A consumer usually knows the price of a product or commodity from the tiniest eraser to a massive purchase like a vehicle or a mansion because the MRP is printed on the packaging or is published openly in a brochure or the website.  However, in a healthcare business, pricing becomes a little obstruse and ambiguous. It is very difficult to put a price on a service that can restore your health and increase your lifespan. It is also very tough to predict upfront on how much cost will be involved in treatment or management of a condition.

This is because Healthcare, unlike any other enterprise, has a direct impact on the well-being, life expectancy and happiness of people and is governed by multiple laws and regulations. Fixing a price on repairing a person’s wellness is just not as easy as fixing a price on fixing a gadget. You have to set a pricing structure in such a way that you can make your hospital’s services accessible to a vast multitude of patients and at the same time ensure that your benchmark of quality is maintained.

In today’s times of cut- throat competition and web-savvy consumers who can compare services of different hospitals with a click, you have to be cautious that your pricing is not too high or you will lose consumers to your competitors. You have to also ensure that your pricing is not too low as this can cause you losses in revenue and also reduction in perceived value.

Thus, developing a pricing protocol that is just right is like walking across a tightrope. If you price your healthcare services too high, then you will drive away your potential patients and if you price them too low, then your profits and brand perception will go down.

4 pitfalls to avoid in setting a price menu of your hospital’s services

1. See that your pricing matches your hospital’s infrastructure

 Setting a pricing framework without giving any consideration to your hospital’s infrastructure and ambience can make you incur losses. Your hospital’s infrastructure is the deciding factor in setting a pricing framework. If your healthcare unit provides 5-star luxuries, it will be expected that you charge a premium. Your prices can be higher than those of ordinary hospitals that have simpler set-ups even if the services provided by both are of the same degree of efficiency.

If you have the latest medical equipment and use the most modern technology, you are justified to charge higher that hospitals that use less advanced equipment.

2. Your teams of experts

If you do not take the expertise of your team into consideration, your pricing strategy is likely to go wrong. Patients place a great value on the reputation of their doctors. If your panel of specialists have cutting edge qualifications and have pioneered any technology, you can charge a premium. There are many accreditations and certifications that

can give your healthcare facility an edge over competition. If you have any of these in your kitty, be sure to advertise them and keep your prices higher than your competitors.

3. Your hospital’s location

With real estate prices skyrocketing, avoid the pitfall of developing a pricing protocol that remains the same all over the country. There is a varied difference in pricing across urban and rural India and there is a huge difference between the pricing in cities too depending upon whether they are tier 1, 2 or 3. Take careful cognizance of all these variations or you will end up in an abyss of losses.

4. Pricing way above or below competitors’ prices

Patients always look for the best value for money. A healthcare facility has to maintain a competitive pricing protocol to garner profits and stay viable but at the same time, prices should not be inexplicably high or patients will run off to competitors who offer the same services at a better price. Ensure that your team does a careful research of your competitors’ pricing strategies before setting up your pricing protocol.

Your hospital’s success depends invariably on your ability to plan, construct, develop and implement a comprehensive strategic pricing protocol. Since this is a twisting path lined with too many pitfalls, it is better that you rely on the expertise of a Healthcare consultancy firm to design and curate your pricing strategy. If you need any assistance in this endeavor, consult Hospertz, a reputable healthcare consultancy firm of India with more than 2 decades of experience in pricing of healthcare services.