Pricing structure offers patients genuine choices

PUBLISHED : Saturday, 31 August, 2002, 12:00am
UPDATED : Saturday, 31 August, 2002, 12:00am

Shriram Chaubal commented on the so-called 'outrageous private hospital charges' in Hong Kong (South China Morning Post, August 26).

What most people do not realise is that the price differentiation in private hospitals between the three different classes of beds is essential to ensure people do have some real choices.

Take, for example, a surgical procedure that requires a hospital stay of one week with a total bill of $30,000 for a third-class bed. If the doctor's fee and other hospital charges remained the same and the patient was only charged the difference in the price of the bed, then the corresponding total bill for a second-class patient would only be about $32,000 and $35,000 for a first-class bed. Under these circumstances, it would be impossible to find second-class or first-class beds for those people who really wanted them.

A good analogy is the price of business- and first-class return tickets to London. Currently, the economy fare is about $10,000, $30,000 for business class and $60,000 for first class. If you calculated the 'worthiness' of an airline ticket according to the space occupied by any passenger on the plane and, for example, the quality of the food, the corresponding price of a business-class ticket should really be about $12,000 and that of a first-class ticket about $14,000. Just imagine if such a pricing structure existed. It would be extremely difficult to get a business- or first-class ticket.

I have heard many people groaning about the 'unreasonable' cost of business- and first-class tickets to London. These are people who want to travel first class, but cannot afford it. What they really want is to be able to go first class and pay just a notch over the cost of an economy ticket. If that happened, all those people who always travel first class would be up in arms, as it would be very difficult for them to do so in the future. This is a case of supply and demand.

As long as the consumer is fully aware of the price and is willing to pay for it, there should not be any complaint.