Economics, Ethics and Public Policy
Chapter 4: Price and quality
There are many contributory factors. Most are the periphery. Chapter 4 and Chapter 5 are concerned not with the fringe but with the centre. It is not enough for the facilities to be there. Foreign patients must be willing to travel to them. Price, quality and differentiation are the three variables that most influence them when they make up their mind to go. Differentiation is the subject of Chapter 5. Section 4.2 of the present chapter considers price and section 4.3 considers quality. Before that, section 4.1 examines the evidence. It tries to establish what is known about the relative impact of the three causal variables, together with the very human fear of the unknown that tempts potential travellers to stay at home. The relative impact will not always be the same. Over time the prices in a single marketplace will tend to converge. Transparency, information, supply and demand will act to enforce the law of one service, one price. It could have a dampening effect on medical tourism. If prices cluster around a single equilibrium, there is then less of an incentive for the money-minded to go abroad. The medical tourism industry will have to rethink its role. Competition based on quality and differentiation is likely to be the new distinction that divides.
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