The Hospital: Life, Death, and Dollars in a Small American Town

by Brian Alexander

Consolidation within the medical equipment industry now seemed to have been a bad idea, too. For example, in 2012, Covidien—the Tyco spin-off that was purchased by Medtronic several years later—bought a maker of ventilators called Newport Medical Instruments. Regulators suspected Covidien bought Newport because Newport had designed a cheaper vent that threatened to compete with Covidien’s expensive one. Covidien, they thought, wanted to squash the cheaper design. Two years before the buyout, Newport had signed a deal with the federal government in which Newport would make thousands of vents at a cost to the government of $3,000 per unit, as a way to bulk up the national stockpile in case of an epidemic. Covidien backed out of the government deal after it bought Newport, and the ventilators were never made. As a result, states found themselves competing against each other to obtain ventilators to treat Covid-19 victims, and paying ransom-level prices to companies when they found some. New York paid about $59,000 per unit.