Charging Price Research Articles

The Effects of Price Transparency Regulation on Prices in the Healthcare Industry

Using micro data on actual healthcare purchases, we provide evidence on the causal effects of charge-price transparency regulation (PTR). We find that PTR causes providers to reduce charges by approximately 6%. However, despite the strong cross-hospital correlation between charge and actual prices, these reductions do not lead to lower actual payments. Cross-sectional variation in the estimated treatment effect suggests that the reputational costs of perceived overcharging rather than increased consumer search explain the reduction in charges. Our results show that reputational concerns affect hospitals’ charge setting strategies and illustrate how the healthcare industry’s complex, heterogeneous pricing structure makes it difficult to increase consumer welfare by increasing transparency.

Agent-based modelling of water price negotiation for domestic water management in deurbanisation society of Kanazawa City, Japan

To coordinate urban development with domestic water demand, this paper introduced an agent-based model of household water consumption simulation (HWCSim) to simulate the volume of household water consumption regulated by government total amount control. An important water price negotiation module is embedded in HWCSim model to determine the charge price of water resource during government total amount control. The simulation result shows that the volume of household water consumption could be basically regulated through government adjustment of water price according to the control threshold of regional water supply capacity.

Towards a Balanced Value Business Model for Personalized Medicine: An Outlook

Novel targeted drugs, mainly in oncology, have commanded substantial price premiums in the recent past. Consequently, the attention of pharmaceutical companies has shifted away from the traditional low-price and high-volume blockbuster business model to drugs that command high, and sometimes extremely high, prices in limited markets defined by targeted patient populations. This model may have already passed its zenith, as the impact of more and more high-priced drugs coming to market substantially increases their combined burden on payors and public health finances. This article introduces a new 'balanced value' business model for personalized medicine, leveraging the emerging opportunities to reduce drug development cost and time for targeted therapies. This model allows pharmaceutical companies to charge prices for targeted therapy below the likely future thresholds for payors' willingness to pay, at the same time preserving attractive margins for the drug developers.

INTEGRATED DECISION ON PRICING, PROMOTION AND INVENTORY MANAGEMENT

Firms often utilize promotion (such as coupons, advertisements, recruitment of excellent salespeople, and leafleting etc.) and dynamic adjustment of price to manage customers as well as proper production/inventory plan to satisfy the customers to get maximal profit in a firm. The decision on promotion and pricing and the decision on production/inventory must support each other. This paper addresses coordinated decision on pricing, promotion(non-price promotion) and inventory management. Specifically, we study a single item, periodic review model. The demand function is a linear demand function in which the market scale can be affected by the promotion conducted in that period. Unsatisfied demands are fully backlogged. We characterize the structure of the optimal policy that simultaneously determines the price, the promotion and the ordering quantity to maximize the total discounted profit with finite and infinite period problems. We show that the optimal replenishment policy is the quasi base stock list price target promotion policy, i.e., there exist a critical inventory level, a list price and a target promotion such that it is optimal to order up to the critical level, charge the list price and conduct the target promotion when the initial inventory is below the critical level and order nothing, conduct a higher promotion and charge a proper price to increase the demand otherwise. We also prove that the expected demand and the optimal promotion are increasing in the inventory, and price and promotion are complementary. Then we extend the problem to the case with capacity constraint. We show that the modified quasi base stock list price target promotion policy is optimal. For the joint decision problem on pricing, promotion and inventory control with positive fixed setup cost, we show that the optimal policy is (s, S, p, e) policy. That is, there exist two critical inventory levels stand St(st≤ St), a list price ptand a target promotion etin period t such that order up to St, charge price ptand conduct promotion etwhen the initial inventory is less than stand order nothing, charge a proper price and conduct a proper promotion otherwise.

Are Corporate Loans Properly Priced? Indonesian Empirical Study

The vast growth of banking loans from 1990-1997 is marked with the seemingly high NPL rate. This raises doubts to whether lenders have indeed assessed risk properly, thus resulting in appropriate loan pricing. This research aims to examine if loan pricing prior the crisis in Indonesia has been performed properly, in way that perceived 'bad borrowers' (high-risk borrowers) are charged higher loan price than are perceived good borrower (low-risk borrowers). The variables employed in this research are: loan maturity, loan size, the existence of collateral, borrowers' status (listed or non-listed), and some control variables such as industry and loan contract's deal date. This research also examines subsamples based on their asymmetry information level, specifically: non-listed borrowers an listed borrowers, then foreign and domestic lenders. We run our models with Ordinary Least Squares (OLS) regression, using white correction heteroskedasticity. The primary source of data for this study is the Deals can database compiled by LPC (Loan Pricing Corporation). Data sample used are prior to the crisis from the period 1990-1997. All in all, the research indicates that loan pricing in Indonesia were not properly conducted. Loan pricing are better performed on listed borrowers than on non-listed borrowers. Still, the results of foreign and domestic lenders reveals that domestic lenders tend to assess risk and price loans better than do foreign lenders.

Limit order books and trade informativeness

In the microstructure literature, information asymmetry is an important determinant of market liquidity. The classic setting is that uninformed dedicated liquidity suppliers charge price concessions when incoming market orders are likely to be informationally motivated. In limit order book (LOB) markets, however, this relationship is less clear, as market participants can switch roles, and freely choose to immediately demand or patiently supply liquidity by submitting either market or limit orders. We study the importance of information asymmetry in LOBs based on a recent sample of 30 German Deutscher Aktienindex (DAX) stocks. We find that Hasbrouck's (1991) measure of trade informativeness Granger causes book liquidity, in particular that required to fill large market orders. Picking-off risk due to public news-induced volatility is more important for top-of-the book liquidity supply. In our multivariate analysis, we control for volatility, trading volume, trading intensity and order imbalance to isolate the effect of trade informativeness on book liquidity.

Examining characteristics, knowledge and regulatory practices of specialized drug shops in Sub-Saharan Africa: a systematic review of the literature.

BackgroundSpecialized drug shops such as pharmacies and drug shops are increasingly becoming important sources of treatment. However, knowledge on their regulatory performance is scarce. We set out to systematically review literature on the characteristics, knowledge and practices of specialized drug shops in Sub-Saharan Africa.MethodsWe searched PubMed, EMBASE, WEB of Science, CAB s, PsycINFO and websites for organizations that support medicine policies and usage. We also conducted open searches using Google Scholar, and searched manually through references of retrieved articles. Our search included studies of all designs that described characteristics, knowledge and practices of specialized drug shops. Information was abstracted on authors, publication year, country and location, study design, sample size, outcomes investigated, and primary findings using a uniform checklist. Finally, we conducted a structured narrative synthesis of the main findings.ResultsWe obtained 61 studies, mostly from Eastern Africa, majority of which were conducted between 2006 and 2011. Outcome measures were heterogeneous and included knowledge, characteristics, and dispensing and regulatory practices. Shop location and client demand were found to strongly influence dispensing practices. Whereas shops located in urban and affluent areas were more likely to provide correct treatments, those in rural areas provided credit facilities more readily. However, the latter also charged higher prices for medicines. A vast majority of shops simply sold whatever medicines clients requested, with little history taking and counseling. Most shops also stocked popular medicines at the expense of policy recommended treatments. Treatment policies were poorly communicated overall, which partly explained why staff had poor knowledge on key aspects of treatment such as medicine dosage and side effects. Overall, very little is known on the link between regulatory enforcement and practices of specialized drug shops.ConclusionsEvidence suggests that characteristics and practices of specialized drug shops differ across rural and urban locations, and that these providers are highly responsive to client demand. However, there is a dearth in knowledge on how regulatory enforcement influences their characteristics and practices, and what strategies can be employed to strengthen the governance of the retail pharmaceutical sector.

Service and Price Competition When Customers Are Naive

We consider a system of two service providers each with a separate queue. Customers choose one queue to join upon arrival and can switch between queues in real time before entering service to maximize their spot utility, which is a function of price and queue length. We characterize the steady‐state distribution for queue lengths, and then investigate a two‐stage game in which the two service providers first simultaneously select service rates and then simultaneously charge prices. Our results indicate that neither service provider will have both a faster service and a lower price than its competitor. When price plays a less significant role in customers’ service selection relative to queue length or when the two service providers incur comparable costs for building capacities, they will not engage in price competition. When price plays a significant role and the capacity costs at the service providers sufficiently differ, they will adopt substitutable competition instruments: the lower cost service provider will build a faster service and the higher cost service provider will charge a lower price. Comparing our results to those in the existing literature, we find that the service providers invest in lower service rates, engage in less intense price competition, and earn higher profits, while customers wait in line longer when they are unable to infer service rates and are naive in service selection than when they can infer service rates to make sophisticated choices. The customers’ jockeying behavior further lowers the service providers’ capacity investment and lengthens the customers’ duration of stay.

Price Discrimination and Fairness Concerns

We analyze the profitability of third degree price discrimination under consideration of consumers' fairness concerns within an experiment and explain the results within a theoretical framework. We find that with an increase in the price differential negative reciprocal reactions by disadvantaged consumers become stronger compared to positive reciprocal reactions by advantaged consumers. Consequently, the profit maximizing price differential lies below the one predicted to be optimal by standard theory. Further, profitability increases when consumers who are regarded as poorer are charged lower prices compared to when the wealth of the different consumer groups is unknown.

Export Prices of U.S. Firms

Using confidential firm-level data from the United States in 2002, we show that exporting firms charge prices for narrowly defined goods that differ substantially with the characteristics of firms and export markets. We control for selection into export markets using a three-stage estimator. We have three main results. First, we find that that highly productive and skill intensive firms charge higher prices, while capital-intensive firms charge lower prices. Second, the very large correlation between distance and export prices found by Baldwin and Harrigan (2011) is largely due to a composition effect. Third, U.S. firms charge slightly higher prices to larger and richer markets, and substantially higher prices to markets other than Canada and Mexico.

The Impact of Distribution Intensity on Brand Preference and Brand Loyalty

Several studies attempted to conceptualize and measure brand equity. Brand equity constructs identified include awareness, associations, perceived quality, and loyalty, among others. Further, brand performance has been operationalized in terms of market share, ability to charge price premium, and distribution coverage. While most studies focused on consumer-based constructs, few researchers tested the effect of distribution intensity on brand performance. This study advances a model that links distribution intensity with brand preference and loyalty, and empirically tests it on the fuel industry in Egypt. First, in-depth interviews with industry experts were conducted to validate research hypotheses. Then, online surveys were distributed to test model relationships on four leading brands. Results revealed that affect, satisfaction, perceived quality, as well as distribution intensity significantly affected brand preference; which in turn was the key driver to brand loyalty. It is recommended that firms consider the role of distribution while developing marketing strategies and brand-building activities.

The pricing of charging for electric vehicles in China—Dilemma and solution

The number of electric vehicles in China is expected to grow rapidly, triggering the nationwide large-scale construction of charging stations. At the same time, a reasonable charging price has not been established. This article records the views of station operators and EV users and calculates a charging pricing range. The price should not only ensure the profit of operators, but also help reduce EV users’ expenditure compared to using internal-combustion-engine vehicles. Based on current energy prices and battery costs, charging stations are unable to make profit, and the pricing shortfall is up to 0.78 RMB yuan(kWh) −1. Only with a 25% increase in energy price or 25% reduction in battery cost can charging stations become profitable. Several suggestions are proposed to improve station profits. First, ensuring a high station load is helpful to increase profits, and it is estimated the reasonable number of chargers in Beijing is approximately 6000, distributed among 672 stations. Second, the use of storage batteries for on/off-peak electricity self-management can also increase the annual profit by 600,000 RMB yuan. In addition, other methods like a jointed station alliance, multiple energy supplement approaches, vehicle-to-grid technology and state subsidy can also accelerate the development of the charging service industry.

Using dental care resources optimally

Modern lifestyle changes led to increased dental care needs in India. Consequently, there has been a sharp rise in dentist numbers. Karnataka state alone produces 2,500 dentists annually, who are engaged in the non-government sector owing to inadequate public sector opportunities. This article aims to assess Karnataka private dental clinic quality and efficiency. Dentists were interviewed using a close-ended, structured interview schedule and their clinics were assessed using a checklist adopted from guidelines for providing machinery and equipment under the National Oral Health Care Programme (NOHCP). Dental "hotel" and clinical quality were scored based on this checklist. Clinical quality was "excellent" in 12 per cent of clinics and poor in 49 per cent. Clinics with better infrastructure charged higher price (p < 0.05). Multi-chair clinics charging fixed rates were high (81 per cent). According to 59.5 per cent of dentists, competition did not improve quality while 27 per cent felt that competition increased price, not quality. About 30.9 per cent of the poor quality clinics, 41 per cent average quality clinics and 26 per cent good quality clinics were technically efficient. The multi chair clinics offered better quality at higher prices and single chair clinics provided poorer quality at lower prices. In other words, they had a sub-optimal price-quality mix. Therefore, there is a need to regulate price and quality in all clinics to arrive at an optimal price-quality mix so that clients are not overburdened financially even while receiving good quality dental care. The article advocates that resources are used optimally as a way to achieve value for money and to achieve break-even points thereby providing quality care in a competitive market. Factors that influence dental practitioner behaviour are evaluated.

Five-year examination of utilization and drug cost outcomes associated with benefit design changes including reference pricing for proton pump inhibitors in a state employee health plan.

The Arkansas State Employee Benefits Division (EBD) is a self-insured program comprising public school and other state employees, their spouses, and dependents. Previous research published in JMCP (2006) showed drug cost savings of $2.20 per member per month (PMPM; 37.6%) or annualized savings of $3.4 million associated with a benefit design change and coverage of the proton pump inhibitor (PPI) omeprazole over-the-counter (OTC) beginning in March 2004. On May 1, 2005, brand esomeprazole was excluded from coverage, with current users grandfathered for 4 months until September 2005. Reference pricing for PPIs, including esomeprazole but excluding generic omeprazole, was implemented on September 1, 2005, and the beneficiary cost share for all PPIs except generic omeprazole was determined from comparison of the PPI actual price to the $0.90 omeprazole OTC reference price per unit. To examine PPI utilization and drug costs before and after (a) excluding esomeprazole from coverage (with grandfathering current users) and (b) implementing a therapeutic maximum allowable cost (TMAC), or reference-pricing benefit design, for the PPI class in a large state employee health plan with fairly stable enrollment of approximately 127,500 members in 2005 through 2008 and approximately 128,000 members in 2009 Q1. The pharmacy claims database for the EBD was used to examine utilization and cost data for PPIs in a longitudinal analysis for the 61-month period from March 1, 2004, through March 31, 2009. Pharmacy claims data were compared for the period 14 months prior to esomeprazole exclusion (preperiod), 4 months during the esomeprazole exclusion (postperiod 1), and the ensuing 43 months of PPI reference pricing (postperiod 2). PPI cost and utilization data for the intervention group of approximately 127,500 beneficiaries were compared with a group of 122 self-insured employers with a total of nearly 1 million beneficiaries whose pharmacy benefits did not include reference pricing for PPIs. Despite 79% of existing esomeprazole users being grandfathered during the 4-month esomeprazole-exclusion period (postperiod 1), the share of omeprazole OTC claims increased from 35.2% to 42.5% (+ 7.3 percentage points) of all PPI claims, and esomeprazole claims decreased from 16.7% to 12.0% (-4.7 percentage points), with little change in the use of other PPIs. The average allowed charge (price) per day of PPI drug therapy decreased in postperiod 1 by 8.9% from $2.81 to $2.56, while utilization increased by 2.2% from 1.83 days PMPM to 1.87 days PMPM; the net plan cost PMPM decreased by $0.40 PMPM from $3.78 to $3.38 (-10.6%), representing a reduction in spending of $35,664 per month while the average member copayment per claim was essentially unchanged. In the 43 months of reference pricing in postperiod 2, PPI utilization was essentially unchanged at 1.82 days PMPM compared with the preperiod (1.83 days PMPM) and 2.7% lower than the esomeprazole-exclusion period (1.87 days PMPM); however, price (charge per day) decreased by 38.4% during refer- RESEARCH ence pricing to $1.73 from $2.81 in the preperiod and by 32.4% compared with $2.56 in the esomeprazole-exclusion period, despite an increase in the average pharmacy dispensing fee to $5.21 per PPI claim. Net plan cost decreased by $1.87 PMPM (49.5%) to $1.91 PMPM during reference pricing compared with the preperiod ($3.78 PMPM) and by $1.47 PMPM (43.5%) compared with the esomeprazole-exclusion period 1 ($3.38 PMPM). Beneficiary costs (copayment per claim) for PPIs decreased to $1.24 PMPM ($23.27 per claim) compared with the preperiod ($1.37 PMPM, $24.95 per claim) and compared with the esomeprazole-exclusion period ($1.40 PMPM, $25.06 per claim). The reductions in net plan costs represented lower plan spending for the 43 months of reference pricing (postperiod 2) of approximately $9.4 million or an average of approximately $219,500 per month compared with the preperiod or $7.9 million (approximately $183,900 per month) compared with the esomeprazole-exclusion period. Compared with a group of self-insured health plans without pharmacy benefit reference pricing of PPIs, the cost savings over the 43-month period from September 1, 2005, through March 31, 2009, were approximately $7.2 million or $1.31 PMPM. For this state employee health plan, the policy change that excluded esomeprazole from coverage but grandfathered current users was associated with a relatively small reduction in PMPM spending on PPIs compared with the subsequent policy change that applied reference pricing to the PPI class based on the price (drug cost plus dispensing fee) for omeprazole OTC. Over 43 months of reference pricing, net plan costs fell dramatically by 49.5% PMPM compared with the preperiod or decreased by 43.5% compared with the esomeprazole-exclusion period. While utilization was essentially unchanged compared with the 18 months before reference pricing, the average pharmacy dispensing fee per PPI claim increased, and beneficiary costs PMPM decreased.

Institutionalizing Maternity: The Treatment of Mothers with Mental Illness in Contemporary Novels for Children

Children's literature has a generic narrative structure in which child protagonists develop their subjectivity and maturity. When this generic tradition meets new representational agendas for social justice and inclusivity in stories that respond to real-world issues like mental disability and mental illness, however, such child agency comes at a politically charged price. Sarah Weeks's So B. It (2005), Martine Leavitt's Heck Superhero (2004), and Gwyneth Rees's My Mum's from Planet Pluto (2004) all narrativize situations in which children are required to cope with the intellectual and rational absenteeism of mothers with either a mental disability or mental illness. In each case, disadvantage is heightened, given that these women are written into a world in which patriarchy still dominates conceptions, and (in many respects) treatments, of mental illness as part of the longer intellectual tradition stemming from psychoanalytic theory. Using an admixture of disability and gender politics, this article argues that mental disability and illness are maternalized within these novels for children, and that these novels reinforce, rather than redress, normative, medicalized, and patriarchal constructions of mental illness or disability as a flaw or a lack .

Identifying And Assessing Adverse Selection

This paper uses examples to demonstrate the generality of issues resulting from the heterogeneity of a population. Heterogeneity is fundamental to the marketing strategy of any firm. If one market segment is more expensive to service, then members of that segment might be charged higher prices or be left to one’s competitors. We pay particular attention to heterogeneity issues in financial services, specifically, insurance underwriting, lending, and investing. We examine techniques that practitioners use to assess heterogeneity in a population with respect to loss events. We employ the x2-goodness of fit test to assess whether observations in risk classes (sub partitions of population) are relatively homogenous. We use a sign-rank test to assess whether or not two loss distributions from different risk classes were drawn from the same probability distribution. We discuss how mutual ownership and price fixing have evolved as built-in safety nets to cope with modeling limitations.

Limit Order Books and Trade Informativeness

In the microstructure literature, information asymmetry is an important determinant of market liquidity. The classic setting is that uninformed dedicated liquidity suppliers charge price concessions when incoming market orders are likely to be informationally motivated. In limit order book markets, however, this relationship is less clear, as market participants can switch roles, and freely choose to immediately demand or patiently supply liquidity by submitting either market or limit orders. We study the importance of information asymmetry in limit order books based on a recent sample of thirty German DAX stocks. We find that \cpos{hasbrouck91a} measure of trade informativeness Granger-causes book liquidity, in particular that required to fill large market orders. Picking-off risk due to public news induced volatility is more important for top-of-the book liquidity supply. In our multivariate analysis we control for volatility, trading volume, trading intensity and order imbalance to isolate the effect of trade informativeness on book liquidity.

Ethical Issues Surrounding Intellectual Property Rights

Much of today’s international trade is conducted according to trade agreements that involve substantial and uniform protections of intellectual property rights. Intellectual property rights are a socio-economic tool that create a temporary monopoly for inventor firms and enable such firms to charge prices for their innovations that are many times higher than the marginal cost of production of the innovations. This allows the inventor firms to salvage their research-costs and secure a profit on their innovations. A large body of contemporary philosophical and interdisciplinary literature suggests that intellectual property rights give rise to a number of ethical problems. This review paper seeks to give an overview of what these problems are. It also offers an outline of proposals as to how these problems might be alleviated, and it briefly explains the two classical defenses of the ethical permissibility of intellectual property rights. The ethical issues surrounding intellectual property rights are most pertinent when it is socially valuable goods that are given intellectual property protection. The discussions in this paper revolve around just one product type in order to bring out the broader ethical issues surrounding intellectual property rights. In line with much contemporary literature on the ethical dimensions of intellectual property rights, the product type in question is life-saving medicines.

Retailer Reputation and Online Pricing Strategy

This study investigates whether online retailer reputation can influence their pricing strategy and thus provide an explanation for online price dispersion. Online comparison shopping services, such as BizRate.com, not only aggregate price information but also collect and publish consumer reviews and ratings of online retailers. Such reviews and ratings may be used as measures of retailer reputation. Our analysis of retailer reputation and prices on a set of electronic products showed that online retailers with better reputation charged higher prices. In addition, the effects of retailer reputation on pricing strategy were found to be more significant for higher valued products.

Tagging is Connecting: Shared Object Memories as Channels for Sociocultural Cohesion

Tagging is Connecting: Shared Object Memories as Channels for Sociocultural Cohesion