Assignment 2: Pricing Strategies In The Healthcare Industry

Decent Essays
HCA312: Health Care Finance Instructor: Ken Feifer Week: (2) Discussion: (1) Topic: Pricing Services The text describes four traditional payments received by healthcare organizations as charges, negotiated amounts, negotiated fee discounts, and retrospective cost” (Smith,2014). Insurance companies and physicians negotiate the prices, once charges are settled, the healthcare organization creates a fee schedule aligned with the charges agreed upon during the negotiation process by the providers' representative and the insurance company. Fee screens are similar to the fee schedule however they are different in some ways. Fee screens restrict payment increases; additionally, the contract usually last for one year and revisited after that…show more content…
Proper healthcare prices enable an organization to remain competitive in the market as well as provide a provided a sturdy financial foundation for the organization. Prices that are too low or too high can result in an organization losing business or unfortunately closing the business. Pricing should be conducent where the company can cover expenses, make a profit, and reinvest for other business related expenditures. In the journaled article “The Price Is Right, by Karen Corrigan it describes the lack of marketing strategies within the healthcare industry. The report suggests the importance of pricing within the healthcare industry and inclusion of marketing pricing strategies. Pricing strategies included regulated reimbursements, negotiated contracts in which I discussed earlier, and focusing on value pricing. “Value pricing will be a critical marketing skill for healthcare organizations in the new consumer-choice market. The switch to higher deductibles, tiered benefits, an individual’s health fund management through health savings account (HAS) represents consumers have more incentives to shop price as part of the overall purchasing decision process” (Corrigan, 2006). A healthcare organization that provides a variety of services along with well-adjusted pricing options guarantees the business will generate
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