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Medical Pricing Conundrum in the United States Case Study

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Updated: Jul 1st, 2021

In the United States (US), the pricing of healthcare, including drugs and services, is rather notorious. There exist different positions on the topic; the articles that consider the positive aspects of the existing system can be found (Fonseca et al. 976). However, the pricing is still criticized for its multiple problems that put many consumers at a disadvantage. With the issues that currently plague US healthcare pricing, it is apparent that it has some room for improvement.

Several things that are causing problems for the healthcare consumers of the US can be named. First, the issue of transparency is noteworthy; in the US, patients do not learn the prices of their services and drugs before acquiring them (Sanger-Katz 4). This problem is exacerbated by high prices, and the latter issue is one of the main reasons why US healthcare is notorious (Campbell and Kaló 581; Fonseca et al. 976).

Indeed, the prices of healthcare in the US are extremely high, especially when compared to other developed countries (Campbell and Kaló 581). Furthermore, the prices are differential; depending on one’s region, provider, and insurer, the pricing in the US can vary by hundreds of dollars (Campbell and Kaló 581; Sanger-Katz 4). This issue is also a concern since it can be considered discriminatory and unfair (Campbell and Kaló 581). A common justification for high prices is that the money is likely to be reinvested and promote drug innovation (Fonseca et al. 977). This perspective is defensible, but it does not justify the rest of the presented issues.

If they cannot be justified, it may be reasonable to investigate their causes. The analysis of the current situation in the US healthcare market can be performed with the help of pricing theory. Sanger-Katz discusses the multiple factors that affect the supply in the US, including the costs of production, costs of operating a healthcare business, and increased quality of the offered goods and services (4). The competition between companies, especially insurance companies, also results in important fluctuations. As Sanger-Katz reports, the more inflexible the demand for a product or service is, the more likely it is to become more expensive in the US (4).

Conversely, when any competition is present, especially when more than one provider can be found, it is easier for insurance companies to strike better deals and promote a reduction in prices. Finally, the reason for the lack of transparency is also connected to the competition. Sanger-Katz states that it is advantageous for healthcare companies to keep their deals confidential (4). Thus, the causes of the above-mentioned problems can be observed, which means that with appropriate controls, they could be rectified.

The rationale for intervening and resolving the issues is connected to the importance of healthcare. Differential and often unreasonably high pricing would be problematic in many fields, but it is especially questionable in healthcare. The demand for healthcare is inherently rather rigid; if a person needs a service, most likely, the alternative is losing one’s health or life. The US has a discriminatory pricing system that can disadvantage an individual based on how successfully the market has managed to limit monopoly in a particular field of healthcare or a specific geographic location. The description of this situation as unfair is rather fitting (Campbell and Kaló 581). Therefore, there are indeed many problems with the US pricing system, and they may require its revision.

Works Cited

Campbell, Jonathan D., and Zoltán Kaló. ” Fair Global Drug Pricing.” Expert Review of Pharmacoeconomics & Outcomes Research, vol. 18, no. 6, 2018, pp. 581-583.

Fonseca, Rafael, et al. ” The Importance of Economic Trade-offs in Cancer Drug Pricing.” Mayo Clinic Proceedings, vol. 93, no. 8, 2018, pp. 976-979.

Sanger-Katz, Margot. “Why Those Price Swings in Medicine Are So Dizzying.” The New York Times, 2019, p. 4.

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IvyPanda. (2021, July 1). Medical Pricing Conundrum in the United States. Retrieved from https://ivypanda.com/essays/medical-pricing-conundrum-in-the-united-states/

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"Medical Pricing Conundrum in the United States." IvyPanda, 1 July 2021, ivypanda.com/essays/medical-pricing-conundrum-in-the-united-states/.

1. IvyPanda. "Medical Pricing Conundrum in the United States." July 1, 2021. https://ivypanda.com/essays/medical-pricing-conundrum-in-the-united-states/.


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IvyPanda. "Medical Pricing Conundrum in the United States." July 1, 2021. https://ivypanda.com/essays/medical-pricing-conundrum-in-the-united-states/.

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IvyPanda. 2021. "Medical Pricing Conundrum in the United States." July 1, 2021. https://ivypanda.com/essays/medical-pricing-conundrum-in-the-united-states/.

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IvyPanda. (2021) 'Medical Pricing Conundrum in the United States'. 1 July.

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