Solving asymmetric information in education and health care sector.

Different actors posses various information in education and health care sector which is not shared effectively. There is a need to push the information asymmetry in the direction towards perfect information. This information asymmetry severely gives incentive to the education, health care sector and reduces the consumer surplus. The signaling of the producer takes place via internet, news paper etc. and there is no system to verify whether the signals are accurate.

For example, If you want to join a music school, language class, computer class, dance etc., there is no information available to the customer about the services except the investigation by word of mouth. The producers of the service advertise effectively via website and Google ads. If the contacts of the person joining the course is reduced, then he is disabled with the information further and leaving him with no choice. It is also applicable to the university ranking since majority of the ranking agents produce ranks for the university and not significantly for the course. And moreover the ranking is not debatable for the public, I.e., there is no ranking or reviewing options available for the public to challenge.

This is also similar in terms of health care sector. In the developing countries, hospital exploits the insurance scheme given by  private/ Public to create the wealth out of the schemes. This severely hampers the growth in health care policy in the developing country. Also the service of the hospital and general practitioners were not measured due to the inability of the system. And it takes a considerable amount of time for the person to bring the actors into the limelight for giving poor service.

For solving the asymmetric information in education and health care sector, I thought of a business model which I would like to share in this blog. First of accumulation of data around the country is necessary in education and health care sector. In education, data of course provider by individual, private company and university should be accumulated and in terms of health care, data of hospitals, general individual practitioners, insurance company etc. should be accumulated. Then the data website should be converted into free access, free content site similar to Wikipedia. The rating and review for the above data should be added for the education and health care sector.

For example, the student can freely give the comment and review on his graduate studies in the university by choosing the anonymous name. He can add the list of courses he is studying for his Bachelor/ Masters course and also he can add the list of books he is using for the particular course. In this way information can be liberalized. Similar can be done in health care sector. In this way we can enhance the education and health care sector.

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2 thoughts on “Solving asymmetric information in education and health care sector.

  1. Dear Deepak,
    I found your article on asymmetric information on health care and education section is indeed worth commendable. In my own experience, I have found that the data on the education sector has and can be made more surreal in order to support a better methodical approach through continuous feedback in anonymity. However, it has also been found, that, certain feedback has actually misled many true aspirants in search for better available education or health care likewise. In addition to that, it has also been discovered that certain feedback had been delivered in order to malign or misguide the future students for their benefits unknown. Though, both international and domestic state wise ranking has been preferred as one of the best options in order to differentiate the status the colleges hold, but, however, different perceptions in addition to monetary pressure for personal gain has also later found to question the basis of such ranking system.
    Bottom-line: Too many data with very little relevance or potential to deliver the facts.

    Many Universities, on the other hand, have also laid their hands to push towards MOOC (Massive Online Open Courses) (E.g.s being Coursera, Khan Academy). These websites offer various courses on divergent streams from mathematics to science to economics to music and poetry. They have not only started the course similar to the courses delivered to the students in colleges but also institute degrees of various levels which they claim shall be helpful for their current and future endeavors. There’s also a speculation where certain websites also foresee to offer college level MBA courses on different streams equivalent to the ones taught in the classes in exchange for a fee much cheaper to the actual college driven courses. However, this new system, is being widely opposed, on the basis, that, these courses can never compete with the real life goals and strategies the colleges prepare the students for. But then, it is also widely believed that their CONTROL on education system will get marred and hence provide with wrong feedback leading to irregular rankings.

    Conclusion: Data and statistics is one such tool which can not only be manipulated by forces unknown but it can also be used as a Marketing Weapon against rivals new and old. For the aspect of the student, He or she would not only have to rely on the feedback of the peer but also would have to focus on a research on their own in order to find out the best possible answer to the quest they are treading upon. The fresh students would have to be ready and fierce, in order to, catch upon its Prey (Best Available College) and Devour (Knowledge and Skills) during the tenure in order to turn out to be the cream of the block or at least Die(Not Literally) trying to be one. In the end, whatever be the result, that student shall shine.

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