Designing the future of healthcare pricing.

HEALTHCARE

There are many challenges impacting the healthcare industry today. An unprecedented shift from payment models based on volume to those centred on outcomes. The impact of this pricing transformation – combined with ageing populations, soaring costs, AI, data analytics, better medical technology, growing consolidation among payers and providers, increasing coordination of care, deepening public-private partnerships, and global healthcare reform efforts – is challenging prior assumptions, mindsets, and strategies throughout the industry.

These disruptions pose complex threats to the healthcare industry – but they also present valuable pricing opportunities for organisations that are able to pinpoint where they can redefine their value and deliver the greatest impact with latest pricing strategy and analytics. The success of these strategies pivots on price execution - and 90 percent of execution hinges on having the right organisational structures and talent management in place.

KEY PRICING ISSUES

The focus is on:

HEALTHCARE

There is growing consensus that transitioning to outcomes-based payment is fundamental to driving cost-reducing innovation among healthcare providers and achieving a financially sustainable healthcare system. The challenge is how to ensure that implementation succeeds. Latest research indicates that there are eight fundamental requirements that payors must meet as they transition to outcomes-based payment, starting with a redefinition of what they expect from 21st-century care providers and implementation at a scale large enough (in terms of money at stake, support given, breadth of providers involved, etc.) to achieve impact. Our research indicates that payors should migrate away from cost-plus pricing constructs that seek to optimise a provider’s operating margin. Cost-plus pricing discourages cost-reducing innovations, especially among the more standardised services.