“Come on dowwwwwn!”; fateful words that all anxiously await. Having pinned their hopes on being plucked from the live audience for “Contestant Row.” The first step from which they might win a treasure trove of goodies, based on their uncanny ability (or luck) in guessing prices – prices of products that can range from a can of mushroom soup to a new car or a dream vacation.
“The Price is Right” game show has set countless records. It is the longest-running network television program in history (currently in its 46th year). And even today it remains the #1 watched USA daytime television program. Although it has tweaked its games and products slightly (adding items like VR goggles alongside the soup) to remain relevant across the decades, the vast majority of its fast-paced format remain wholly unchanged over all these years.
Game experts suggest that it is the “high win-per-minute ratio” along with the “use of life skills” (i.e. accumulated knowledge derived from purchasing) that are the key ingredients in the game’s attraction. But when asked why, Bob Barker the host of the program for 35 years, made it clear, “The reason it was so popular originally and why it is still popular is because of the powerful basic premise of the show… everyone identifies with prices. The minute we put something up for bid and a contestant offers a price, all of us are deeply involved.”
Books are written and websites filled with stories of, and tactics for, winning (with all the resulting statistics). Some of “The Price is Right” gurus will push for product pricing memorization drills and card counting-like training. Others will drive you toward a game theory-based approach which focuses more on the optimal counter bids than it does on knowing the price per se. For example, from Contestants Row, if you are last, then bidding either $1 above the lower bidder or $1 above the higher bidder, depending on the spread between the other bids, results in a 54% winning outcome as compared to 34% for all other strategies. And for the other ~75 sub-games, similar tactics abound.
But the apex moment of the show is the “Final Showcase”; here is where the big-ticket items await and only two contestants make it to this stage. The showcase offerings are presented as bundled packages. Often with a theme, but in each instance, each contestant will need to put a total price on one or the other package. And as with all The Price is Right sub-games, it is critical to get as close to the actual price as possible, but to NEVER OVERPAY; for being even $1 over is an automatic losing bid.
Interwoven with the psychology and success of The Price is Right are keen insights into human behavior and motivation. As highlighted by Barker, we all care deeply about price. And although we may differ in what we believe is an appropriate or “fair” price, we have visceral reactions when we believe we may have overpaid. The positive aspects of getting a good deal are important and motivational too. We will drive a great distance, sit in a cold pre-dawn Black Friday queue or perhaps even endure the tedium of cutting coupons to save just a little money. But as rewarding as it feels to save some, we have significantly more potent emotions attached to losing money. And The Price is Right wonderfully highlights this with its overbid elimination rule. We always feel, if/when we have overpaid, that we have lost – we feel cheated, or worse, we feel stupid.
For the vast majority of our transactional lives, we have agency, experience and expertise in buying stuff – in all but one. When it comes to buying the products and services on which we will all eventually seek and need–namely healthcare–we must all blissfully proclaim utter ignorance. For when it comes to these matters, we’ve been trained to presume that “price” cannot matter. Yet matter it must – any illusion to the contrary is truly a fool’s folly.
But what price is right? Who should decide? What value has been received? How can we know? These are but a few of the thorns in the briar patch of health economics. And depending on who you ask, the answers vary wildly. Ask the parent of a critically ill child and even the mention of price can evoke condemnation – “how could you?!!”. A similar query to a physician will often result in questions regarding the “how could we know;” medical outcomes come in variation, often wax and wane and each are steeped in long-term uncertainty; “this is more of an art than a science.” Ask an Rx R&D executive and they quickly retort, “be careful, if the incentive to invest in the remarkably risky business of drug development is compromised, then medical innovation itself will die a swift death.” Or speak to a payor and the conversation quickly turns to prevalence and value. In the setting of a single payor system, the conversation hinges less on time-to-efficacy and more on population coverage cost; a calculus of can they, the actuarial pool, truly afford it. In the US, in which coverage responsibility jumps fleetingly with each change of employment, any conversation of long-term savings/value with payors generally falls on deaf ears. Their businesses are living in the moment; what claims will we have to pay this year.
But regardless of these complexities and headwinds, we must pave new ways. Develop new systems in which the vagaries of treatment effect can be more effectively classified, if not truly quantified. Build new business models and relationships with those who seek treatment, allowing them to actively capture the data on which their benefits can be more clearly understood. This real-world data must be entirely owned by them, used per (and only with) their agreement and their participation should be economically (and attractively) rewarded.
To move toward a world in which costs (i.e. prices) are clearly understood by both the recipient (and really the buyer) and those that provide care, the real cost/price must enter into the picture. In this new landscape, deeper patient engagement becomes expected and incented. It requires an utter commitment to personal privacy; underwritten by sound policy/data security and is as focused on the long-term as it is on near-term outcomes.
We have a long and difficult way to go. Today, we see steady annual increases in Rx prices, without any commensurate proof of increased cost or utility. While global sales of branded drugs rose from $720 B to just under $800 B between 2011 and 2017, the volume of prescriptions filled concurrently drop from ~998K to 584K. Over the same time window the average of branded Rx prices increased between 6.5-14.0%. For the top 45 already approved branded drugs, annual price increases drove >60% of the 28% US sales growth between 2014-2017. Innovation is remarkably expensive, particularly in the setting of new Rx treatments. Further, it is certainly true that of every healthcare dollar spent, less than 25 cents of it is spent on drugs. But that said, when buying “stuff” as opposed to “services,” per unit prices are particularly sensitive and increasing prices well above the rate of inflation is even more so.
Just imagine a day on which informed patients, rather than hyperbolic contestants, were invited to “come on dowwwwwn” and take a seat at the table of “The Price is Right for Healthcare” – we would begin to see a new dawn. A day in which prices in healthcare are set exactly like they are in all other markets. The right price based on the value thought to be received, by those who paid. Some will be willing to pay more and others less. Some will expect brand and others will look for savings, but all will be dramatically engaged in the process. Prices will be dynamic, reflecting market-driven decisions and patients will have much more and tailored information to help support their purchasing choices. Outcomes, or least prices, will come with guarantees.
Until patients help set prices and personally determine value, all too often they will feel cheated. And the new tools on which this paradigm rests must be the responsibility of those who seek to enter this market. If one cannot provide a means by which outcomes can be assessed, by the patient themselves, then they too will soon prove to be relics – the history of medicine is filled with them. As the industry walks down the plank of year-over-year price increases, an abrupt end awaits and the waters below are not friendly. Building robust evidence platforms to validate utility (value) and ensuring consumer-driven advocacy is the only “pricing lifeboat.” We all want and will need, medical innovation, but the Price (must be) Right.
Image Source. CBS.com