Pricing Structure Method to Support Financial Structure Strategies  MHA FPX 5006 Assessment 2 Attempt 2 Revenue and Reimbursement

Pricing Structure Method to Support Financial Structure Strategies 

Pricing strategies provide vital signal to healthcare organization leaders to determine their right resources for an accurate delivery of services. Health care industry is not a classic marketplace for goods and services. Customers are often referred to as “health insurers” or purchasers who possess lesser information that makes them less sensitive to prices (Sousa et al., 2019). Provider payment systems are based on specific payment methods and supporting mechanisms. The price shows that the cost of delivering services is covered and it also offers vital incentives to medical centers and hospitals. For instance, our hospital serves a number of low-income patients to ensure coverage and quality. The prices are often adjusted to achieve the set objectives of this healthcare organization.  In the US, the prices are determined though the method of individual negotiations. This means that the prices are agreed upon through negotiations between patients who pay and the healthcare insurers. The price negotiations are also popular in the United States due to recent pressures to increasing consumer sensitivity to prices (Senthilkumar et al., 2018). This means that the providers and the customers will have higher bargaining powers. Therefore, in such type of a system, under such a system, the healthcare organization agrees to accept lower rates from the insurer to meet the goals of hospital to improve their revenues and facilitate pateints. This helps to build good reputation and there is a price discrimination factor that is discussed in the next section. Moreover, administrative costs are also increasing due to health insurance marketing expenses and billing tasks. This is indeed a drawback to the organization in terms of promoting welfare. Therefore, it is vital to understand that in the US, private insurers use Medicare rates for individual price negotiations. This shows that government-bases Medicare system has greater impact or an influence over the prices paid by the private insurers. In our organization, prices are negotiated individually for various healthcare services provided to the patients.  In terms of selecting a pricing system, the healthcare organization can select the system in which the organization agrees to accept lower rates from the insurer to meet the goals of hospital to improve their revenues and facilitate pateints. This is because the other pricing systems focus less on the needs of hospital and the costs associated with the functions. This system ensures that the hospital will help the patients with affordable price structures and they will benefit the most from the insurance companies while giving the organization a chance to gain maximum profits. 

Factors to Consider for Insurance Contract Negotiations

In the US, the pricing system is different than Australia where practitioners are paid by fee-for-service based on Medicare benefits. This means that our organization does not provide rebates to the patients. In the US system, Medicare severity diagnosis related groups are observed and we create a list of those groups of patients suffering from diabetes or other similar diseases. This shows that each patient has a relative weight which helps to reflect their overall expected cost of interventions (Osoro, n.d). For instance, renegotiating contracts are vital according to circumstances.The following factors are vital to consider: 

1. Scarcity of healthcare services should be taken advantage of that allows insurance organizations to work with us. 
2. We have specialty value in providing mental healthcare services and PSTD and hypertension psychotherapy services that distinguishes us from others in the same area. This way, insurance organizations can make more money from our specialists’ skills. 
3. We must also care for the direction of insurance companies and knowing their interests are vital. This means that if the insurance organizations are pursuing other practices, they may use our reference to build a mutually beneficial contract. 
4. Moreover, if the negotiations are not going to work well or have risks, then our management must decide when to take the South route and discontinue in the long-run by hiring experienced attorneys (Mohamed, 2021). 

This means that the insurance businesses are complex and there are social factors which must be considered. Since most patients avail insurance benefits out of feat that they may lost their money on healthcare, insurance providers must also show genuine interest in the needs of patients. The client would rather like to be safe than risking financial resources earned in limited amount. Insurance benefits should be explained to the customers to make them visible and dynamic because many people