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Four Areas Your Yearly Pricing Review Might Be Missing

 |  By Brian Workinger  
   April 27, 2017

Hospitals and health systems face a number of important decisions when determining how to price services and delivery of care. Your ability to regularly review and align your pricing strategy has become even more significant in the face of mergers and acquisitions, software conversions, and healthcare consumers responsible for increasing deductibles. Incorrectly set prices can have a profoundly negative impact on patient loyalty and satisfaction. Embracing and investing in a defensible pricing strategy to contain costs requires a review of these top four areas to help reduce the risks associated with erratic and inconsistent approaches to pricing.

1) Pharmacy and Medical Supplies

Although the cost of pharmacy and supplies has exploded, assessing pharmacy and supplies markup is usually not a part of the standard outsourced pricing analysis that most hospitals engage in once every fiscal year. Often, years of consistent across-the-board increases in these areas have usually resulted in drugs and supplies with extremely high prices, and those prices are out-of-sync with both cost and competing hospitals.

Assessing your formulary and medical supply markup as part of your pricing engagement hasn’t historically been the norm because of the assumption that all systems will successfully adhere to the established formulary or markup policies. However, in practice we know that many issues can prevent adherance, and adherance can be difficult for teams to efficiently audit. New technology platforms mean that your pricing vendors and consultants should be able to closely analyze pharmacy and medical supply pricing to ensure accurate adherence to policies and defensible prices. With 10 - 20% of your patient revenue coming from pharmacy and supplies, the incorporation of these areas can vastly improve the defensibily and financial welfare of an organization.

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Director Customer Engagement, Craneware


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