How to set a Pricing Protocol for your Hospital services

One of the most important aspects of providing excellence in healthcare to your patients is devising a robust pricing protocol which will make your healthcare services accessible to a multitude of patients without any compromises on quality or profitability. We live in an era of cut- throat competition and the consumers are aware and well-informed and are always in the quest of getting the best value for money.

Developing a pricing structure is always like a walk through a minefield because if you price your healthcare services too high, then you will drive your patients to other hospitals and if you price them too low, then your perceived value will go down.

Hence, it is essential to have a clear estimate of the price range you want to set. Using a reputed health consultancy firm to conduct an effective price-benefit analysis can be beneficial during the preliminary stages in order before you zero in on the right pricing structure which can help you capitalize on market opportunities.

There are several factors which you as a healthcare professional will have to consider before formulating your pricing strategy.

1. Your Infrastructure

Your pricing strategy will depend to a very great extent on the in-built infrastructure that you have. The components of this infrastructure can be compartmentalized into

• The ambience of your setting

Some hospitals are designed to provide 5-star comfort. The healthcare services in such set-ups will definitely be more than those of simpler establishments even though the service provided by both may be at par.

• Your medical equipment

Healthcare set-ups that have the latest, the most innovative and the most advanced medical equipment and diagnostic machines will definitely charge more for a procedure as compared to those that are less advanced.

2. Your Location

There is a wide gradient in pricing across urban and rural India and there is a vast difference between the pricing in cities too depending upon whether they are tier 1, 2 or 3. If your healthcare facility is based in a Metro city like Delhi or Mumbai, your services will definitely be priced high because of the high real estate costs and other related costs. In rural areas, where the willingness to invest in healthcare and the spending capacity is less, healthcare services have to be accordingly priced lower.

3. Your expertise

The degree of expertise of your panel of doctors can have a big role to play in deciding your pricing protocol.  There are many accreditations and certifications that can give your healthcare facility an edge over competition. If you have these, you can price your healthcare services at a higher level than your competitors.

4. Your competitors’ pricing

To retain a healthy profit margin, a healthcare facility has to maintain a particular pricing structure and at the same time, it cannot hike up the price too much otherwise it will lose patients to competitors who offer the same services at a lesser price. But remember, a competitive pricing does not necessarily mean a race to the bottom…so do not underquote your rates without a complete and comprehensive research of your competitors’ pricing.

5. Premium services offered

If your healthcare facility is offering any premium benefits in addition to the service, there is opportunity to price the service at a higher level. For example, if your healthcare set-up is offering allied services like counselling, post-op consultation, nutrition guidance and lifestyle management; your pricing should be at a higher stratum.

Certain parameters that can be incorporated in your pricing protocol to improve patient experience :

1. Flexible payment option
2. Price transparency: The pricing of your healthcare practice should be transparent and easily communicable to your patients, thereby building trust and long-term relationships.
3. Price elasticity: Responding to the fluctuations in the pricing of the market is called as price elasticity. As a healthcare pioneer, your healthcare set-up pricing structure should have the provision to be fluid and elastic in nature.

To put in a nutshell, your healthcare organization’s success in a consumer-centric environment depends to a very large extent on your efficiency to develop and implement a strategic pricing strategy. Since this is a complicated process which requires deep insights into several factors like market, product service and competitor analysis, it is better that you avail of the expertise of a Healthcare consultancy firm to formulate your pricing strategy.

Hospertz consultancy has more than 2 decades of experience in the field of pricing of healthcare services and can give you necessary assistance in this regard.