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Ventilators And The Collective Buying Power Of The European Union

What if we’re treating this coronavirus the wrong way?

This is a delightful example of the idiocy of much modern politics:

Downing Street has claimed it failed to take part in an EU scheme to source life-saving ventilators to treat coronavirus because it accidentally missed the deadline.

No 10 initially said it did not take part because the UK was “no longer a member” and was “making our own efforts”.

But after critics accused Boris Johnson of putting “Brexit over breathing”, a No 10 spokesman clarified that it had missed out because of an error and would consider participating in future. It is understood the UK claims not to have received an email from the EU asking it to participate.

The mix-up means the UK has missed out on benefiting from the collective buying power of the EU. The bloc is seeking to use its clout to source large numbers of ventilators and protective equipment.

Sure collective buying power exists, is a real thing. Ordering 270,000 widgets will likely get you a better price than 27 orders of 10,000 each.

Well, maybe. The real world doesn’t always work that way but still.

Now, hands up everyone who thinks that placing that buying decision – and specification – up there at the Brussels level will work faster and better than having it lower down the totem pole of governance levels?

For example, has the EU placed that buying order already? Given, you know, that the UK government has already placed one with Dyson?

Further, while economies of scale is something that most have heard of the equally true existence of diseconomies of scale is rather less well known.

Now, my best guess is that all of these government orders of ventilators are going to be barely functioning equipment delivered late. But that’s just me. The thing here though is that assumption that the EU is going to get stuff less bad and less late. Which isn’t something I’d be willing to bet upon, not at all.

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Phoenix44
Phoenix44
10 months ago

I can’t believe the economies of scale work for ventilators past a certain level – enough for 65 million people say.

No single company can possibly produce enough for the EU in the timeframe in which they are needed. So you need multiple suppliers.

Spike
Spike
10 months ago
Reply to  Phoenix44

Yes, an economy of scale reflects the spreading of fixed costs of processing an order over more units. Surely in the numbers wanted by the UK, the fixed costs are negligible.

Additional suppliers will come out of the woodwork if the price is allowed to rise to cover the cost of conversion. This means Bernie Sanders and AOC need the first units (or a substitute using duct tape) to muffle their cries that the units are a “human right.”

John B
John B
10 months ago
Reply to  Spike

Additional suppliers… will have to sign an undertaking, in the UK anyway, to keep replacement parts in stock and available for ten years, and the machines have to meet a long list of health and safety requirements. Don’t expect a rush of additional suppliers.

Esteban
Esteban
10 months ago

Another advantage of the EU approach is that the supplier will be required to tick all the right boxes – diversity quotas, fair trade statements, commitment to zero carbon by 2050, etc. We wouldn’t want to get good ventilators fast and relatively cheap if they didn’t tick the boxes.

john77
john77
10 months ago

The argument for block purchasing is that you get the stuff marginally cheaper, not that production will be magically increased above previous physical limits.
So, what are missing out on? Not the ventilators because France is confiscating medical equipment passing through its territory en route to the UK. Possibly a price reduction of €1 per ventilator, probably a lot of EU bureaucratic paperwork.
It is obvious that the media dislike Boris more than I do.

Barks
Barks
10 months ago

Talk about missing the forest for the trees. Can even journalists be stupid enough to believe economies of scale have any meaning in a time of short manufacturing capacity?

Bongo
Bongo
10 months ago

I didn’t know health service procurement was even an EU competence. I always thought this was already devolved to member States.
The Customs Union is a competence of theirs – they could easily declare UFT for 3 months. Just need all those members to agree though, and oh, someone would whine about those quotas being lifted, and the lost revenue from the tariffs. Someone would say fewer customs officials would be needed for a while, or the same number but working shorter days, and another negotiator would find a down side to that.
And then it would be over.

John B
John B
10 months ago

Ventilators are usually plugged into special (in the UK red) sockets on a protected uninterruptible power supply.

Will the Government also be installing more circuitry? A patient on a ventilator needs other electro medical equipment plus trained staff to monitor and care for the patient.

Where will all the extra specialised staff, beds, equipment and space to put it all in come from?

Expect to be able to pick up a ventilator on eBay, very cheap, very soon when this headless chicken race runs out of steam.

dodgy geezer
dodgy geezer
10 months ago
Reply to  John B

When it comes to end-of-life, having oxygen provision is a useful service which dying people will probably appreciate.

I am nearer my end than my beginning, and am wondering whether the purchase of a cheap oxygen generator after the scare is over would pay dividends in a few (hopefully many) years…

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