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Strategic Initiative: Strategic Pricing And Transparency

1214 Words5 Pages

Strategic Initiative – Strategic Pricing and Transparency
The financial burden for healthcare is continuing to shift to employers and patients. In the past patients were only responsible for their copay and their insurance premiums were relatively low. However, many patients now have high deductible health plans or health savings accounts. As healthcare costs rise employers are passing the costs onto their employees. Patients who are responsible for more of their own healthcare costs out of pocket are now demanding to know the prices of services up front. For non-emergent care patients are now comparison shopping for health care services and it is creating a need for strategic pricing and transparency at Mercy and other healthcare providers. …show more content…

Many of these tests are likely to be impacted by future site neutral payment changes. Currently Medicare pays differently for outpatient procedures and tests based on the site of service (Dyrda, 2017). For instance, Medicare would pay a significantly higher amount for an MRI performed in a hospital as opposed to a physician’s office. The rationale behind the different payment structures initially was that there is much more overhead cost to cover at a hospital. The government and CMS have started making changes to eliminate the disparity between sites of service and it is projected that payments will be made in the near future on a site-neutral basis, or everyone will be paid the outpatient rate and there will be no more higher hospital …show more content…

Mercy has good quality and is a low-cost provider, yet has historically had lower market share than its competitors. To be successful in the changing healthcare landscape it will need to analyze its programs and services and implement market protection and growth initiatives. Mercy can add a level of differentiation to the services that it offers to persuade patients to choose it instead of its competitors (Moseley III, 2009). Mercy can also be successful through a thorough analysis of pricing and costs and a low-cost leadership strategy. Consumers are demanding transparency in pricing and desire the ability to comparison shop for healthcare. Mercy should proactively address the demands of patients and coupled with its pricing strategy incent more patients to choose it over its

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