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  • Title: Research note: price uncertainty and the demand for health care.
    Author: Knowles JC.
    Journal: Health Policy Plan; 1995 Sep; 10(3):301-3. PubMed ID: 10151847.
    Abstract:
    Health care consumers in many developing countries face uncertain prices due to a variety of factors, including ad hoc price discrimination, uncertainty concerning diagnosis, and stock-outs of drugs and other supplies. The author explains that at a given average price, consumer demand should be inversely related to the degree of uncertainty in price. To the extent that cost recovery and means testing policies are formulated in ways that minimize price uncertainty to individual consumers, they should be able both to recover more resources and to target remaining subsidies more effectively, without reducing use. Demand analysis should use appropriate measures of consumers' expected prices, rather than average or actual prices, and include measures of the degree of price uncertainty in empirical models attempting to explain both the decision to seek care and the choice of provider. Further, recognizing that consumers often face highly uncertain prices for health care has important implications with regard to cost recovery, means testing, and demand analysis. These issues are discussed.
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