Pricing Options

So, if you were responsible for your healthcare costs, would you rather have the Saturn model (i.e., lowest price is posted – no negotiation) or the jewelry model (i.e., retail price means nothing other than a point to negotiate from). This would be an interesting discussion as we get into more transparency about price / cost in healthcare services.

I on the one hand love the research and negotiation process and believe that coming informed to a discussion allows me to get a better price / value. Now, it requires work, but I think the tradeoff is worth it. On the other hand, I know lots of people that would rather simply go in and pay the list price (and do so today). There is a fine line somewhere. You don’t want people to get gauged for not doing their research, but the provider of the service needs to be able to make a decent living. Market economics should drive price efficiency (i.e., if the price is too high, there should be new providers that are willing to take a lower price to steal marketshare).

I think being forced to do the research is good. You end up learning a lot more and becoming a better consumer.When I buy a house, I look at public information on the builder to understand their margins. I ask people that have bought from them what was negotiable. I compare prices for additional features (e.g., is it cheaper to have them finish my basement or someone else). Then, I can evaluate the tradeoffs.

Why is this such a big deal:

• Compare buying furniture at your local store with North Carolina. NC offers the same furniture at about 50% off.
• Try going to a jewelry store and don’t ask “how much” but “what will you sell this for”. I wouldn’t settle for less than a 40-60% discount.
• Go buy appliances or electronics. If you don’t get price matching or at least 15% off list (even the sales price), I would be surprised. I have bought things for as much as 40% off at the large stores.

Once these healthcare dollars are yours to control, this could make a big difference.