You have decided to set up a healthcare facility. Being a first-time healthcare entrepreneur, you are muddled about how to engineer a perfect pricing protocol for your services. Healthcare is a specialized field; it is not like a shop where a fixed price can be charged for a product.

Pricing is an X factor that can augment profits far more than increasing volumes or cutting costs can…yet its value is severely underestimated in many healthcare set-ups. Developing a pricing structure in healthcare is a challenging task as it has to reflect the value provided. If you price a particular service too below competitors’ price, your perception in the eyes of your target audience may sink and if you price it too high, then your patients may switch their loyalties.

Hence, you should have clarity and lucidity about the price range of your offerings.

Your pricing strategy will depend upon the following factors:

1. The star value

Your pricing strategy will be prominently dependent on the infrastructure of your hospital or clinic.

If your healthcare facility is designed with the ambience and the elegance of a 5-star hotel…the price will automatically be several notches higher than that of a basic facility. This is valid because luxury guarantees a premium rate even though the service provided by both facilities may be of the same level.

2. Advanced technology

In healthcare, everything depends upon accuracy and precision of the diagnosis, monitoring, and treatment. Hospitals that can boast of the most technically advanced and innovative devices, diagnostic equipment and operation technology will definitely have a cutting edge in terms of pricing in comparison to those healthcare units which are lagging behind in terms of advancement.

3. Hospital site or location

There will be a variation in price depending upon your hospital’s location. If you are based in a metro city, the price of your services will be higher than the price of the same service in a smaller town. This is because everything… from real estate, to electricity, to wages of the medical team …is costlier in a metro city.

4. Your competitors’ costing

You will have to conduct an in-depth study of the prices being quoted for the services in your segment by your competitors. You will have to then take a call based on your findings. Make an informed decision…choose a middle path…do not overprice as it will drive away your potential clients but do not under-price your services too or your breakeven point will be delayed, and you will tear a hole in your profit basket.

5. Your USPs/ core strengths

Your panel of physicians are your biggest assets. If they have certain qualifications or achievements that can give you an edge over competition, be sure to loudly proclaim it in all your marketing, branding, and advertising efforts. These core strengths will give you the justification f charging more for your services than your competitors.

6. Add-on benefits

If you are offering any additional health benefits like telemedicine, nutritional consultation, physiotherapy sessions etc. …you can charge more than your competitors for the same medical service.

To summarize, pricing is one of the key factors that can help you gain footfall and capitalize on market opportunities. A balanced pricing protocol can help you march towards success and also make your services accessible to a wide stratum of your target audience. Your pricing strategy will be dependent on a plethora of factors like market research, core strength assessment and competitor analysis. Your pricing strategy should be aimed at achieving a balance of accessibility and profitability. This may seem like a tightrope walk for a busy practitioner like you. If you need help in hospital project finance sphere, be sure to contact Hospertz consultancy, a leading hospital management consultancy firm  which has more than 2 decades of experience in the field of financial planning in healthcare and can help you formulate a pricing strategy that will be the best for both you and your patients.

Blog has been written by Dr. Vishal Jadhav, a veteran in the field of hospital consultancy with a rich experience of more than 20 years and founder of the Healthcare Consultancy Firm, Hospertz.

Dr. Vishal Jadhav, Director
hospertz@gmail.com
+91 9867712705/ 9820833149