Though healthcare is often considered a recession-proof industry, the cost of healthcare is never far from patientsÃ¯Â¿Â½ minds in trying financial times.
Though healthcare is often considered a recession-proof industry, the cost of healthcare is never far from patients’ minds in trying financial times. Taking this into consideration, psychologists Ivo Vlaev and Nick Chater, and neuroscientists Ben Seymour and Raymond J. Dolan, from the University College London, set out to learn just how much money their volunteers would be willing to pay to avoid pain and discomfort.
In the study, volunteers were “given money, with the understanding that they could keep for themselves whatever cash remained. They experienced one pulse of electric shock and then had to indicate how much money they would pay in order to avoid receiving 15 more shocks of the same intensity.”
After responding, a computer program randomly selected a dollar amount that would be the amount participants would actually have to pay to avoid the extra shocks. The participants were aware that the computer generated dollar amount would be completely random. Nevertheless, if the “amount was higher than what the participants were willing to pay, then the participants would be shocked. However, if the computer's price was lower than the participant's price, then they would pay the computer's price and avoid the pain.” With each patient this process was repeated several times at differing shock intensities.
Published in Psychological Science, the journal of the Association for Psychological Science, the study found that “demand for pain relief is almost completely dependent on pain experienced in the recent past and the available cash on hand. That is, the participants were willing to pay more money to avoid pain if that pain was more intense compared to previous trials. In addition, the price they were willing to pay was based on what they were given (money-in-the-pocket) rather than on their overall wealth.”
Given that $60 billion is spent on painkillers each year worldwide, the authors believe their findings have “substantial economic implications,” concluding that the “value we place on relief from suffering is flexible and that activity of health markets cannot be predicted by the behavior of individuals,” since it appears that reaction to pain is a relative judgment.