Medical advice-seeking behaviors based on transaction cost theory

Background Given the global trend of aging societies, medical expenditure has hit record highs in many countries. Because medical advice-seeking behaviors can affect the health of whole societies, how members of a society make medical-related decisions with limited available resources is worthy of investigation. Although transaction cost theory has been extensively applied in commercial research, it is yet to be applied in studies on medical advice-seeking behaviors. Method and results This study conducted in-depth interviews with 15 participants and verified that transaction cost theory is applicable for analyzing people’s medical advice-seeking behaviors. Conclusion This study verified that transaction cost theory influenced the participants’ choices of physicians and treatment methods, which implies that improved transparency of medical information could considerably reduce transaction costs in relation to medical behaviors and enhance people’s well-being.


Background
Population aging is an international phenomenon revealing a steadily increasing life expectancy among geriatric people. With the most rapidly aging society worldwide, Taiwan is poised to become an aged society. According to statistics from the Executive Yuan, the aged population in Taiwan will reach 4.75 million by 2025, denoting that one in every five citizens will be over 65 years of age. The status of Taiwan's society as aging is aggravated by the increasing occurrence of chronic diseases among the geriatric population. Shortages of medical resources have prevented large numbers of older adults with chronic diseases from receiving proper medical attention and treatment, thereby leading to numerous acute complications and consequential medical consumption behaviors, which have caused not only considerable consumption of scarce medical resources but also a decline in medical care quality that has induced numerous problems [6].
The idea and importance of transaction costs was initially described by Ronald Coase in 1937. In 1975, Oliver E. Williamson developed a comprehensive framework for transaction cost theory based on Coase and related literature. Transaction cost theory is a principal theory for management and organization studies [4].
Medical advice-seeking behaviors can influence the prognosis of a disease, medical expenses, and equity in access to medical resources. "Transactions" involving medical services constitute critical decisions many people must make in their lives. Decisions or "transactions" involving choices of food, clothing, education, and jobs broadly and deeply influence human lives.
Although most related studies have concentrated on medical advice-seeking behaviors in relation to various diseases or variations in medical advice-seeking behaviors between different societal groups, the present study, used the transaction cost theory to deconstruct medical advice-seeking behaviors from the standpoint of the users (Tables 1, 2).

Literature review
Transaction cost theory was introduced by Ronald Coase, a professor at the University of Chicago, in The Nature of the Firm published in 1937. Coase questioned the validity of zero transaction cost as described by conventional

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Cost Effectiveness and Resource Allocation economic theories and asserted that in the process of a transaction, uncertainty in the environment and the limited rationality of human beings might incur additional costs for the parties involved. Coase termed these costs "transaction costs. " Coase believed that transaction costs referred to the following three types of cost: (1) search cost: the cost of search for required goods; (2) bargaining cost: the cost of negotiating and reaching an agreement; and (3) enforcement cost: the cost of executing a contract and supervising its execution after the transaction has been validated [1]. In 1975, Williamson developed and expanded Coase's views to promote better awareness of transaction cost theory among economists. He proposed that failure to complete a transaction usually stems from market failure caused by human and environmental factors, which cause difficulties in market transactions and increase transaction costs. The human factors highlighted by Williamson included the bounded rationality and opportunism of human beings, whereas the environmental factors included uncertainty, complexity, and small transaction volumes. In addition to these factors, information asymmetry and the atmosphere were recognized as factors that could increase transaction costs. In 1985, Williamson further proposed that the suppositions of asset specificity and the frequency and uncertainty of transactions could cause organizational failures and increased transaction costs. Therefore, transaction costs were defined as the costs incurred from the transaction process in addition to that agreed by the parties involved. Such costs include those incurred from information searching, negotiating, drafting, maladaption, haggling, setup and running, and bonding [10].

Participants
In the present study, interviews were conducted in October and November 2016 with 15 Taipei-based students all from different regions in Taiwan and various social and economic backgrounds.

Research method
In-depth interviews were conducted to ensure data completeness and accuracy. Before each interview, the participant was asked to provide consent for notes and an audio recording of the interview to be taken. Upon completion of each interview, the audio recording was transcribed verbatim for further analysis. After each interview had been transcribed in full, the interviewers compiled a memorandum detailing their observations regarding the body language, mood, and speech of the participant as a reference for follow-up research. In addition, to improve precision and for greater reliability and validity, the research team followed the principle of triangulation tests by using multiple sources for evidence, asking the interviewer to examine the transcript, and establishing construct validity [11].

Transaction costs: negotiation costs
Liao [7] proposed that asymmetry in market information coupled with limited rationality and parties engaging in transactions are often unrelated, can foster distrust between the parties that necessitates negotiation, and costs both parties more time, energy, and money. These are negotiation costs.

Data collection and analysis
The research team composed interview guidelines based on the research objectives and conferred with other researchers about the content corresponding to the researchquestions, which were subsequently used as bases for the interview questions. The qualitative interview relied on the data analysis helix in Creswell et al. [2] to process and analyze the collected data. Data processing in the present study consisted of the following five steps: data management, reading and recording, description, classification, and interpretation. Each interview transcript was processed through data encoding and data classification to determine the research proposition. Data encoding was conducted in one of the following two manners: 1. Based on the interviewed participant and location revealed in the transcript; or 2. Based on the research objectives and constructs determined through the literature review.

Transaction costs: search and information costs
Fan [5] emphasized that in real life, information is usually incomplete and there are costs for complete information. Therefore, "incomplete information" and "search and information costs" are causally related. In transactions and negotiations, all parties attempt to maximize their profits by gaining sufficient information, which costs considerable time, energy, and money, or in other words, transaction costs. Solomon [9] suggested that consumers facing consumption-related problems require assistance from related information for the decision-making process and the search for such information could be referred to as search costs.

Transaction costs: contract execution costs
After a contract has been agreed upon, both parties must verify whether the other has fulfilled theterms of the contract, and in the event of noncompliance, enforce the terms. The costs that ensure the execution of a contract are contract execution costs. Upon completion of a contract, both parties may choose to renew their transaction or one may choose to relinquish their part of the agreement to another partner, in which case, the costs incurred are switching costs [3].

Discussion
The interview transcripts indicate that there is a tight relationship between transaction cost theory and medical-seeking behavior. Although, the public has only a weak conception of transaction costs. The transcripts, traces of understanding of transaction costs can be detected in relation to medical advice-seeking behaviors. Most of the discernable elements corroborate the findings of Dahlman [3], including search and information costs, negotiation costs, policing costs, and contract execution costs.

Transaction assets
In addition to transaction costs, another factor tentatively referred to as transaction assets has been mentioned repeatedly. This factor may be accumulated at the expense of multiple costs and may facilitate the reduction of future costs. The possession of transaction assets can effectively reduce transaction costs and such assets may be the result of trust, habits, and connections. Experienced people tend to rely on such assets to effectively reduce transaction costs, or in other words, obtain access to equal or preferential medical treatment; for example, some participants stated that they need not spend much time searching for clinics when at home because they are already acquainted with local physicians. However, after leaving home for further education or work, people must spend more time or use connections to build up trust. Therefore, transaction assets can be understood as reducing search and information costs, negotiation costs, policing costs, and contract execution costs.

Minor and serious illnesses
Generally, when faced with familiar symptoms, people tend to seek medical advice from medical institutions that incur lower transaction costs such as those that are closer to home, charge less, or do not have long waiting times. By contrast, when faced with unfamiliar symptoms, people feel inclined to incur higher search and information and negotiation costs to prevent the illness from developing beyond their control, thereby ultimately incurring higher policing and contract execution costs.

Conclusions and suggestions
The present study employed transaction cost theory to analyze considerations in medical advice-seeking behaviors from the perspective of patients. The following conclusions were drawn from the in-depth interviews: transaction costs play a critical role in the selection and decision-making processes inherent in medical adviceseeking behaviors. Although search and information costs may initially appear substantial, the acquisition of accurate information can considerably reduce follow-up transportation times, transportation fees, policing costs, and contract execution costs for failed treatment. After discovering the relationship between medicalseeking behavior and transaction cost theory, we can understand the concern and the logic of patient when seeking medical treatment. This understanding can serve as the foundation for the healthcare provider and government when caring patient and the public. For example, the government can implicate family medicine policy, and by having a trustworthy physician close to patient's house, mean to help the patient to acquire a transaction asset that reduces future transaction cost.