The Quiet Monopolies Driving Up Healthcare Costs

Every healthcare service line is dominated by a small number of technology suppliers. In orthopedics, it is Stryker, J&J’s DePuy Synthes, Zimmer Biomet, Medtronic, and Smith+Nephew. In cardiology, it is J&J Medtech, Abbott, Boston Scientific, Medtronic, Siemens, and GE. 

Technologies from these providers are trusted, advanced, and under constant improvement. This means that healthcare providers can rely on devices from these companies to be top-of-the-line, strong on clinical results and patient safety, and steadily evolving. A half dozen suppliers in the same market ensures competition and constant pressure to innovate, and these companies respond to this call with annual or semi-annual generations of new products. On the surface, there is a constant race to launch the better technology, which benefits the provider and the patient.

In reality, though, these markets are not highly competitive environments that reliably drive down price, foster innovation, and reward choice. Through a variety of entrenched practices, many technology providers effectively lock clinicians and health systems into repeating the same patterns of technology consumption across decades and device iterations. The orthopedic doctor is introduced to a brand during residency, develops a personal relationship with the sales representative, grows comfortable with the technology, and then sticks with that brand until retirement. Brand loyalty becomes a crutch — a means of reducing uncertainty and ensuring consistent performance. Despite the number of suppliers in these spaces, switching brands is rare. Preference becomes reliance, and choice is replaced with continuity.

This relationship between technology brands and clinical practitioners is, in practice, monopolistic. Even if alternatives exist, they are often not considered. As a potential patient, I might find comfort in the idea that my care is delivered with devices my doctor knows inside and out. However, there is a hidden cost to these healthcare technology monopolies. And, in a few instances, medtech providers have been called out for their monopolistic behavior. In one instance, a recent lawsuit verdict ruled that a medtech manufacturer could not restrict its customers from using third-party reprocessed devices that can yield significant cost savings for hospitals. 

These types of monopolistic practices often fly under the radar, but they take a steep toll in many areas of healthcare. Here are four types of hidden costs we need to consider. 

Price

When doctors are deeply engaged with a preferred technology provider, they often adopt new generations of devices without asking hard questions. Each year, a company may launch products with appealing functional improvements, and the physician is impressed. But the more important questions are often asked less frequently: Does this improve patient outcomes? Does this increase patient safety?

Because new medical technologies almost always enter the market at higher prices, the cost of care increases annually. Hospitals operate under fixed budgets, so if a new version of a frequently used device costs $500 more than the last generation, that money must be found elsewhere, potentially impacting other aspects of patient care.

A recent example comes from electrophysiology, where new imaging devices offered higher resolution but showed no measurably better clinical outcomes. The same dynamic appears in the marketing of pulsed field ablation (PFA) technology. Functional improvements are valuable, but pricing increases without corresponding clinical benefit strain health system budgets.

Choice

A wide range of commercial practices across medtech limit true physician choice, even without explicit antitrust violations. One increasingly common tactic is kit-based marketing — bundling multiple components so they cannot be purchased individually. In electrophysiology, for example, transseptal “kits” may include an introducer sheath, wire, and cable. Physicians cannot buy only the wire. This locks clinicians into a single brand, restricts their ability to mix components based on preference, and creates expensive inefficiencies if a single part fails during a procedure.

Bundling is widely recognized as an anticompetitive tactic. While regulations exist, medtech companies tend to employ creative workarounds, and the bundling practice remains quite common.

Clinical practice

The relationship a physician forms with technology during training invariably shapes their clinical approach. While physicians are deeply scientific in their thinking, medtech marketing and education practices can condition clinicians to allow technology availability — not clinical need — to drive decision-making.

One notable example is the adoption of 3D intracardiac echocardiography (ICE) in electrophysiology. The transition from 2D to 3D imaging was driven largely by the launch of 3D-capable systems rather than a demonstrated clinical need for enhanced visualization at the time. It mirrors consumer behavior with smartphones: buying the next generation not because the prior model lacked something essential, but because it is simply “the next one.”

Innovation

Large medtech manufacturers excel at manufacturing, distributing, and selling devices. They are less adept at developing radical innovations that truly change clinical practice or meaningfully improve outcomes. Historically, breakthrough technologies come from smaller companies unconstrained by existing product lines or entrenched clinical paradigms — the “skunk works” of the industry.

Yet market entry for these innovators is extremely difficult. Dominant medtech companies have well-established relationships with physicians and hospital value analysis committees. Startups often lack the salesforce, capital, and market access to compete, even when their technologies offer transformative potential. Real innovation typically reaches clinicians only after a startup is acquired by a major manufacturer — a process that slows adoption and increases cost.

The monopolistic nature of medtech markets carries deep, yet rarely discussed consequences for clinical practice, pricing, innovation, and patient care. Greater scrutiny of these dynamics — through research, policy evaluation, and industry self-reflection — would support a more competitive, innovative, and patient-centered medtech ecosystem.

Photo: Hollygraphic, Getty Images

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