Pricing Strategy (General in Health

¶ … pricing strategy (general in health care)?

The approach to pricing healthcare can vary from the margin-based approaches that attempts to quantify the time and materials of professional care, the cost-plus approach which is often used in government-subsidized care, to value-based pricing which is often what private practices rely on. Of these, the most profitable and most closely aligning to the unique skills of physicians and medical professional is value-based pricing (Provines, 2010). While there are benchmarks and relative indices relative to pricing in each profession, the reliance on value-based approaches to defining treatments also serves to define a relative level of quality differentiation across suppliers as well. This price/quality relationship pervades many of the more specialized forms of treatment as the costs of the most specialized treatment programs are often highly variable in nature (Provines, 2010). The cost-plus and traditional gross margin-based approaches to pricing are often found in the treatment plans and programs that are well-defined and well-bounded by constraints of treatment programs (Clarke, 2007). Standard inoculations and preventative programs are a case in point for example. The more complex the treatment program with the greater the amount of variation, the higher the value of expertise in navigating these options in treatment, and the higher the cost of treatment itself as well (Provines, 2010). From the treatment plans that are shorter and more simplistic in structure to the complex, highly integrated treatment plans that can take months to complete, pricing must be transparent to be trusted (Clarke, 2007). Being clear with patients as to what they are paying for is critical.

Can the use of branding have unexpected negative consequences in health care?

Healthcare branding can often have unexpected negative consequences as the expectations of patients can vary significantly across the spectrum of the realistic vs. The inherently unrealistic. Managing expectations through effective use of branding is critical for any healthcare provider to be effective over the long-term (Garland, 1993). Healthcare patients' customer satisfaction is directly related to how often their expectations are met and exceeded over time. Like pricing strategies, branding must strive to be authenticity, transparency and worthy of trust for it to be successful over time (Garland, 1993). Branding must also be honest about what a given healthcare provider can deliver realistically with each treatment program over time. The ability to manage expectations and fulfill them completely and cost-effectiveness is the basis of an effective branding and execution strategy. Another aspect of branding in healthcare is how effective customer testimonials are used over time. For a healthcare brand to attain a very high level of credibility and trust, it must put the patient first and show conclusively how its focus on their success pervades all systems processes, and treatment programs. The powerful brands in healthcare have the ability to convey trust and transparency while also being instantly identifiable by the results they are delivering for patients (Garland, 1993). The focus on making patients the winners and allowing them to be the stars of the treatment programs is also what differentiates excellent branding in healthcare. Concentrating on making patients the center of the value chain is critical (Garland, 1993).

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