# The market for health technology has unique dynamics The market for health technology (excluding preventative technology and diagnostics) looks very different from markets for other new technologies. In many situations, as long as a new drug is marginally more effective, it can rapidly command massive prices and high margins. Most other (non-software) technologies need to be *significantly* better than the existing options to even be adopted.[^1] That adoption is often slow, even for a drastically superior technology, because it often requires overhauling infrastructure or processes and there are often people whose careers were based around previous paradigms. And even once a technology is adopted, the margins are far lower than therapeutics. The reasons for these differences are downstream from both intrinsic properties of health technology (especially drugs) and legal dynamics around the healthcare industry. **Intrinsic properties of health technologies** It’s easy for doctors to adopt new drugs because swapping between them requires no infrastructure or process changes. Nobody bases their career around a single drug, and if anything, doctors and hospitals are incentivized to push new drugs because they can charge higher margins on them. I’ve heard rumors that hospitals buy surgery robots not because they drastically improve outcomes, but because they can charge significantly more for a robotic surgery than a boring old human ones. Other health technologies require a bit more work to integrate, but are often used in addition to, rather than replacing, older technologies. Those dynamics increase health provider revenue and not forcing hard choices. Most other technologies replace existing systems, forcing hard choices and creating significant market uncertainty. In addition, [[The American healthcare system warps the market for health technology]] ### Related - [[Money in a discipline produces gravity wells]] [^1]: There are of course exceptions such in domains like aerospace where every ounce matters or at massive scales where cents saved per kilogram can turn into millions of dollars.