Making prices make sense: a balanced approach to defensible prices: this project is a collaborative effort by MedAssets and the Healthcare Financial Management Association

Healthcare Financial Management, July, 2005

Identify market data on a procedural basis, particularly for those procedures that generate 80 percent of revenues.

Know the relationship of your pricing to your cost to ensure that an item's markup is not out of line, making defense of the price a challenge.

Perform a market analysis ideally on an annual basis. Don't let more than two years go by without looking at comparative data.

Even though price modeling is generally done annually, costs for some high-cost medical devices and pharmaceuticals may change much more frequently. So make certain that prices take these frequent (and possibly big) changes into account. Ensure that internal controls can be documented and that compliance issues are covered.

Consider technology solutions to the price-modeling scenario. Try to find suppliers who have experience with price modeling in a variety of provider situations and have access to comparative pricing benchmarks.