Health Care Economics Essay Discussion
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Health Care Economics Essay Discussion
MY POST> Conditions for Price Discrimination
Price discrimination is a technique in which an entity sets various prices for its products and services for the consumers in order to generate more income. The firm charges each purchaser the maximum price based on what they think the purchaser will agree to pay for a given service or good (Depoorter and Meurer, 2018). The purpose of this paper is to discuss the conditions that have to be met for a successful price discrimination.
Firstly, the firm should ensure there is no resale of the goods from on purchaser to another. This is to prevent instances where customers purchase products at a lower price and resell them at a higher price to other customers thus making a profit. In such cases, the re-sale could take many forms such as shops dealing with second hand items, airline companies that re-sale air tickets which make profits on capitalizing on such arbitrages.
Another key condition is the existence of an imperfect competition market. In this kind of market there are several firms offering dissimilar services or goods. Price discrimination is possible in this kind of market because firms set their prices and therefore they have control on the prices and the consumers have asymmetric information. There has to be some degree of monopoly since the producers in the imperfect competition market are price setters and not price takers. The firms also control the supply of goods and services to the market.
Finally, various market segments must be identified for price discrimination to happen. These are identifiable group of families, individuals, firms and businesses that share various characteristics that are homogenous in nature. According to Cowan (2016), this enables producers to charge consumers different prices depending on their reaction to the price changes. This is because different clients have varied demand elasticity thus possible to price discriminate.
References
Cowan, S. (2016). Welfare?increasing third?degree price discrimination. The RAND Journal of Economics, 47(2), 326-340.
Depoorter, B., & Meurer, M. J. (2018). Price Discrimination & Intellectual Property. UC Hastings Research Paper, (303), 18-26.
I need to reply to these two classmates regarding my post
Beverly,
You presented several valid points in your post. Can you discuss whether or not price discrimination is possible in healthcare markets such as in a place like Houston, TX whereby multiple healthcare organizations are all in the same area?
Hello Beverly,
Reading through your information on price discrimination it reminded me of the price transparency complaints in healthcare. I have read many articles on the variation in cost of the same procedure at different locations. A good example is the cost of an MRI in New Hampshire, there can be up to a 70 percent difference in price (Palmer, 2014). Do you think this is due to price discrimination? or are there more factors than that?
References:
Palmer, J. (2014, September 24). Cost Variation: Why does the same medical procedure vary in cost? Retrieved from https://www.unh.edu/healthyunh/blog/healthcare-consumerism/2014/09/cost-variation-why-does-same-medical-procedure-vary-cost
Health Care Economics Essay Discussion
RUBRIC
Excellent Quality
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Introduction 45-41 points
The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.
Literature Support
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The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.
Methodology
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Content is well-organized with headings for each slide and bulleted lists to group related material as needed. Use of font, color, graphics, effects, etc. to enhance readability and presentation content is excellent. Length requirements of 10 slides/pages or less is met.
Average Score
50-85%
40-38 points
More depth/detail for the background and significance is needed, or the research detail is not clear. No search history information is provided.
83-76 points
Review of relevant theoretical literature is evident, but there is little integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are included. Summary of information presented is included. Conclusion may not contain a biblical integration.
52-49 points
Content is somewhat organized, but no structure is apparent. The use of font, color, graphics, effects, etc. is occasionally detracting to the presentation content. Length requirements may not be met.
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37-1 points
The background and/or significance are missing. No search history information is provided.
75-1 points
Review of relevant theoretical literature is evident, but there is no integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are not included in the summary of information presented. Conclusion does not contain a biblical integration.
48-1 points
There is no clear or logical organizational structure. No logical sequence is apparent. The use of font, color, graphics, effects etc. is often detracting to the presentation content. Length requirements may not be met
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