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Case Study: Price Discrimination in Practice

Price discrimination is common in healthcare, as well as other industries. Price discrimination can increase profits. Read case study 12.1 in the textbook on price discrimination and compose a case study report that follows the recommended format in the “HSC450 Case Study Rubric”.

Read the Case Study 12.1  [PDF, File Size 341 KB] in chapter 12 of the Lee textbook.

Write a two-page, double-spaced paper in APA format, including a title and reference page.  Cite and reference the Lee textbook and two additional scholarly resources from the readings.

Include evidence on price discrimination and address the following questions in your paper narrative (do not copy and paste questions and answer one at a time, but rather integrate the answers as appropriate in your written text. Q & A format is not acceptable):

• Why do drug firms give discounts voluntarily?

• Do other healthcare providers routinely give discounts to some customers?

• Why do the uninsured typically pay the highest prices?

• Why would a hospital usually get a better price for a drug than an insurance company?

• Why does the VA get such low prices?

• Suppose a law was enacted that required drug manufacturers to give state Medicaid agencies the same price they negotiated with the VA. How would Medicaid and VA prices change?

• Should Medicare adopt the VA formulary?