Rent, Don’t Buy, Your Insulin Pump?

Here’s a novel — and utterly pragmatic American — idea:  What if you could rent your insulin pump instead of buying it?  So all you’d need to buy was the disposable supplies, and you’d be ready toD_tron_pump trade up to new models in a minute?

David Kliff of Diabetic Investor explores the concept in his latest (subscription) newsletter, which I’ve been poring over with great interest.

Under this new pricing model, the patient would pay an annual lease payment to cover the pump’s manufacturing costs, and would continue to purchase pump disposables.  It’s basically like leasing a car, Kliff explains.  “Why spend $40,000 or more when for a few hundred dollars a month a consumer has almost all the same benefits as someone who purchases the car outright?  At the end of the lease, the consumer simply returns the car and the process begins all over.”

The idea seems to be exclusively Kliff’s at this point.  So what would happen to the insulin pump market if just one of the conventional pump companies decided to take the leap?

Currently the hottest growth companies are Medtronic and Insulet, makers of the new tubeless OmniPod System – but a leasing model could level the playing field again, according to Kliff.  For example, Insulet currently has an advantage in the low upfront cost of its pumping unit ($800), but the annual supply costs are quite high (nearly $4,000 for a year’s worth of Pods), Kliff reports. 

A leasing structure could be better for everyone, Kliff argues:

Patients could eliminate buyer’s remorse, and would have the opportunity to consistently upgrade to new and improved pumping technology.

Manufacturers would avert price wars, which may soon otherwise force a number of players out of the market altogether (leaving patients with fewer choices).

Third-party payers (Medicare, HMOs, and other organizations footing the bill for medical services) would no longer have to cough up thousands of dollars each time a patient starts pump therapy, or replaces an out-of-warranty pump.

Sounds pretty win-win-win, anyway.

OK, calling all Pumpers and Potential Pumpers out there: Let us know what YOU think.   

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10 Responses

  1. Bernard Farrell
    Bernard Farrell September 27, 2006 at 6:47 am | | Reply

    I really like this idea. I can see where it might encourage innovation because new models with patient focused features would be more readily available. If health insurance companies picked up some (not even all) of the ‘lease’ costs then it could be a really sweet deal. No more waiting four years to use the latest model!

    And would this open up a market in reconditioned insulin pumps? Perhaps this would enable those with less-than-perfect health care coverage to get into the game.

  2. Johnboy
    Johnboy September 27, 2006 at 10:45 am | | Reply

    It’s an interesting idea to be sure.

    For me, it would come down to whether renters would incur much of an out-of-pocket premium to rent vs. own, and whether there would be a big paperwork hassle factor in switching models.

    All else being equal, I’m not sure why it would make sense to own.

  3. Megan
    Megan September 27, 2006 at 11:27 am | | Reply

    I really like the idea as well!

    I think this would be great for people who only want to use pumps while pregnant (gestational or otherwise).

    I also would love to be able to get the next model sooner.

    And I could totally health insurance companies being game for this (if not, it wouldn’t work for me, since my insurance covers pumping now).

    I also think it would help people who don’t have insurance be able to pump with the limited upfront cost. People who are apprehensive of pumping may be more willing to try it too.

    With software that lets you store settings, using a pump for only a short time isn’t a problem there.

    One problem I foresee is insurance forcing people to “rent” a pump when the person wants to buy it. Then you have to convince your insurance every year to let you rent again, rather than every 4 years.

  4. Felix Kasza
    Felix Kasza September 27, 2006 at 12:08 pm | | Reply

    Does Kliff have a calculator? The reason why companies lease stuff is usually related to either taxes or labour cost (like maintenance).

    The reason why individuals generally do not lease cars is that they do not wish to pay the premium associated with this convenience.

    Oh, and insurance companies might like the idea — if they buy me a pump, and I switch insurers, they have just made a present to the new insurer. On the other hand, it all evens out in the long run.

    With all that in mind: What makes Kliff think that renting or leasing a pump from a company that has to buy it (even notionally, if it is the mfg) is cheaper than buying it outright?

    Cheers,
    Felix.

  5. Megan
    Megan September 27, 2006 at 7:57 pm | | Reply

    One other problem I foresee is that pump companies spend a lot of money on education, and talking to your doctor/insurance to get coverage cause they want the big sale. I don’t see that happening if it’s not a big sale.

  6. Tania
    Tania September 28, 2006 at 8:55 am | | Reply

    The “utterly pragmatic American” idea has been reality in Switzerland since the introduction of the first insulin pumps.
    Health insurance companies actually do not mind paying the premium, because they are absolutely sure that a) all technical problems within the 4-year lease period go to the expense of the manufacturing company and no “substitute” pump has to be paid for (they have contracts with the manufacturers to insure that), b) the patients have a technically up-to-date pump at all times, helping to prevent health damages that could incur when a pump isn’t serviced regularly.

  7. Dorothy Baron
    Dorothy Baron September 28, 2006 at 11:11 am | | Reply

    I just got a pump in June. It has been a wonderful experience. I had a full day training to start using the pump and then an assigned trainer for two months to adjust basal and bolus rates.
    I doubt I would have had all that support with a lease.

  8. RDoctor Medical
    RDoctor Medical October 2, 2006 at 5:34 am | | Reply

    Grand Rounds on October 3

    This page will host Grand Rounds on October 3
    To the contributors of this weeks GR
    Hope to finalize soon.  Can you folks point out any corrections?
    2006/10              Grand rounds volume 3 number 2.
    Welcome to the Grand Rounds. O…

  9. Rosalind Joffe
    Rosalind Joffe April 19, 2007 at 7:33 am | | Reply

    Amy, it’s my experience that there is at least one difference between those who live with chronic illness from childhood and those who develop it later on – career path. When you know this is a factor, you’re more likely to think about a job or career that fits what you can do. Trying to “retro fit” yourself can be much more difficult.

    And, I know the constant reminder of disease… I live with an ileostomy appliance (colon out/bag in) that’s ugly, can leak but works. When I do have an accident (and think, again?) I remind myself what it was like to have loose stools down my legs from active disease. Yuch!

    Hey, what was your post about 7 things worse than…?

  10. Trina
    Trina September 16, 2013 at 7:22 pm | | Reply

    I think it would be a great idea! When I had insurance I used the medtronic pump it wasn’t the mini. Now I have no insurance and buying one with supplies is way too expensive so, my blood sugars are way off! I hope someone picks this up soon!!!

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