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Ha T. Tu and Jessica H. May, Self-Pay Markets In Health Care: Consumer Nirvana Or Caveat Emptor?, Health Affairs Web Exclusive, February 6, 2007 [Abstract] [PDF] [Full Text] [Reprints & Permissions]

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Inadequate

Christopher Press   ( 9 February 2007 )

Inadequate 9 February 2007
Christopher Press, Partner Morgan Healthcare Consulting, LLC, Atlanta Send comment to journal: Re: Inadequate cpress{at}mindspring.com Christopher Press	The article by Tu and May contains problematic methodological approaches, given the research objective and asserted findings, and inadequate comprehension of marketing fundamentals. To conclude from interviews with experts, vendors, and others that buyers do not price shop is tenuous, at best. There is no evidence that the parties interviewed know the workings of the consumers' minds. It would be better to interview actual patients ex post about their shopping experience, or to interview candidates about their intentions -- and whether one such price consideration is the perceived differential between ophthalmic orthotics (glasses and contact lenses) and LASIK. As to "inconsistent bundling:" another term would be "product differentiation," a time-honored marketing technique by which one purveyor seeks to be distinct from competing alternatives on a basis other than -- stay tuned -- price. "Consistent bundling" would lead to commoditization, in which case the only distinguishing feature is price. Generally, this is a condition sellers wish to avoid, and ample evidence of this can be found from the computer I'm using to phone and cable services, bank services, toothpaste, TVs, air travel, bagged lettuce, fresh apples (why are there Romes, MacIntoshes, Northern Spies, Delicious, Golden Delicious, Jonathans, etc.?), hotels, cars, newspapers, auto insurance, health insurance, and peer-reviewed journals -- just to name a few. The side trip into "Other Self-Pay Markets" is bewildering. Are the authors asserting that people do not price shop for these items? The authors' findings contradict the general behavior of consumers who comparison shop every day for items simple and complex in a market economy -- which supports products through an astonishing array of products and price points from WalMart to Neiman Marcus. It's as if someone claimed to find a place on earth where ice didn't melt at 33 degrees. For instance, let's watch Grampa. He needs a 400mg medication twice a day, but he requests his medication in 800mg doses so that he can buy a pill-splitter and thereby create his own 400mg doses. The 800mg tablets typically cost only slightly more than the 400mg tabs, and the savings are noteworthy. If not money (net price), what explains this conduct? Idle time? A fixed income? An addled mind? And if this behavior were anecdotal, why aren't the pill-splitter manufacturers out of business? Grampa is influenced by price. Finally, I would offer that the dichotomy of caveat emptor and Nirvana is false. Caveat emptor is Nirvana. The predicate of caveat emptor is the freedom to choose (see Friedman) -- including the freedom to choose unwisely or casually. The freedom to make my own bad choice is superior to involuntarily ceding the choice to someone else -- to select, for example, my health insurance plan, or the LASIK provider. An article appearing under the rubric "Market Watch" should evidence greater command of the marketing discipline.