Price and consumer cost responsibility effects on quality perceptions and price negotiation likelihood for healthcare services.

This paper presents the results of an experimental study that assessed potential differences in consumer quality perceptions and price negotiation likelihood for three healthcare procedures: a routine physical, rhinoplasty, and a root canal, based on varying levels of price and consumer cost responsibility. Results of this study did not support a general positive price-perceived quality relationship for any of the three procedures. However, several significant effects were observed for price negotiation likelihood. First, price negotiation likelihood was found to be higher for more expensive services (i.e., rhinoplasty) than less expensive services (i.e., routine physical). In addition, consumers were more likely to negotiate price when they were both responsible for the entire cost of an expensive procedure and not accustomed to paying the full cost. Lastly, people who likely perceived a relationship between price and quality were less likely to negotiate pricing at high price levels vis-à-vis low price levels.