Post
by Snooze_Blues » Tue Nov 20, 2007 4:07 pm
Hi Guest, Don't forget that you didn't answer this question, either (hee-hee):
Are you currently a cpap user? Or perhaps a rep?
... and to answer your question, if I can dredge up some old economics memories, a fair price is what the buyer thinks is fair, and what the seller thinks is fair, and whatever price they agree upon between themselves.
The CPAP market seems to have a few competitive manufacturers, but most of the machines seem to get distributed through insurance mechanisms with the exception of perhaps web site sales and a few onesy-twosy brick and mortar DME stores, probably when someone doesn't know to look online or is so sleep deprived they don't think to. So I guess you could say that a "fair price" for a CPAP machine is what an insurance company says is a fair price, eh?
Normally, market pricing is relative and flexible by its nature, affected by supply and demand, competition, discretionary vs. health need, or put another way, products can have either an elastic or an inelastic demand, they can be highly fungible (like commodities), or they might be highly differentiated, like say automobiles with all the various options, at least that's what auto marketeers tell us. Meaning that people may just be willing to pay more for something that will save their lives than something that tastes good when they aren't really ever hungry. So a "fair price" for a CPAP machine may be derived quite differently than say a bag of Fritos. But I'm going a bit tangential here... so let me regroup.
If either a buyer or seller thinks a price isn't fair, no transaction occurs. Simple, huh?
Well, not really. Not when you have an insurance company in between the buyer/patient and seller, and a doctor in between the buye/patient and the seller, and a sleep lab between the doctor and the patient, and a DME between the insurance company and the patient and the doctor and the sleep lab, and you have the government (laws requiring prescriptions) between the doctor and the patient/buyer. And you thus have transactions that can occur with zero visibility into pricing to the end-user/buyer/consumer, "incentives" for dealers that may or may not appear as line items in income and expense reports, but affect the pricing of CPAP none-the-less, and all the other sort of back scratching that goes on when institutions start paying for things and "buyers" have no idea what those things cost.
A "fair price" is complicated as Hell, dude! I hope that answers your question.
But then again... I don't think you really care what a "fair price" is. It's more fun just to poke at those expressing their ideas of fair pricing, isn't it?