Skip to main content

Say after me 'cost and price are not the same thing'

I saw this on that unique source of information, Facebook, the other day, accompanying an image of some generic paracetamol (acetaminophen):
This paracetamol is 25p but it's as low as 16p in Home Bargains. When you choose to get paracetamol for 'free' from the pharmacist or GP it actually costs the taxpayer and NHS about £10. If you want to help save the NHS choose to refuse free paracetamol when you can...
It certainly would be silly to get an over-the-counter painkiller on prescription unless you need large supplies for a chronic condition. However, what raised my 'failure to understand numbers' antennae was the bit that says 'it actually costs the taxpayer and NHS about £10'.

Now it's certainly true that the price of a prescription to the patient in the UK (unless they qualify for free ones) is £8.40. But price and cost are not the same thing. When you buy something in a shop, the price is the amount you pay - the cost is what the shopkeeper (or in this case, indirectly, the NHS) pays. In the case of paracetamol, it is going to be a fraction of the price.

Prescriptions have an unusual pricing model, in that the price to the consumer is fixed, whatever the cost to the NHS. So the cost might be 10p for those painkillers or £10,000 for some leading-edge treatment: you still pay the same £8.40, or nothing at all if you get prescriptions free.

Of course, it's a bit more complicated than that, with both bulk discounts and the cost to the NHS of dispensing a prescription (though the incremental difference of the cost of a single prescription is likely to be pretty small). However, the main thing is to remember is that just because a packet of paracetamols would be priced at £8.40 if you bought them as a prescription - making it more sensible to buy them off the shelf - and you will save the NHS some money if you buy them yourself instead of using a free prescription - this doesn't mean that your get them free costs the NHS £8.40.

Comments

Popular posts from this blog

Why I hate opera

If I'm honest, the title of this post is an exaggeration to make a point. I don't really hate opera. There are a couple of operas - notably Monteverdi's Incoranazione di Poppea and Purcell's Dido & Aeneas - that I quite like. But what I do find truly sickening is the reverence with which opera is treated, as if it were some particularly great art form. Nowhere was this more obvious than in ITV's recent gut-wrenchingly awful series Pop Star to Opera Star , where the likes of Alan Tichmarsh treated the real opera singers as if they were fragile pieces on Antiques Roadshow, and the music as if it were a gift of the gods. In my opinion - and I know not everyone agrees - opera is: Mediocre music Melodramatic plots Amateurishly hammy acting A forced and unpleasant singing style Ridiculously over-supported by public funds I won't even bother to go into any detail on the plots and the acting - this is just self-evident. But the other aspects need some ex

Is 5x3 the same as 3x5?

The Internet has gone mildly bonkers over a child in America who was marked down in a test because when asked to work out 5x3 by repeated addition he/she used 5+5+5 instead of 3+3+3+3+3. Those who support the teacher say that 5x3 means 'five lots of 3' where the complainants say that 'times' is commutative (reversible) so the distinction is meaningless as 5x3 and 3x5 are indistinguishable. It's certainly true that not all mathematical operations are commutative. I think we are all comfortable that 5-3 is not the same as 3-5.  However. This not true of multiplication (of numbers). And so if there is to be any distinction, it has to be in the use of English to interpret the 'x' sign. Unfortunately, even here there is no logical way of coming up with a definitive answer. I suspect most primary school teachers would expands 'times' as 'lots of' as mentioned above. So we get 5 x 3 as '5 lots of 3'. Unfortunately that only wor

Which idiot came up with percentage-based gradient signs

Rant warning: the contents of this post could sound like something produced by UKIP. I wish to make it clear that I do not in any way support or endorse that political party. In fact it gives me the creeps. Once upon a time, the signs for a steep hill on British roads displayed the gradient in a simple, easy-to-understand form. If the hill went up, say, one yard for every three yards forward it said '1 in 3'. Then some bureaucrat came along and decided that it would be a good idea to state the slope as a percentage. So now the sign for (say) a 1 in 10 slope says 10% (I think). That 'I think' is because the percentage-based slope is so unnatural. There are two ways we conventionally measure slopes. Either on X/Y coordiates (as in 1 in 4) or using degrees - say at a 15° angle. We don't measure them in percentages. It's easy to visualize a 1 in 3 slope, or a 30 degree angle. Much less obvious what a 33.333 recurring percent slope is. And what's a 100% slope