Price Discrimination in Healthcare and Family Health Care Insurance Essay

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Summary of the article “The Beauty and Benefits Of The Family Health Care Insurance” by Kritthaphat N

The household expense on health care goes on increasing year by year due to increase in the insurance premium, increase in the prices of medicines and also due to the increase in service charge of hospitals. This article states that today different diseases like cancer, heart disease…etc. can be avoided if a person lives his life carefully. This article suggests that joining in family insurance scheme is a better thing to be done, so that in an emergency situation related to health care of a person or his family, he will not run short of cash. (The beauty and benefits of the family health care insurance, 2008).

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Summary of the article “How global pricing works – health care organizations – Managed Care” by Margo P. Kelly

The article states that health care organizations should follow global pricing policy. A global pricing policy is one which charges global fees from the patients for the services provided by the healthcare organization. The global price includes the charge to the physician. The benefit of the global pricing is that payer of the price and the service provider share equal risk. The global pricing is a better way to manage risk to implement policy of global pricing which ensures risk sharing (Kelly, 2009).

Price Discrimination

Price discrimination is the fixing different prices for different groups of consumers for identical products or services, even when the cost is equal. Discrimination among buyers may be on the basis of income, race, age or geographical area. Hospitals charge different payments from different customers for identical services. This is also a kind of price discrimination. Price discrimination is a common trend in healthcare system. The main objective of price discrimination is to maximise revenue and increase the profit of the organisation. In US hospitals, high insurance holders get high reduction in price than the small insurance holders. Insurance sector considers the people with discrimination by charging different prices for similar service. The price discrimination provides better concession for the people with high insurance coverage and the people with lower insurance get smaller concessions. (The pricing of U.S. hospital services, 2009).

The discriminative practice in the health care is not the violation of Robinson Patman Act

Robinson Patman Act is the first Anti-price discrimination act and prevents the sellers charging different prices from different buyers for identical products. It tries to reduce the power of the big buyers who enjoy price discounts. Robinson Patman

Act provides an important tool to resist market power mistreatment by large buyers. The Act applies when there are sales to different buyers at various prices and requires that the goods must be interstate commerce. It is applied only to sale of material goods and is possible for those goods of “like grade or quality.” (Robinson-Patman act, 2009, p.7).

This Act cannot be applied to services especially insurance services. The services like health care or insurance do not come under the purview of the Act. The reason is that there is a difference between nature of business between organisations dealing in products and organisations dealing in services. Therefore, it can be said that the practice of charging different or discriminative prices to the patients based on insurance coverage or other factors is not a violation of Robinson Patman Act. The reason is that the industries involved in this point of discussion that is insurance industry and health care service, are purely service providers and hence not a violation of Patman Act.

References

  1. Kelly, M P. (2009). Health care industry: How global pricing works – health care organizations – managed care. BNET.
  2. (2009). The Free Dictionary: By Farlex. Web.
  3. The beauty and benefits of the family health care insurance. (2008). Articlesbase: Free online Articles Directory.
  4. . (2009). Medscape Today. Web.
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IvyPanda. (2021) 'Price Discrimination in Healthcare and Family Health Care Insurance'. 11 November.

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IvyPanda. 2021. "Price Discrimination in Healthcare and Family Health Care Insurance." November 11, 2021. https://ivypanda.com/essays/price-discrimination-in-healthcare/.

1. IvyPanda. "Price Discrimination in Healthcare and Family Health Care Insurance." November 11, 2021. https://ivypanda.com/essays/price-discrimination-in-healthcare/.


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IvyPanda. "Price Discrimination in Healthcare and Family Health Care Insurance." November 11, 2021. https://ivypanda.com/essays/price-discrimination-in-healthcare/.

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