be major outcry about people paying $1/mask. People are going after just about everything right now. Unfortunately I'm seeing a lot of mob mentality. But that could be selection bias.
    • gruez 1452 days ago
      IANAL, and also too lazy to research the relevant laws for the jurisdiction he's in, but wikipedia[1] says there are usually exceptions for price increases that can be justified.

      >Laws often include exceptions for price increases that can be justified in terms of increased cost of supply, transportation, demand or storage

      [1] https://en.wikipedia.org/wiki/Price_gouging#What_the_law_pro...

      • mrosett 1452 days ago
        Those exceptions are somewhat useful, but they're not enough.

        First, he may be in the clear legally, but that doesn't mean he has no legal risk. Some enterprising DA could try to dispute that that his price increases could be justified.

        Second, I tried to be precise when I said "anti-price gouging sentiment." Even if it's legal to raise prices, the risk of a public backlash makes it safer to just keep the factory working normal hours. That's a harder problem to fix than bad laws, though.

    • edge17 1452 days ago
      There seems to be a lot of misconceptions about N95 style masks. N95/KN95 are made from melt-blown nanofiber fabric which 20x'd in price due to sudden demand and constrained supply, through early March from its price 6 months prior. When your inputs 20x in price the actual cost of the product is naturally going to increase.
    • symplee 1452 days ago
      Quick four and a half minute video going into a little more depth about the above concept:

      https://www.youtube.com/watch?v=_2STbdWkgyg

    • kevingadd 1452 days ago
      I get that this is a hypothetical but the idea of his factory workers getting paid anything more than a couple extra bucks an hour for overtime is ridiculous. That simply doesn't happen unless owners are forced to do it.

      Is it supposed to be a good thing that people would work 100hr weeks during a pandemic and compromise their immune systems? Why not just hire more staff and have them work healthy 40 hour weeks? It's not as if unemployment is low right now.

      • mrosett 1452 days ago
        The article makes it clear that he's looking to hire more people, but a) finding people and training them takes time and b) if he hires too many, he has to fire them later (and incur substantial costs related to that.)

        Let me reframe is this way: There is some emergency wage where his employees would enthusiastically work substantially more than they are right now. There's some price-per-mask where the owner would enthusiastically pay them that wage to get extra masks out of the factory. That price-per-mask would still count as a steal compared to the cost of a healthcare worker developing COVID-19. Everyone would be better off if hospitals were paying that price. So why aren't they?

        • ardy42 1452 days ago
          > Let me reframe is this way: There is some emergency wage where his employees would enthusiastically work substantially more than they are right now. There's some price-per-mask where the owner would enthusiastically pay them that wage to get extra masks out of the factory. That price-per-mask would still count as a steal compared to the cost of a healthcare worker developing COVID-19. Everyone would be better off if hospitals were paying that price. So why aren't they?

          Because your analysis is wrong? You seem be assuming workers are some kind of machine that turns wages into output, and the more wages you put in, the more output you get, and you can freely adjust output by adjusting wages. You also seem to thing he has a lot of pricing flexibility due to the demand. I think those ideas have several problems:

          1. There's an obvious limit to individual output, and his existing employees are probably operating close to that, especially since his business was already under stress.

          2. Human psychology is complicated, and you're ignoring morale. A logical robot might have the same satisfaction with a certain wage before and after he's made much more than that, but a human probably won't (and that's even an oversimplification).

          3. His customers are probably going be unhappy with him for raising prices in a crisis, regardless if he had good reasons for it or not. He's already dealing with the problem of customers leaving after a crisis for cheaper competitors, and a price increase now would probably make that problem even worse.

          • mrosett 1452 days ago
            > There's an obvious limit to individual output, and his existing employees are probably operating close to that, especially since his business was already under stress.

            I'm as big an advocate as anyone for sustainable work practices, and I absolutely agree that most of the time working longer hours is counterproductive over the long term. But isn't working on an assembly line during a crisis pretty much the canonical counterexample? Output scales linearly with time even if you aren't feeling creative/fresh/energetic, and there's an urgent need for more masks now.

        • lonelappde 1452 days ago
          Why can't he hire people on a fixed term contract to avoid unemployment?
          • WalterBright 1452 days ago
            Businesses that try that often get sued by those employees after-the-fact to get the benefits of employment. Then the courts decide if they were really employees or not.

            Like the current Uber driver case.

          • BeetleB 1452 days ago
            > Why can't he hire people on a fixed term contract to avoid unemployment?

            There are laws about what constitutes contractors vs employees - both federal and state. If you satisfy N out of M items in a checklist, you are an employee, regardless of whether both parties want you to be.

            Controlling how you do your job is one of them. If the employer directs how you can do the job and doesn't give you freedom to do it your own way, that's a major item.

            If your employer doesn't let you bring your own equipment, that's another one.

            If you do not have a chance of losing money on the contract, that's another one. Say you hire a contractor to repair your roof, and he screws it up. Typically he is expected to fix it even if he ends up with a net loss (or he can refuse and not get paid at all). When an employee screws up, the worst that will happen is he'll get fired.

            And so on.

            It's very unlikely these people can be contractors unless he's hiring experienced folks who know the equipment.

            • jlokier 1452 days ago
              Fixed term employment contracts are an option too. They are quite common. E.g. nearly everyone in academia.

              I think you have misunderstood the suggestion; it's not about contractors vs. employees, it's about fixed-term versus not.

              Fixed-term employees are not classed as contractors. They are regular employees with all the usual benefits and rights of employement - except that it comes to an end at a pre-determined date, unless extended.

              • fidelramos 1452 days ago
                How do you expect businesses to gamble with a predetermined end date that will probably not match the actual end of the pandemic?

                Regulations have many unseen side effects that end up causing damage, people should think harder about them and they would realize that in many cases (most in my opinion) they do more harm than good.

              • BeetleB 1452 days ago
                I see. So what happens when the contract ends? Can they not apply for unemployment? And if they do, will it still not affect the business's premiums?
          • austhrow743 1452 days ago
            Likely such a contract would be unattractive to potential desirable candidates unless he could pay a rate that would require higher mask prices.
            • kevingadd 1452 days ago
              There are plenty of unemployed people who need to pay rent. If such a short term contract - getting paid to do relatively safe work and help fight the pandemic by making masks - isn't appealing that's probably because he's not paying enough.

              Everyone's already charging more for masks, he should be able to manage a decent market rate. To begin with, unemployed people in a pinch are probably willing to accept slightly lower pay.

    • swiley 1452 days ago
      But then he would be “profiting off a crisis” and that makes him a horrible person.
    • droithomme 1452 days ago
      > normal price (ie $1/mask)

      I paid $4 per mask on a 2-pack at Walgreens back in mid-January. That's the normal price. All this $1 talk and anything about is gouging is communist propaganda. For shame, communists. $4 is the non-communist, non-capitalist normal price, based on empirical pre-crisis FACTS. EVERYTHING else is propaganda.

      • Zenbit_UX 1452 days ago
        N95s? The articles about surgical masks and they cost, $0.02ea from China.
    • fiblye 1452 days ago
      Even if companies were legally and easily selling masks for 100x normal price, I doubt any employees on the factory line would ever make more than a small double digit percentage in overtime payments.
    • bsder 1452 days ago
      You are asking the business owner to arbitrage his business (place a bet that he can carry expenses until some crisis allows him to gouge).

      Why do you want the business owner to arbitrage his business when the people who do arbitrage for a living won't do it for him? If the experts at arbitrage declare it a bad idea, then he probably shouldn't do it either.

      And he's not. That's sensible.

      • keanzu 1452 days ago
        Arbitrage is a transaction that involves no negative cash flow at any probabilistic or temporal state and a positive cash flow in at least one state; in simple terms, it is the possibility of a risk-free profit after transaction costs.

        https://en.wikipedia.org/wiki/Arbitrage

        There's no arbitrage for the factory taking a loan, it is just a business risk.

    • bsder 1452 days ago
      Someone like Bill Gates or Warren Buffet could have this man up and running 24/7 by simply providing a guaranteed contract valid for 5 years. Given that a million dollars was a big deal to this guy, it seems like a contract for $10 million would be way more than sufficient.

      NOT A SINGLE WEALTHY PERSON has done this. None. Zero. Nada.

      There's your answer as to the priorities of capitalism.

      • gruez 1452 days ago
        Can't this argument be applied to literally any project that benefits society? eg. "Bezos should be funding roads/schools/healthcare, but he isn't because he's a greedy fatcat!" This is a role for the government, not philanthropic patrons.
        • Finnucane 1452 days ago
          Indeed, this is basically correct. The premise should be rephrased as ‘corporations and the wealthy should pay their fucking taxes so the government can provide services.’
          • PaulDavisThe1st 1452 days ago
            Which could be rephrased as "governments should write tax law such that corporations pay taxes, to help governments provide services".

            Granted, companies work hard to be devious. But when we allow them to spend their profits on a whole slew of stuff that reduces their tax rates to zero percent, it seems churlish to blame the companies. Government specifically waived taxes in order to encourage e.g. R&D and now we, the people, are paying the price of the details of a large raft of this sort of law making.

            • Finnucane 1452 days ago
              No, government waived taxes because wealthy donor as and corporate lobbyists pay politicians to give them good tax breaks.
              • PaulDavisThe1st 1451 days ago
                Governments use tax law all the time to create incentives and disincentives to various sorts of things.

                Governments also use tax law to reward specific groups of people, for reasons both honorable and nefarious.

                Identifying the motives for a given tax law is often quite difficult. Companies currently get to avoid most taxes on profits that are reinvested in activities that they certify as "research and developement". Is this possible because the government wants to encourage R&D or as a payoff to their political sponsors, or both?

                It's non-trivial to answer, but what's easy to say with certainty is that is an example of _how_ companies avoid paying taxes, and if you want to stop it, you need new tax laws which don't permit/encourage this.

  • burlesona 1452 days ago
    It is shameful that the US has abandoned its manufacturing base and allowed its productive capacity to be destroyed. The pandemic exposes how weak this makes us, but I don’t know that things will change when the pandemic eventually ends. Once things calm down, I doubt people will retain the ability to see the downsides of always chasing the absolute lowest cost supplier.
    • erentz 1452 days ago
      It is a shame. But what’s interesting about this is that even the manufacturing base we do have could be scaled up quickly to meet more of the demand, yet it’s not. So why does it save us to have manufacturing base if you won’t scale it to meet surge demand when needed.

      The hospitals not signing contracts with him is bad. But probably the more surprising to me is that the government isn’t calling him up to say “hey we will pay you $BIG to start producing masks for us 24/7 that we will distribute”. Where $BIG is enough for him to offset his concerns. After this pandemic slows down the government can continue buying from him to restock (and constantly refresh) the stockpile.

      How has the government not by now started to track all the items we need, all the items we have, and called every damn company that can possibly produce those items or know who can to tell them to start cranking? Why do we continue to hear about discoveries of masks in warehouses and the like? The logistical failures here seem to be extreme.

      • karlkatzke 1452 days ago
        Depends. What contracts will he have to take on to meet that? I think that’s his complaint. He can’t get what he needs on the spot market most of the time, he has to sign a supply contract and machinery maintenance contracts and everything else. At best, if he can’t make use of the extra capacity when the world isn’t experiencing a critical pandemic, he breaks even on the pandemic work. At worst, he loses his shirt again.

        The materials you are talking about aren’t usually found on a warehouse shelf because they deteriorate over time. You wouldn’t want to put expired material through a machine because it becomes brittle and breaks.

        And as for why we haven’t started tracking materials more closely? Kushner’s running this show. The word you’re looking for is incompetence.

      • taneq 1452 days ago
        This is exactly like all of the "skills shortage" panics we regularly see here. It's not an issue of being unable to produce the item, it's an issue of being unable to produce the item at as cheap a price as the best price we've had from the lowest bidder during ideal circumstances.
      • mjevans 1452 days ago
        I want to expand on that refreshing the stockpile idea.

        The equipment is perishable (on the range of years) and should be rotated. Most things probably are.

        Any such stockpile should have a half-life rotation period, where items at the half life are sold in to the market at a slight discount and the stockpile continually refreshed. Ideally the government should also be buying or making in bulk and thus their discounted price might actually be competitive.

    • crazygringo 1452 days ago
      There's nothing "shameful" about it whatsoever.

      It's not like manufacturing is some moral goodness that we've lost, or a defect in the nation's character. Manufacturing isn't "better" than services. It's not more honest or anything.

      Free trade raises everyone's living standards. It's economically incredibly wasteful to manufacture everything locally.

      Countries absolutely have to make decisions about retaining certain capacity for essential items in case of war or emergency... but everything has tradeoffs. There's nothing "shameful" here, it's just cost-benefit.

      On the other hand, if you don't have the manufacturing capacity and you don't stockpile? Yeah, that's shameful. The fact the US didn't have a national stockpile of emergency masks for both civilians and doctors is shameful.

      • burlesona 1451 days ago
        All redundancy can also be described as “waste,” right up until things fail. The shameful part is that we’ve allowed our entire economic system to operate on razor thin margins and just in time delivery etc, not recognizing how this makes things fragile.

        If our supply of cosmetics or children’s toys works this way, fine. But our food, medical, and military supplies most certainly should not, and there’s a decent gray area up for debate between those extremes.

        What’s tragic is the way this thing has just caught America napping and how ineffective our response has been.

      • atomi 1452 days ago
        There is a lot to be said of the environmental costs of shipping massive loads of product across the world.
        • Dylan16807 1452 days ago
          Poorly-regulated sulfur emissions aside, container ships are very efficient per ton.
          • ironmagma 1452 days ago
            Efficiency is not the issue, it’s energy being used that wouldn’t need to be if the items were produced locally.
            • jlokier 1452 days ago
              That comparative advantage thing isn't just about cheap labour in a country supplying the avarice of another country.

              It can reflect underlying advantages in other respects, such as location of source materials, and availability of energy for production in relevant quantities.

              Below some threshold of energy use to transport, it will use less energy overall to produce some goods far away and transport them, than to produce them locally.

              I'm not sure if shipping on the oceans is below that threshold, but I wouldn't be surprised because it's pretty energy efficient for the amount transported.

              • RhodesianHunter 1451 days ago
                Let's stop pretending this has anything to do with natural resources or energy costs.

                This is 100% about the cost of labor, and the fact that China is moving poor rice farmers out of the country and into these jobs and giving them exactly zero labor benefits or protections

                • Dylan16807 1451 days ago
                  Even if we moved it out of China, production for this kind of thing would still rarely be local.

                  And factory wages in China are rising. The money saved isn't that big. The huge and currently enduring advantages areas of China have are in supply chain availability.

                • jlokier 1451 days ago
                  That's certainly a factor, perhaps the largest factor.

                  But it's not the only factor, and not everything is about China.

            • Dylan16807 1452 days ago
              If you can get all the ingredients locally.

              And the bigger your facility is, the more efficiently you can transport things in and out. Very local production means work trucks running around wasting fuel all over.

        • missedthecue 1452 days ago
          And it would be unimaginably more pollutant for each country to manufacture its own everything.
    • philwelch 1452 days ago
      When this is all over, we’ll have a lot of unemployed workers and a devastated service sector. It will represent an opportunity to rebuild an industrial base.

      During the Second World War the US not only managed economic autarky, but we had enough agricultural and industrial capacity left over to feed, arm, and equip much of the free world. We lost that through complacency and the past 40-50 years have been a series of escalating kicks in the teeth. Maybe this will be enough for things to change.

      • gruez 1452 days ago
        >It will represent an opportunity to rebuild an industrial base.

        How would this work? Who is going to buy all those expensive (by asian standards) american-made goods?

        >We lost that through complacency

        AFAIK we lost it because of globalization, which caused the labor market to be flooded cheap labor from developing countries.

        • philwelch 1452 days ago
          “Cheap labor” is an excuse IMO. The US firmly fell behind other countries (most famously Japan) in manufacturing expertise in the late 20th century. We buy a lot of stuff that’s made in rich, expensive-labor countries like South Korea, Japan, and Taiwan. Even some Chinese manufacturing hubs are rapidly approaching first-world standards of living. Cheap labor might be enough to win a niche in stuff like textiles but there’s no reason you can’t manufacture electronics in a first world country.
          • nojvek 1451 days ago
            In the world of modern technological marvel, robots should ideally be cheaper than human labor. Toyota employs fewer humans per car produced than Tesla. They simply invested in their industries such that mass production techniques makes things cheaper.

            Japan, South Korea, Taiwan, are all examples of wealthy and industrialized nations.

            • philwelch 1451 days ago
              I suspect "per car produced" has a lot more to do with Toyota producing higher volume than Tesla. At least according to the stuff that's been popularized and written about, the Toyota Production System de-emphasizes automation. The rationale being that until you've refined the manufacturing process through experience, you don't know which steps to automate.

              Think of it this way: if you rely upon robots too much, you're making a huge bet that you can design the manufacturing process from scratch and basically get it right the first time. If you get something wrong, it's going to be expensive to go back and improve it because you need to rework all of the automation. Conversely, if you design a less automated manufacturing process, more of the work is done by human beings, who are typically smarter and more adaptable than robots. That way, if you come up with process improvements later on, you can just teach it to the humans. Better yet, the humans themselves can think of their own process improvements.

              At any rate, Toyota produces millions of cars in the United States on an annual basis; clearly the cost of American labor isn't a problem for them.

        • erik_seaberg 1452 days ago
          This. Trickle-down economics does work, but when capital has access to global markets, it trickles way, way down past our own labor pool.
      • greedo 1452 days ago
        The fact that most competing economies post WW2 were in ruins doesn't factor in at all? The US was extremely fortunate to have no real competition from any other countries for a decade. And then American companies didn't pay attention to when Japan and Europe started to compete.
        • philwelch 1452 days ago
          That factors into the complacency for sure.
      • beerandt 1452 days ago
        Post wwii had a lot to do with repurposed war-machine factories that were already paid for. Which happened to align with a new glut of available labor. You've only got half the equation here, at best.
      • perl4ever 1452 days ago
        "During the Second World War the US not only managed economic autarky"

        Suppose someone said that's completely untrue, could you back your assertion up?

    • blackrock 1452 days ago
      In America, it’s more profitable and glamorous to make fake startup companies like Snapchat, or yet another Todo app, than to make boring facemasks and N95 respirators.

      Like, when was the last time a pandemic ever happened? Pshh.. not my problem.

    • UncleMeat 1452 days ago
      The US hasn't abandoned its manufacturing base. We make more stuff now than ever before. We just use fewer people to do this.
    • deburo 1452 days ago
      There has been a lot of discussions politically around that overall, the covid merely but harshely exposing the medical aspect. It's a space to keep an eye on after this pendimic, I wouldn't be so pessimistic about it.
  • philcrocket 1452 days ago
    Wow. Looks like he learned his lesson. On the other hand, we American consumers haven't.

    I'll echo what most have said here already: the moment this crisis is over, we'll be overseas trying to find the cheapest possible price. We don't care about keeping the local guy in business. We care about our margins.

    I'd hate to say it but what made us great, could very well be our downfall...

    • blackrock 1452 days ago
      “Your margin is my opportunity.”

      -Jeff Bezos

  • mike_h 1452 days ago
    This is a red herring issue. The problem isn’t that Chinese won’t sell the US masks. It’s that the US is trying to buy too many too late. We could have spent the past decade stockpiling them.

    American protectionism is actually part of what created this problem: it was only this week that the Chinese KN95 standard was approved for use by the FDA.

    • partiallypro 1452 days ago
      Ironically USA Today ran a piece (not opinion) about the Obama administration using the strategic stockpile for various things during his tenure, but never refilling it.
      • shakethemonkey 1452 days ago
        Here, Congress is more to blame than the Obama Administration, who clearly wanted more money for this. Congress budgeted far too little money, and the administration rightly prioritized medication over masks.[1]

        [1] https://www.propublica.org/article/us-emergency-medical-stoc...

      • weaksauce 1452 days ago
        yeah I see the rationale for it being that they were developing a new mask type that would be comfortable and reusable that they could stock up on. they didn't think that the entire global infrastructure would be so overwhelmed that they couldn't procure them in time. turns out they should have known to keep a reserve of them(100m was the number they would have stocked, though 300m is needed for this particular pandemic) now obama's team didn't hoard enough indeed and he deserves a bit of blame but it's also 3 years into trump's term... at a certain point you do need to accept responsibility for your failings and not reupping that supply is a failing.
      • kevingadd 1452 days ago
        Yeah, over the last decade+ a mixture of legislators refusing to fund the stockpile and government officials opting not to restock parts of it has left it pretty heavily depleted. When given limited resources you're going to prioritize the most important things and they ended up choosing stuff other than masks and ventilators.
      • lonelappde 1452 days ago
        Even so, that administration ended 3 years ago.
  • jmckib 1452 days ago
    The question that this story doesn't answer (unless I missed it) is why hospitals are refusing to sign contracts right now when they are so badly in need of masks. Either that, or pay whatever price is necessary to get the factory to produce more masks without a contract. Is it lack of budget? Legal/administrative hurdles? Something else?
    • greedo 1452 days ago
      Because the buying groups know that when this is over, they can go back to buying cheap PPE from overseas.
    • x0x0 1452 days ago
      For starters, this guy doesn't actually make the masks hospitals need. They need n95 masks; this company makes plain surgical masks.
      • dwaltrip 1452 days ago
        Don't hospitals need both?
        • x0x0 1451 days ago
          In general, sure, but since n95 masks protect against corona and plain surgical masks don't...
    • Element_ 1452 days ago
      What incentive does a private hospital have to stockpile supplies for a pandemic?
    • icelancer 1452 days ago
      Hospitals are the reason we have shortages. There is plenty of supply. Their layers of bureaucracy and refusal to pay prices commensurate with demand are the reasons we don't have enough PPE.
    • missedthecue 1452 days ago
      Almost all hospitals don't make profit. They don't have the $$ to sign contracts like that for everything they need.
      • lonelappde 1452 days ago
        They don't make corporate profit because they funnel the money to management salaries and adminstration companies.
        • missedthecue 1452 days ago
          Whether this is true or not doesn't change my point
        • greedo 1452 days ago
          And many operate as non-profits to shelter income.
  • gruez 1452 days ago
    I took a quick skim of the article and it looks like all it would take to solve this problem is for him to raise prices (clearly the current prices are below the market clearing rate) and forcing customers to pay upfront (or at least put the money in a trust or something).

    >“Last time he geared up and went three shifts a day working his tail off,” the mayor recalled. “As soon as the issue died, he didn’t have any sales. He had to pay unemployment for all these people, and he had to gear down.”

    Doesn't seem to be a real issue if those extra costs are factored in

    >Hospitals promised to stick with him afterward, but they broke their promise. The allure of cheaper Chinese masks was too great for hospital purchasing groups to ignore.

    Ask for money upfront, or get it in writing and sue later.

    • karlkatzke 1452 days ago
      The machinery require maintenance and software contracts from the suppliers.

      The raw inputs require delivery contracts from the suppliers and is currently also in short supply. He can’t get his same preferential pricing outside of his supply contracts, or his suppliers may not even be able to deliver it, or they’d require he increase his contract buy.

      He may not believe in hiring hourly manufacturing employees on contract without benefits. The amount of time he spends training them and watching them cycle in and out has a cost.

      Sure, it could be done. Is it worth it? Obviously not, or he’d be doing it.

      • gruez 1452 days ago
        >Sure, it could be done. Is it worth it? Obviously not, or he’d be doing it.

        All of the factors you listed can be conceivably factored into the price and/or be part of a purchase commitment. The fact it hasn't either means:

        a) the increased price isn't something the market is willing to bear. I'm skeptical about this because the presence of scalpers on the market makes me think that there are at least some consumers willing to pay insanely high costs for masks. I will also go on a limb and say most people would probably be willing to pay 2-3x "normal" price for N95 masks (a quick search on archive.org says they normally retail for $1/ea when purchased in modest quantities).

        b) the owner is behaving irrationally from a profit maximizing perspective, perhaps because he got burned last time or thinks any profit isn't worth the hassle.

        • backslash_16 1452 days ago
          It's too easy as a catch-all to say "everything can always be priced in". Right now 48 states (I can't find anything saying all 50) are in a state of emergency, which prohibit raising prices more than around 10% or 20%.

          I'm bringing up these points because over the last month I have come to also think either state or federal government needs to take responsibility and buy these makes from a local producer - even when there is no pandemic.

          I don't think our connected web of hospitals, suppliers, and insurance companies have the right incentives to use local, "expensive" suppliers when there are lower cost non-local suppliers and these non-local suppliers have stocks.

          [1] Price gouging percentages - https://www.natlawreview.com/article/coronavirus-emergency-d...

          [2] State of emergency - https://www.businessinsider.com/california-washington-state-...

    • BurningFrog 1452 days ago
      Raising prices in a crisis is probably criminal under price gouging laws.
      • gruez 1452 days ago
        Addressed here: https://news.ycombinator.com/item?id=22789745

        Also, if the situation is really dire, I'm sure the government can grant him a waiver

        • jdminhbg 1452 days ago
          “Probably” not illegal is a hell of a risk to take. All it takes is one prosecutor who thinks he can make his career over crushing pandemic profiteering and you’re screwed. It doesn’t even matter if you somehow win in the end.
        • austhrow743 1452 days ago
          The government can also place a long term order but they haven't done that either.
      • mixmastamyk 1452 days ago
        And there was no room to raise them in quiet times either because they were already more expensive than imports.
    • tantalor 1452 days ago
      > He had to pay unemployment for all these people, and he had to gear down

      Whining about a non-issue. Of course market conditions will change when the time-sensitive crisis is over. Unemployment is "paid" for the period of employment, not when they are laid off. If you don't like laying people off then contract them month-by-month.

  • Aloha 1452 days ago
    I cannot blame him one bit, and as a small business, he cant absorb the losses from having to scale back either.

    I sincerely hope the lasting change from this crisis is a changing attitude towards where we build things.

  • blunte 1452 days ago
    Buying American doesn't increase shareholder value or executive bonuses. Reducing costs does. At least, that's the mantra

    Walmart became the giant it is because while people agree that supporting local businesses is important (especially when they and their neighbors own those businesses), they still could not help themselves and chose to do their shopping at Walmart because it was cheaper. Then many of the small local businesses died.

    Modern (American/western/and-possibly-everywhere-else) people are really terrible at balancing short vs long term priorities.

    • nojvek 1451 days ago
      When you're living paycheck to paycheck, every dollar matters.

      The problem is things are cheaper from china, because China as a nation invested in their ecosystem of manufacturing. Ports, roads, tax incentives, loans e.t.c

      US on the other hand did not invest in themselves as heavily. It's like a rich son having someone else do his assignments and when the end of year exam comes, he's fucked because he didn't put the effort in learning himself.

      The more we take China take the lead and we rely on them, the more we lag behind.

  • solidsnack9000 1452 days ago
    For clothing, the Berry Amendment ensures that the US has strategic capacity, by mandating that certain government purchases are made from suppliers that assemble US fabric with US labor. Maybe there needs to be a similar policy for medical equipment.
    • ardy42 1452 days ago
      > For clothing, the Berry Amendment ensures that the US has strategic capacity, by mandating that certain government purchases are made from suppliers that assemble US fabric with US labor.

      Honestly, US government policy should be to buy everything that could be remotely considered strategic or useful in an emergency from US suppliers that use US labor and materials. Small exceptions could be made for proprietary things made by NATO allies, but even that stuff should really have a second source supplier located in the US.

  • travisporter 1452 days ago
    >> “Create American jobs. Buy American. … It’s hot air.”

    This quote really got me. Being in Texas you would think people value American made.

    • netsharc 1452 days ago
      It's fascinating to read this article after reading the tweets asking "why are we depending on foreign manufacturers for protective gear?!?". Well, the answer was in here, because everyone wants to buy from the cheapest supplier...
      • adjkant 1452 days ago
        It's almost like capitalism is inherently exploitative and if you are buying American you are no longer gaining wealth for the country by exploiting those outside of it, and then have to choose to either exploit American workers or sacrifice profit!

        Not aimed at you, just generally this should not come as a surprise that capitalism is generally pretty hard to make work with "Buy American" sentiments in my book.

  • ck2 1452 days ago
    The photos on ebay and amazon of the Chinese factories making surgical masks (not N95) appear to be 99% automated.

    The machines in that article appear rather different.

    But it's not just hospitals, all of US is built on "just in time" fulfillment for decades now. That's why a government stockpile was important for emergencies, it's not unrealistic to expect government to have that role. You just can't have people in charge of government that spend all their time dismantling it and expect it not to fail.

  • sumo89 1452 days ago
    That is an awful website for people in the EU. 4 different pop ups then 20 seconds after page load a final one saying you can't read the page outside the USA.
    • moritonal 1452 days ago
      I found a bookmark a while ago that attempts to make sites like this readable. Not good at all, but almost works.

      "javascript:(function() { document.querySelectorAll('*').forEach(function(n) { var p = getComputedStyle(n).getPropertyValue('position'); if (p === 'fixed' || p === 'sticky') { n.style.cssText += ' ; position: absolute !important;'; } }); })();"

    • aembleton 1452 days ago
      Just switch off JS for the site and it works perfectly well.
    • mkl 1452 days ago
      I'm outside the USA, and read it fine. I'm guessing uBlock Origin just hid all that from me entirely.
    • aivisol 1452 days ago
      Reader view in FF did the trick (in EU)
  • jeffdavis 1452 days ago
    There's no way to win selling cheap but critical supplies on the spot market. If the price goes down your customers flee. If the price goes up you can't charge the higher price because that would be "gouging".

    So his solution is contracts. The fact that people aren't signing them shows their true intentions.

    What I can't quite figure out is why, during the good times, a $0.10 consumable for a $4000 operation needs to be made more efficient so badly that the only way to produce the thing is in a communist country with no environmental controls.

    • PhantomGremlin 1452 days ago
      What I can't quite figure out ...

      That's simple to figure out, and it is not specific to hospitals. Some purchasing manager says "hmmm ... I'm paying $100,000 per year for this product. But I can buy it overseas for only $20,000". Score!

      At the end of the year, that purchasing manager writes a report to his manager saying something like "saved the hospital $10,000,000 by optimizing our supply chain". Or some such.

      How much some random operation costs doesn't factor into his decisions at all. That's not what he's being compensated for.

      The only way this mindset changes is if top management insists on it. But usually top management is constantly pushing to cut costs. Their bonuses depend on it.

      • xemdetia 1451 days ago
        Yeah, this is the kind of way I considered this article. There's so many operations including medical hospitals purchasers that are trying to follow the current mantra of as little idle inventory and wastage of inventory on the shelf as possible for as cheap as possible. This makes sense for people purchasing finished goods but doesn't make as much sense for people making finished goods who may need primary material goods in quantities and timings that do not scale well in increments. It also makes no sense from a machining and tooling efficiency investment to replace a particular operation with a machine to do it 100x as fast if making 100x of the particular sub-assembly completely overwhelms the maximum capacity of the next step unless it is also improved.

        There's just a minimum volume cost to most finished goods below which it just costs money to do the work at all. Sure if the volumes go way up there's economy of scale at work and the fixed costs of scaling up go down so prices can be reduced in a way that doesn't affect the manufacturing business to be more competitive but there's a bottom in the other direction.

        You can insulate that with long term contracts from the buyers so that you can get favorable contracts with the suppliers, but when you have purchasers going quarter to quarter and saying lowest price = best value you just are playing a totally different game for a smaller manufacturer. The current model of a small American manufacturing business seems to currently reward doing the same boring product at the same boring volume so that the company will exist in 20 or 30 years by investing in specialist equipment that does one or more steps of manufacturing better than generalist equipment and creating a niche stable market for yourself as the depreciation/fixed cost of that specialist equipment per total units made approaches next to nothing.

  • alphabettsy 1452 days ago
    Many voters want the government run like a business, and this is a good example of why you don’t run the government like a business.
  • yellowapple 1452 days ago
    > “Last time he geared up and went three shifts a day working his tail off,” the mayor recalled. “As soon as the issue died, he didn’t have any sales. He had to pay unemployment for all these people, and he had to gear down.”

    This would be a good time to hire temp labor through a staffing agency; you pay a bit of a premium for that, but you also don't put the employees directly on your payroll that way (they're employees of the staffing agency instead, so said agency is then responsible for finding new work). People need the jobs, America needs masks, this guy wants to make and sell masks, win-win-win.

    Like, I didn't really see a compelling reason in the article why that factory isn't working 24/7. I know of plenty of companies that deal in similarly-high-demand-in-pandemics products (my employer included) that are ramping up and running 24/7 and doing everything they can to get those products to people who need them. Most of them are doing that by hiring temps.

  • JoeAltmaier 1452 days ago
    Not sure writing the feds is a way to change the free market system. Not for one guy; not on a dime.

    Perhaps a measure allowing emergency part-time workers? Why does he have to be 'fooled again', why not just increase production temporarily?

    It sounds to me, this guy is being spiteful. Wants to make a point. Maybe not the right climate to make his point in.

    • zelienople 1451 days ago
      If you can't make the point now, when can you make it? Once the pandemic is under control, no one will care.

      The bottom line would appear to be that capitalism is, by far, the best system we have, but only when it operates inside a walled garden.

      We should impose tariffs on essential items so as to allow local employees to be paid a fair and living wage, put restrictions on the multiple between the lowest wage in a company and the highest, limit growth to preserve the competitiveness of markets, and ensure that the true cost of production, including the environmental damage associated with production, distribution, and disposal is accounted for locally.

      Imagine if this small business was allowed to charge a fair price for their product without competition from a totalitarian state that has bred 1.6 billion slave workers to exploit the planet and conduct a covert economic war to undermine democratic free-market countries.

      Imagine if the earnings of every CEO were capped at 3x the lowest wage on the factory floor. Imagine people having stable jobs that fulfill a genuine need while producing something in a sustainable and environmentally-responsible fashion. Imagine that those hard workers get health care and generous vacations and a living wage.

      Is it so ridiculous to dream of limited capitalism? Sane capitalism?

  • xivzgrev 1452 days ago
    Smart to have hospitals sign longer term contracts for supply now. Sounds like he learned his lesson last time.

    Also this guy sounds kind of butt hurt about buy American rheteroic. I agree but if you are charging 5x on a commodity vs china, I mean rah rah America only goes so far.

  • titanomachy 1452 days ago
    Seems like a good opportunity to sign 5-year supply contracts with healthcare organizations.
    • jdbernard 1452 days ago
      The article doesn't give details but it sounds like that's what he tried last time and is what he trying again:

      Hospitals promised to stick with him afterward, but they broke their promise.

      And later

      Now, it’s only selling to U.S. hospitals. But Bowen asks hospitals to sign contracts. Who can blame him?

      Or as the mayor puts it, “He’ll gear back up, and he’ll produce, and they’ll probably do it to him again.”

      I imagine as a small business he may not have pockets deep enough to pursue legal action against hospitals that are breaking contacts.

  • jupp0r 1452 days ago
    How long does it take to build a mask factory? Maybe we should stockpile machines that can rapidly ramp up production of millions of face masks per day in preparation for the next pandemic.
    • jaclaz 1451 days ago
      > Maybe we should stockpile machines that can rapidly ramp up production of millions of face masks per day in preparation for the next pandemic.

      Unfortunately that is not how machinery works, you would need personnel to maintain them, and also switch them on periodically, and repair them otherwise your stockpile of machines won't work anymore in - say - three to five years of stockage.

      And BTW you would also need to have a huge stockage of spare parts, as in the same three to five years the current model (the machines that actually running in production) will be release/model Mark V, and they have different parts from the Mark I you have stocked ...

  • Pmop 1452 days ago
    This is interesting. Being a Brazilian, our government has been always protectionist. Even in the current New Republic period. "Industries vital to our country must be protected". And oddly enough, that idea was shared by many politicians, even when they were opposed to each other.

    The govt has been harshly criticized by the recent, new libertarians, for the import taxes increased prices to the end consumer and scared away foreign investors. Turns out that we had national mask makers ready to step up. Plus, textile and other industries decided to also jump in to help. I bought three masks before taking a flight recently, I didn't have any trouble finding them, paid less than a dollar for a locally made N95 equivalent; it seems that many of my flight mates had the same idea. I guess our old politicians nailed it, at least this time.

  • supernova87a 1452 days ago
    1. Domestic production 2. Low prices 3. Surge capacity meeting sudden demand

    You get to choose 2 of the 3. This guy wants protectionist policies to help him stay in a more sustainable business. You can't fault him for wanting to serve his own interests. But we could've prepared for this by having the proper stockpile in anticipation of an emergency.

  • nojvek 1451 days ago
    It seems US is very much going for short term gratification instead of long term building of industrial nation. Moving manufacturing offshore into China and other cheaper countries + mega multinational corporations starving small businesses or buying them up so they can get away with price gorging and lobbying for favorable laws.

    China said no to Google and Facebook, they let Baidu and Tencent build the technological prowess. China manufactures most of the worlds electronics, they help their cities foster ecologies. e.g Shenzen, Guangzhou, Tianjin e.t.c

    Meanwhile US has been losing its manufacturing edge over time. We can't be price competitive to China because we haven't invested in the ecosystem necessary for mass scale production. Our governmental leaders have frequent conflict of interests because they've worked at previous mega corps.

    US can no longer think and take actions for the interest for the whole nation. Corporate interests are winning out. Seeing how the $2 trillion stimulus was a giant coop, to Jared Kushner (neopotism) saying "National Stockpile is for us, and not for the states." COVID-19 is exposing how incapable we are as a nation to be self sufficient.

    Is US a democracy? I am not so sure. Without fair competition, we aren't a capitalist society either.

  • jariel 1452 days ago
    There is a serious problem with understanding surpluses here.

    Do you really care if your monthly water bill is $1 or $5?

    Think - if you're at $5 a month, I mean you could save 500% (!!) by going to another provider at $1!

    No - you don't care at all. At such a low price and vast surplus (the difference between what you pay, and what it's worth to you) - other considerations are paramount.

    The difference between 10 cents and 2 cents is stupid. They could be 50 cents and it would not be 'price gouging' because there's tons of surplus to go around.

    If we're going to talk about 'gouging' we need to talk about the entire medical system - it's just one big massive gouge.

    There basically needs to be a strategy of price regulation and sourcing, as simple as that.

    A simple rule like 'must be bought and fully sourced in the US' is easy, because it still implies a lot of competition.

    For some products there could be a strategic reserve, and also a strategic production capacity.

    Same for the entire military supply chain.

    It's time to re-think globalism.

  • hkai 1452 days ago
    Here in Hong Kong, folks have set up six mask production lines already, working round the clock to produce surgical masks. Don't know how they managed to get the equipment but kudos to them.

    That's because people don't hate businesses and businesspeople, and are thankful for their effort.

    Low-quality surgical masks here retail for 40-50 USD per box (50pcs), and there are no plans to introduce any price controls. That means that resourceful people are stimulated to abandon their family and regular jobs, and work round the clock to set up production lines, because they want to earn money.

    I assume in America the sentiment towards businesspeople and pricing is somewhat different.

    • mkl 1452 days ago
      > Low-quality surgical masks here retail for 40-50 USD per box (50pcs)

      That seems weird. They're half that on AliExpress, including shipping to NZ.

  • noirchen 1452 days ago
    I was in China in 2003 during SARS outbreak, and at that time the Chinese doctors and nurses had no N95s or KN95s. They used thick cloth masks. To get better protection, the masks were boiled in highly salty water and dried. I think this may be useful if you have to wear some homemade masks.
  • tomohawk 1452 days ago
    “If y’all don’t care about me in good times when everybody’s OK, how am I going to be there when you need me?”

    Hopefully this will change. We need companies like this, and we don't need to be supporting the CCP's human rights violations.

    • wccrawford 1452 days ago
      It won't change. People will always act in their own interest. They're not going to pay 5x the price for masks (2c from China, 10c from this guy) if they don't have to. Who knows when this will happen again? They might pay those higher prices for 10 years (which is apparently how long it's been since last time he had to ramp up production) before it makes any difference.

      They likely also won't stock up on masks for financial reasons, too. It costs money to have storage space for them.

      • toss1 1452 days ago
        ... and THIS is exactly why we need a functioning government

        and why government is NOT like a business

        In business, the main concern is optimizing product and cost. Extra inventory and capacity is considered wasteful, not adding shareholder value this quarter or this year.

        the govt's job is to build the infrastructure (physical, legal, technological, etc.) and ensure preparedness. Calculate the greatest plausible need, and ensure that the resources are there to meet it. That is why we pay for firehouse & firemen to, we hope, hardly ever work, pay for soldiers to, we hope, mostly shoot at targets, etc.

        This is why we should not be outsourcing entire supply chains, even if it is most profitable. Some second sourcing, sure, but critical manufacturing capability and intellectual property capability offshoring is just foolish.

        • akvadrako 1452 days ago
          This is actually an example of how the government should be run like a business. Paying 10x the amount for masks to ensure they are available when needed would have saved money in the long run.
          • toss1 1452 days ago
            In theory, yes.

            But I have almost never seen a business ACTUALLY do that, and have watched decades of management consultants actively advising AGAINST that type of management.

            Aside from the general issue of offshoring the production capacity and know-how (as if it were somehow fungible & low value), the JIT (Just In Time) inventory movement has also taken over the entire industry. So, instead of maintaining stockpiles of input materials with associated costs of storage space and idle capital, they spend costs to manage networks to try to ensure that it arrives "Just In Time". Great while it works, and if done properly, it can be robust to handle single supplier disasters. But, the more rare broad events like this kill everything.

            The MBAs might even argue that paying 10x to ensure availability isn't even economical, as the events requiring you to pay 100x don't add up to the total 10x cost.

            But the real issue is that no business is managed to handle the tail risk (the rare, low-likelihood events with disastrous consequenses).

            Any business that does manage for tail risk -especially at the level that a govt should manage for tail risk- will be outperformed by any biz that manages for normal circumstances. They will likely fail.

            Consider trying to setup a for-profit local fire department. You are paying $$millions for equipment and must pay skilled workers to sit around and polish the equipment almost every day. The customers and other regulators are actively working to ensure that you are never needed. When a fire does happen, and you show up and demand payment or ccard (assuming the homeowner is even present and not inside the fire), most of the time they can't pay, so you have no sale. Your fire department would go bankrupt quickly.

            The only solution would be for everyone in the coverage area to pay into a fund supporting your company, and get service whenever they need it. You'd need to make sure that EVERYONE paid in and there were no freeloaders. Congratulations - you've just invented government, not a business.

            • akvadrako 1451 days ago
              > But the real issue is that no business is managed to handle the tail risk (the rare, low-likelihood events with disastrous consequenses).

              There is an entire industry devoted to this. It's what made Warren Buffet rich.

              • toss1 1451 days ago
                Yes, that's called insurance, and it is about ordinary risks not tail risks, and about only the financial component, not the real-world component.

                Having fire insurance is NOT the same as installing detection and response systems and having a prepared and active fire department.

                Getting an insurance payout for your dead children is not the same as having the fireman with his ladder and gear go into the building and rescue them.

                Insurance manages only PART of the financial component of risk.

                Read an insurance policy and you will find dozens of pages AVOIDING the real tail risks - the rare events with massive potential losses.

                If you really want to insure against tail risk, you need to go, not to the overall insurance industry but a small subset of specialty insurers, such as Lloyd's of London (which actually isn't even actually an insurance company).

                Even with those specialty insurance-type products, no amount of insurance can protect you from the practical consequences of not being prepared for tail risk.

                As in the firemen example above, you might be able to get a massive payout for your inability to buy masks this week, but no payout will guarantee that you can actually get the items you need if they don't exist.

                In contrast, a properly prepared govt would spend the funds to have them on hand, just as we have on hand an inventory of fire trucks, water pipes and hydrants, etc.

                So, no, insurance not an example where a business runs like a govt. should

                The goals of a business vs a competent govt are fundamentally different. Business is run for current profit, govt is all about building infrastructure, both physical & institutional and preparing for (not insuring against) massive tail risk.

      • benjohnson 1452 days ago
        >>It costs money to have storage space for them.

        $40 per employee.

        My five-man IT company have enough PPE to keep going for 120 days. It cost us $200 a year to maintain it - or $40 per employee.

        We have N95, face-shields, and Tyvek bunny suits. We even have N100 half-face respirators for a really serious pathogen.

        EDIT: It does cost for storage. At $25 per sq-ft for real estate, it add $50 to the cost. So a total of $50 per employee.

        (We have prudently given a lot to the local hospital as we've been working primarily from home. We've also been 3D printing face-shields.)

        • greedo 1452 days ago
          Not judging, but why does a five-man IT company require PPE? I've been involved with DR/BCP for 20 years and this has never come across my radar.
          • dylz 1452 days ago
            California OSHA has made it a legal requirement for companies to have N95 masks for employees in the past.
            • greedo 1451 days ago
              Thanks! I haven't worked in CA for over 2 decades, and in the Midwest this requirement would be viewed with a jaundiced eye.
              • dylz 1451 days ago
                A lot of people were asking WTF about Facebook, Apple, etc having tons of masks - CA pretty much had temporary mandatory "you must have enough for all of your workers" declarations during wildfires.
          • benjohnson 1451 days ago
            Great question! Day to day it's quite useful -

            I don't want to send my guys into a sketchy attic that may have glass fibers, rat turds, black mold, and asbestos to check on a network cable and I don't want them to lose and eyeball when using a power drill. We also spend a fair amount of money on ladder safety - looking at the OSHA data, that a great way to maim yourself.

            • greedo 1448 days ago
              Ladders are bad; climbing on roofs is bad. I'm sure that when I depart this mortal coil, it'll be because I was on my roof, supported by a crappy ladder.
  • madaxe_again 1452 days ago
    Article isn’t available outside of the US. I assume it’s about how everything is the greatest, and they’re working 30/8, not 24/7?
  • 54351623 1452 days ago
    Why can't N95 mask production be completely automated so production can quickly scale with demand while also keeping costs down?
    • mardifoufs 1452 days ago
      N95 masks use a special plastic fabric that can only be produced with really specialized machines. That's usually the bottleneck since it takes months to make and install the required equipment. Also, keep in mind that the production process is already highly automated anyways.
      • 54351623 1452 days ago
        That level of automation is what I was wondering about, how much it would take to remove humans entirely. Admittedly I was working under the assumption that the producer of the masks wasn't also manufacturing raw materials as that wasn't addressed in the article and may be a separate issue in and of itself.
    • 9HZZRfNlpR 1452 days ago
      Scaling up means a lot investment but what happens when the demand goes down? You're left with debt from it and little demand. The scaling as such is not the problem here.
      • 54351623 1452 days ago
        Scaling as in just let the machines run longer, normal hours to 24/7 or whatever is necessary, there's more room for a nuanced production if less people are involved right? For clarification I didn't mean scaling as in buying more machines, which I agree would likely require prohibitive investment.

        Of course keeping a few machines in the wings is probably cheaper than overtime and unemployment.

        [edit] I'd also like to know how difficult it would be to just switch the machine over to making cheaper, non-medical grade masks as demand changes?

        • 9HZZRfNlpR 1452 days ago
          It doesn't work with specialized machinery like it does with servers aka "cloud". Machines that are reliable 24/7 workhorses cost money, when the demand is down you cannot share them over the internet so others can do something useful with them.

          I suppose it's more realistic with cnc or 3d printing but even then it's not that simple mission, this small company wouldn't most likely try or want to be "aws but for x robots" : )

          I suppose if you think about 3d printers, plastic molding, cnc, then we are slowly going to this direction.

          • 54351623 1452 days ago
            I didn't mean renting them out but rather switch to masks that I assume have a higher demand with lower production standards.

            I'd be willing to bet that you are right though and that the machines currently being used wouldn't be capable of producing much besides masks.

    • dboreham 1452 days ago
      This can't be done with any manufactured item so why would it be doable with masks?
  • danvoell 1452 days ago
    Something about this story doesn’t add up. If this were 99% of the manufacturers I know, they would be operating 24/7 right now. Call every available temp agency and load that place up. The only fathomable excuse is if they can’t get enough material. The guy running this company sounds like a politician not a businessman. Edit: not sure why I’m getting downvoted. I’m serious. If this company were near me I would be asking if I could run second shift. In theory this guy is both leaving hundreds of thousands of dollars on the table per day and contributing to our country’s deficiency of equipment while trying to argue for some sort of long term agreement because he has leverage at the moment.
    • beerandt 1452 days ago
      Read the story. It's what he did in 2009 and got burned by it. Almost bankrupted him. He's learned his lesson.
      • hilbertseries 1452 days ago
        The situation in 2009 is so far from this, that it’s not even comparable. Face masks are going to be in high demand for the next year or so, probably beyond that because a rollout of the vaccine is going to be slow.
        • Zenbit_UX 1452 days ago
          I'm sure he's aware, what you're overlooking is that when China starts producing again he's instantly undercut by a 5x margin and history has shown him no one in the US cares about buying American if it means paying more, then he lays off all the workers again and goes out of business.
      • wonnage 1452 days ago
        So basically he's a businessman who couldn't figure out how to meet a sudden demand for his product, and his solution is to just ignore it this time.
        • Zenbit_UX 1452 days ago
          He's a businessman that learnt his lesson and he's more cautious this time. The article did say he's hiring and trying to scale up but at a sustainable pace.
    • raincom 1452 days ago
      Why should the company take risk to order new machines, hire employees and train them, only a few months later to reduce the manufacturing capacity? Why should he take risk? If people want it that bad, give that company 10 year contract. I support that company's decision to not take risk, as he was burned before.
      • danvoell 1452 days ago
        I can understand the machine part, I also wouldn’t order machines or hire long term employees and would only take steps that help my immediate situation. I would hire temp workers and at a minimum be working 7 days a week. Add a pre-order field on your website.
  • thawaway1837 1452 days ago
    I don’t really get this article.

    If you have the foresight, and money, to pay to transplant an entire industry from a place which manufacture masks for 2 cents as opposed to one that does it for 10 cents, wouldn’t it be a lot easier, cost efficient, and sensible, to simply by 2 masks whenever you need one for a total of 4 cents for the 2 masks, and keep 1 of those 2 masks in your stockpile?

    You end up spending about 4cents per mask, and you’ve built up a massive stockpile in addition to that for emergency situations. And you’ve only paid 20% of the money you would have for the masks the article is advocating.

    Frankly, this was a disaster in federal planning. Trying to twist this into some sort of issue with the supply chain system is kind of ridiculous.

    Also, if you actually look at the US right now, the idea that American companies would be manufacturing anything full throttle is beyond ridiculous. China in fact manaaged to completely lockdown Hubei province in a way the US can never dream of, which allowed them to continue their industrial manufacturing, and actually be able to supply masks to states and hospitals around the country (of course, life would be a lot easier if the federal government coordinated the procurement so states weren’t outbidding each other only to have the Federal government pirate their supplies to ha d off to private entities that then resell it to the same states for even more...).

  • wonnage 1452 days ago
    Another way to frame the situation: America is in dire need of surgical masks, and its top manufacturer is more interested in martyring themselves than to help out.

    It seems like this is what the Defense Production Act is for? It's not like GM, where invoking the act doesn't seem to speed anything along because they don't make ventilators normally, and have to spend several days retooling their factories. In this case, you have a manufacturer that has excess capacity and is simply refusing to use it.

    Also, how is this supposed to make people trust American manufacturers any more than the Chinese? The Chinese are actually _making_ masks at full capacity and exporting them... meanwhile, our own homegrown industries are busy navel-gazing and feeling bitter about some past slights.

    • smabie 1452 days ago
      Probably because China doesn't have (or maybe enforce?) "price-gouging" laws. This 100% wouldn't be happening if we just let people charge what they want for their own property.
      • wonnage 1452 days ago
        How does this make any sense? China is not price gouging on PPE, at least not to the point where this guy's factory pricing is competitive
        • smabie 1452 days ago
          We don't know how much money it takes for a Chinese factory to produce these masks. Even though they're cheaper, the prices they charge could very well be considered price-gouging under some State laws. The absolute price of an item doesn't really matter.
  • lazyjones 1452 days ago
    Sad story, but if he had kept the employees and built a stockpile at a loss, he'd quickly recover those past losses and score a huge profit now. So: believe in your product and mission, pandemics do happen.

    A solution for the future would be be high import taxes for products of "national interest".

    • neltnerb 1452 days ago
      If your creditors and landlord don't believe in your product and mission, I'm not sure how that's actionable. Small businesses aren't in a position to make big financial bets.

      If Goldman-Sachs wanted to stockpile masks made at 10 cents each and take on the risk of never being able to sell them, great. I cannot fathom how someone running a non-diversified business could possibly make such a choice.

      • lazyjones 1452 days ago
        > If your creditors and landlord don't believe in your product and mission, I'm not sure how that's actionable

        They own their plant, as 30 seconds of research show. https://www.prestigeameritech.com/press-releases

        They've been in the business long enough and through at least one pandemic before (see below) to make this something other than a "belief" issue. Even small companies can build reserves if their business model works.

    • mhb 1452 days ago
      That's exactly the behavior that anti-"price-gouging" laws disincentivize.
    • raincom 1452 days ago
      Of course, you suggest the company to gamble. Borrow money, build a stockpile at a loss, and wait for a pandemic. What if the pandemic doesn't strike, before they file for a bankruptcy?
      • lazyjones 1452 days ago
        Since they've already been through a pandemic once before, it's not much of a gamble. Building reserves isn't risky:

          Prestige Ameritech's sales have doubled in recent weeks, 
          forcing the company to maintain a seven-days-a-week 
          production schedule to keep up with demand. 
        
        http://content.time.com/time/health/article/0,8599,1899526,0... (2009)
        • Zenbit_UX 1452 days ago
          By your logic most people over 17 have been through a pandemic before, did you learn your lesson? Do you have a stockpile of n95 masks?

          Even if he could predicted have it, he still couldn't sell them for more than $.10ea due to price gouging, so your whole point is moot. There's no insentive for him to take the risks you're suggesting.