The healthcare conundrum: what can we really do?

Citation

Mukherjee, A. (2009), "The healthcare conundrum: what can we really do?", International Journal of Pharmaceutical and Healthcare Marketing, Vol. 3 No. 2. https://doi.org/10.1108/ijphm.2009.32403baa.001

The healthcare conundrum: what can we really do?

Article Type: Editorial From: International Journal of Pharmaceutical and Healthcare Marketing, Volume 3, Issue 2

Recently, most healthcare leaders face Canute’s predicament. History has not been kind to Canute. The great eleventh century King of England, getting tired of his fawning courtiers, took them to the seashore and commanded the tide to halt and the waves to roll back. It was to be a demonstration of the limitation of his powers. Canute in legend became the man who tried to turn the tide and failed. Similarly, in the public mind, the healthcare policy makers seem to be trying to reverse an inexorable trend of higher healthcare costs, lower quality, and inadequate service. With the ageing of the baby boomers in the developed countries and the economic growth without health policy in developing countries, observers call healthcare the ticking time-bomb of our generation.

The healthcare sector is unique. The basis for the development and growth of International Journal of Pharmaceutical and Healthcare Marketing (IJPHM ) as a scholarly journal is the uniqueness of the healthcare sector. Almost every decision in healthcare involves multiple objectives and inherent trade-offs. Given the enormous challenges and trade-offs involved in managing healthcare and yet its impact on the economic recovery plans set forth in most countries to counter the recession, attempting to solve the healthcare conundrum is both a humbling and a revelatory exercise.

The healthcare debate is replete with conundrums. According to Porter and Teisberg (2004), the presence of significant competition in US healthcare industry has not led to the usual benefits of increased value, decreased costs and improved quality. Quite to the contrary. What we have seen are ever-increasing costs, restricted access, poorer service, declining standards of care, frequent treatment errors, wide variations in practice patterns, slow adoption of best practices, and slow diffusion of innovation. The reason for this paradox is that the major actors in healthcare – providers, health plans, and employers – have treated healthcare as a commodity and the competition as “zero-sum.” Herzlinger (2007) laments that the current health care market does not work at all like other markets. Herzlinger argues that health care is dead because free market competition has been suppressed and consumers, who should be central to decision-making about their health, are excluded. Nelson et al. (2008) take a closer look at ethical conflicts in healthcare. The authors explore the tangible and intangible costs related to ethical conflicts and consequences of resolving ethical dilemmas. Researchers have also discussed other important healthcare trade-offs such as: ethics versus expediency; equity versus efficiency; cost versus quality; access versus competitiveness; health versus healthcare; production versus safety; investments and time for research and development versus speed to market; service versus protocols in healthcare delivery; research for lifestyle diseases versus third-world diseases; new innovations versus healthcare disparities; nationalized healthcare versus patient choice, etc.

Such conundrums and more characterize some of the research priorities in healthcare marketing and management. Research on healthcare conundrum needs to adopt a broader look to enable a closer view, multiple solutions to address a lone problem, and different perspectives that are based on and lead to one common idea (Grazier, 2008). This issue presents an ensemble of five articles that attempt to do just that.

One of the healthcare conundrums is the role of culture in the scientific practice of medicine. Extant research presents some evidence to support the view that cultural factors can influence healthcare significantly. For example, Whitman et al. (2008) point to the importance of understanding cultural differences to respond to ethnic disparities in people’s beliefs and practices related to health and illness. The first article, “Understanding health, culture, and empowerment in a disability context,” by Poh-Lin Yeoh, explores the different kinds of health-promotion activities undertaken by ethnic Chinese individuals in the USA in managing their disability from multiple sclerosis (MS). The study suggests the importance of primary and secondary health coping strategies and their impact on intra- and inter-personal empowerment. Analyzing the acculturation process of ethnic groups is essential to understanding the meaning of health held in these groups in a more holistic manner. The theory of control behavior provides the backdrop to understanding the attitudes and perceptions of the Chinese-American population towards MS. Semi-structured interviews were conducted on 36 individuals and the data analyzed using interpretive phenomenology. The results provide support for the view that individuals can empower themselves by maintaining a balance between primary and secondary control strategies with respect to their health-related goals.

The Health Affairs (2008) editorial article points to an important conundrum in healthcare policy – ensuring the availability of drugs while enabling people to afford the purchase price of their medications in countries with different levels of economic development. Do pharmaceutical companies follow price harmonization or price discrimination strategy across different countries in the same region? Mariano Rojas addresses this conundrum by providing important new insights on price discrimination by pharmaceutical companies across Central American countries, in the second article “Price discrimination by pharmaceutical companies across Central American countries.” This paper studies the regional pricing strategies followed by 17 pharmaceutical firms across six Central American countries – Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama. The investigation uses a large database of prices of identical drugs, rather than constructed price indices, to study cross-country price differences by pharmaceutical companies across the Central American region, which is crucial to understanding how markets with different economic conditions end up rationing such an essential product as pharmaceutical drugs. The results show that there are significant differences in the prices of identical drugs across the Central American countries, as well as that pharmaceutical companies follow different regional pricing strategies.

Does direct-to-consumer advertising (DTCA) increase the market size of the category or the market share of the brand? In article three, G.K. Kalyanaram enhances our knowledge on the role of endogenous modeling, as opposed to exogenous modeling, to better understand the effects of DTCA in prescription drugs. This paper investigates the effect of DTCA on market share in pharmaceutical drugs by modeling advertising decision of the firm as an endogenous decision. Using large-scale secondary data, the study finds that there is a positive and significant effect of DTCA on market share when advertising decision is modeled as an endogenous decision. The empirical results also suggest brand switching by consumers, thus offering empirical support for the argument advanced by medical insurers and providers that DTCA advertising encourages brand switching. The main contribution of this paper is the estimation of the effects of DTCA in a simultaneous model accounting for endogenous decision by the firm, thus addressing the important public policy question of the social welfare of DTCA.

One of the most controversial issues in health surrounding cloned food and its labeling represents the principal motif in the next article “Cloned food labeling: history, issues, and bill S. 414” by Jennie Feight and Nashat Zuraikat. This viewpoint article explores the conundrum surrounding cloned food sources, specifically the increasingly vocal demands by the American public for mandatory labeling. Based on an extensive review of the literature, the authors examine the role of Food and Drug Administration (FDA) and the US Congress in the light of the ethical, moral, health, economic, and political aspects of cloned food. Ethical issues surrounding cloned food labeling include animal welfare and the usurpation of the creator’s role. Health issues include the capacity of the FDA to track allergic reactions and the possibility of future protein abnormalities among consumers. Environmental and herd health are identified as more global health concerns. While agricultural cloning directly benefits biotech companies, animal breeders and livestock ranchers, the economics of demand gets murky in the light of growing consumer skepticism.

This is followed by a timely and interesting case study by Eric W. Hayden on the emerging retail health clinic model and its economic viability. The case is written against the backdrop of a debate in Massachusetts in early 2008 on allowing walk-in healthcare clinics to operate in the state. The case points to the need for an objective examination of retail health care delivery – the concept, historical evolution, relative pros and cons – as well as an assessment of its long-term prognosis. The author reports a third-party interactive survey of clinic users and a small onsite sampling, finding that the clinic business appears destined to remain a loss-leader. How sustainable a model this will be for the pharmacies remains uncertain. Ultimately, however, if the clinic model does not prove to be economically viable, and if more pharmacy operators end up walking away from the business, the real losers will be health care consumers.

We conclude with a review by Larry Allen of the book Health Care Policy Issues: An Economic Perspective authored by Paul J. Feldstein.

On the journal front, there have been more exciting developments. IJPHM is now included in Elsevier’s citation service, Scopus. Scopus is the world’s largest abstract and citation database of research literature. Inclusion in Scopus is a measure of a journal’s visibility and influence in knowledge development. It will ensure that all IJPHM articles are read, cited and tracked by many more authors and researchers across the globe.

In line with the Emerald tradition, we were invited to select the most outstanding paper and the highly commended papers published in IJPHM in 2008. As in the past year, I adopted a two-stage structured process to arrive at this decision. First, a sub-committee of the Editorial Board evaluated each article published in IJPHM 2008 and arrived at a short-list of five leading articles. They used the Emerald web page as a guide for the exercise. This shortlist of five articles was then communicated to all members of the Editorial Board with a request to rank-order the five articles on a one to five scale (1 – best and 5 – worst) and any additional article that deserved the nomination. They too used the Emerald webpage as a guide for the exercise. Based on the enthusiastic response of the majority of the board members, the final ranking was derived from all individual ranks provided by the board members. The top article in the combined rank-order was nominated for the Most Outstanding Paper Award and the next two articles were nominated for the Highly Commended Paper Awards.

Congratulations to the Outstanding Paper Award Winner:

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  Jennifer Whitty (Griffith University, Queensland, Australia), Sharyn Rundle-Thiele (University of Southern Queensland, Queensland, Australia), Paul Scuffham (Griffith University, Queensland, Australia). “Insights into public preferences for pharmaceutical funding”, International Journal of Pharmaceutical and Healthcare Marketing, Vol. 2 No. 3, pp. 216-34.

Congratulations are also due to the two Highly Commended Award Winners:

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  George P. Moschis, Scott B. Friend (Georgia State University, Atlanta, USA). “Segmenting the preferences and usage patterns of the mature consumer health-care market”, International Journal of Pharmaceutical and Healthcare Marketing, Vol. 2 No. 1, pp. 7-21.

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  Imad Baalbaki (American University of Beirut, Lebanon), Zafar U. Ahmed (Prince Sultan University, Riyadh, Saudi Arabia and Texas A&M University at Commerce, Texas, USA), Valentin H. Pashtenko (Christopher Newport University, Newport News, Virginia, USA), Suzanne Makarem (Temple University, Philadelphia, Pennsylvania, USA). “Patient satisfaction with healthcare delivery systems”, International Journal of Pharmaceutical and Healthcare Marketing, Vol. 2 No. 1, pp. 47-62.

Scott B. Friend of Georgia State University, Marketing Department, Atlanta, GA, USA has been nominated for the best reviewer award.

I would like to thank the authors, the reviewers, the Editorial Board, the publishers, and all others who have worked so hard and selflessly to make IJPHM the premier journal in its field. I am sure this issue will provide you with some more new ideas and action items. So keep reading and keep sending us your feedback and suggestions.

Avinandan Mukherjee