Assistive technology pricing in Australia: is it efficient and equitable?Michael P. Summers A and George Verikios B C D
A Centre for Health Communication and Participation, Australian Institute for Primary Care and Ageing, La Trobe University, Bundoora, Vic. 3086, Australia. Email: email@example.com
B KPMG Economics, 71 Eagle Street, Brisbane, QLD 4000, Australia.
C Department of Accounting, Finance and Economics, Griffith University, 170 Kessels Road, Nathan, QLD 4111, Australia.
D Corresponding author. Email: firstname.lastname@example.org
Australian Health Review - https://doi.org/10.1071/AH16042
Submitted: 23 February 2016 Accepted: 9 December 2016 Published online: 6 February 2017
Objective To examine available systematically collected evidence regarding prices for assistive technology (AT; e.g. disability aids and equipment) in Australia with other comparable countries. Issues of appropriate AT pricing are coming to the fore as a consequence of efforts to move to consumer-centric purchasing decisions with the National Disability Insurance Scheme (NDIS) and also in the recent aged care reforms.
Methods We identified and present three sets of AT price comparisons. Two comparisons were based solely on the lowest prices advertised on the internet, and one comparison examined recommended retail prices. Variables essential to ensuring accurate comparisons, as well as significant supply-chain issues were also examined and considered in the analyses.
Results The first internet-only price comparison found that overall AT prices were 38% higher in Australia compared to other countries, but did not factor in shipping and other related costs that are essential to include given that most AT is imported. The second internet-only price comparison found that overall Australian prices were 24% lower when shipping and related costs were included. The recommended retail price comparisons found that Australian prices were between 14% and 27% lower. Prices for internet-only retailers (those with no bricks-and-mortar presence) are consistently lower for all products than those sold by retailers with actual shop-fronts. Further, there is no evidence of suppliers earning supranormal profits in Australia.
Conclusions The results indicate that AT prices in Australia are efficient and equitable, with no significant indicators of market failure which would require government intervention. Efforts to reduce prices through the excessive use of large-scale government procurement programs are likely to reduce diversity and innovation in AT and raise AT prices over time. Open markets and competition with centralised tracking of purchases and providers to minimise possible over-servicing/over-charging align well with the original intention of the NDIS, and are likely to yield the best outcomes for consumers at the lowest costs.
What is known about the topic? Government-funded programs are used extensively to purchase AT because it is a primary enabler for people of all ages with disabilities. Perceptions of unreasonably high prices for AT in Australia are resulting in the widespread adoption of bulk purchasing and related strategies by governments.
What does this paper add? Carefully undertaken systematic price comparisons between Australia and comparable Organization For Economic Cooperation and Development countries indicate that, on average, Australian prices are lower than elsewhere when delivery to Australia is taken into account. It was also found that prices at brick-and-mortar shops, with all the services they provide to ensure the appropriateness of the products provided to meet the consumers’ needs and goals, are substantially higher than Internet purchases in which the consumer bears all the risks and responsibilities for outcomes.
What are the implications? Overuse of government bulk purchasing and similar arrangements will lead to less diversity in the available AT products, related services and retail outlets, resulting in less choice for consumers and higher risks of poor outcomes through less focus on matching consumers with the ‘right’ products for their needs and goals, and ultimately higher AT prices over time as competition is reduced to a few major suppliers.
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