Pricing Services in the Healthcare Market

Last week’s discussion was about developing your social venture. In order to launch your idea, you have to know if customers are even interested in your product or service. Concurrently with identifying the market you wish to target, a business plan must be establish in order to determine the feasibility of rolling out your product or service in the area. Additionally, the pricing of the product or service is an important factor as well, to capture a large customer base.

I believe that launching a social venture in the healthcare industry can be more difficult compared to other ventures because the healthcare market does not function like a normal competitive market. Supply and demand does not impact pricing of services since there is a third party payor, which are the health insurance companies. Health insurance companies and healthcare organizations are negotiating on the behalf of the patient, determining ahead of time the price of each service provided. With that being said, the prices negotiated are kept confidential where only the insurer and the provider knows the price for the services.

The article, “How to Make the Health-Care Market Work Better,” discusses how health service organizations should make their prices transparent in order to make services more efficient and be able to reduce healthcare costs. One of the solutions we would like to implement when launching the mobile health clinic would be to have our prices transparent for patients who are uninsured or have decided to opt- out of the health exchange. Pricing for preventative services can be easier to determine since there is a set standard of care, as opposed to providing emergency care, where services can vary. Pricing for a mobile healthcare clinic can be tricky, as we would need to choose a price point that is affordable to the underserved population while still maintaining a margin so that our operations can grow.

I’m wondering though, how efficient is a clinic that has two price points where one is visible and the other is not transparent?

Source: http://www.bloomberg.com/news/2013-03-28/how-to-make-the-health-care-market-work-better.html