EXHIBIT 13.8 Example Cash payments, Risk for Provider ntegrion None beyond Struc

Question

EXHIBIT 13.8 Example Cash payments, Risk for Provider ntegrion None beyond Structures for1. Fee-for- Healthcare service/ Contractscharges Traditional catastrophic and traditional health insurance normal business physician-HCO relationship 2. Negotiated PPO contracts, Normal business Traditional fees and some traditional insurance contracts risks, plus constraints imposed by contract limits 3. Fees for Medicare DRGs. HCO is at risk for HCO must gain APCs, some insurance contracts the costs of and physician of care negotiated separately between HCO and physicians s risk services ordered by physicians within the meet it Physician has no additional risk 4. Fees for Single-price Both physician and Requires episodes of care offered jointly to HCO and physicians HCO at risk for the cost of the physician-HCO collaboration on cost per episode contracts for discrete episodes of care, such as cardiovascular surgery or chemotherapy 5. Fees subject to a group incentive Contracts with Physician and HCO Requires share limited risk for the cost quality, and appropriatnss improvements or bonuses for meeting utilization or quality targets, such as readmission penalties collaboration on process to meet specific 6. Capitation Payment contracts Physician and HCO Requires of disease incidence or actual costs of treatment at unlimited risk for the cost of the episode and appropriateness physician-HCO collaboration on cost per episode, utilization, and disease incidence APC: ambulatory patient classification, DRG: diagnosis-related group, PPO: preferred provider organization

Explanation / Answer

For observing an excellent pricing strategy it’s important you compute your sales revenue on the basis of your premeditated pricing scheme and the consequential contribution margin percentage as this will facilitate you to ascertain if or not your pricing policy is adequate enough to allow you to achieve the break-even position or make profit.

If your anticipated sales revenue and income margin is inadequate to facilitate you to arrive at a break-even point then you need to increase your prices or lessen the expenditures of operating your business. Thus appropriate pricing policy necessitates that you adequately recognize all your expenses connected with the process of your product or services.

Thus it’s very crucial you properly examine and evaluate your cost structures maybe you should begin by having a glance at other suppliers providing an identical quality to perceive if you can lessen your expenditures.

Effective pricing policy necessitates a methodical advancement beginning with a comprehensive examination of the extensive diversity of elements that may have an impact on your pricing decisions and consequences.

It is only after having all the crucial and pre-requisite information’s you can establish in general a pricing policy and then within those considerations you would be able to compute prices for individual elements.

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