- Cost based pricing: Price = Direct costs + overhead costs + profit margin. In hospital services, this method is cumbersome because the tracking and identification of costs are difficult. Fee for services, however can be used by doctors. Notwithstanding, some hospitals in the private sector follow this method.
- Competition based pricing: using other price as an anchor for the hospitals price, heterogeneity of service across and within providers makes the approach complicated.
- Demand based pricing: Cost based pricing and competition based pricing do not consider certain criteria. Demand based pricing involves price setting consistent with customer perception of value. Prices are based on what will par for the services provided.
10 Comments