Final Blog Post (Updated)

A pricing analysis was done on three local dental markets.  Two cities (Nogales & Hermosillo) are in the state of Sonora, Mexico, which is the state that borders Arizona just to the South.  The 3rd city city was Tucson, whose pricing can be seen as representative of the entire U.S. dental care market. The analysis was based on data that I collected for all 3 markets concerning five different dental procedures:  titanium implant, laser whitening, a root canal, a crown, and a veneer.

I first wanted to physically see that the dental clinics in Mexico would meet the standards of most U.S. citizens.  I found 8 different dental clinics that seemed to fit U.S. customer standards in each of Nogales and Hermosillo.  Nogales pricing ranged at a 40 - 60% average discount from Tucson.  Hermosillo resulted in a 60 - 90% savings.  For example, 1 veneer in Tucson cost, on average, $1196, where in Hermosillo it only cost $136.  Such a difference can be explained by the custom lab work done for veneers custom work and very labor intensive.  The manufacturing wage is $22/hr in U.S. vs. $2/hr in Mexico; 90% lower.  Below, is shown the average prices for the five different procedures in the three different markets.  The further south you go, the lower the pricing (and the nicer the beaches!). 

 



As there were only 8 clinics, an ANOVA test was done for every procedure testing between the three different markets in order to check for robustness.  A non-parametric test would have been a better choice for tests but the p-values from the ANOVA test tells us the results would not have been any different.   An ANOVA test for every procedure showed results similar to the one below for the root canal: 

 



A p-value of .00057 basically says there is a 99.95% chance that the prices are different in all 3 markets.  Again, the significance of price differences was met for the other 4 procedures as well.   

The last part of the project explores some survey data that I had collected and Iwanted to know at what point and what price would U.S. participants be willing to go to Mexico for dental work.  There was an unbiased survey and a biased survey.  These surveys were given to local Tucson residents and I wanted to see if they would venture to Mexico for dental care.   

98 respondents were essentially asked, "at what savings amount would at least have to be met for you go to Nogales for a $3,000 job in Tucson?"  I also asked, "At what saving amount would at least have to be met for you go to Hermosillo?".  I asked the same questions for an $8,000 job done in Tucson.  The results are shown below and illustrate that as the dollar amount of the job increases, the participation in going to Mexico increases.  A higher savings amount would likely be the impetus.  The participation rate was surprisingly high.  However, when you quantify the savings it would seem to be counter-intuitive to not participate.

 




l also compared those unbiased survey results with the results of a biased survey that I gave.  I wanted to know if the wording in the biased survey changed the participants willingness to go to Mexico for dental care? 

The words “risk”, "foreign", "unknown", "trained in Mexico" were added to see if it made a difference if participation and the required savings amount to venture to Mexico for dental work.  The results show such a biased survey did make a difference as participation dropped from 86% to 54% for an $8,000 job.

 



In summary, drastic prices difference between the 3 markets are real.  And the prices in Mexico can easily meet the savings needed for respondents who are willing to go.  This would suggest that the 3^rd objective of IHI’s Triple Aim, ie. to lower per capita costs might be achieved because of this.  Also, local Arizonans who might not have been able to have necessary dental work done in the U.S. because of costs, might now be able to get such work done in Mexico which might help the meet the 2^nd objective of Triple Aim which is improving the health of a population.