This Week your discussion should focus on pricing and distribution (the next 2 o

ID: 470381 • Letter: T

Question

This Week your discussion should focus on pricing and distribution (the next 2 of the 4 P's). Think about the concept of price in healthcare (which also includes time spent and inconvenience!). It reminds me of a case I saw a few years back when a businessman sent a bill to his dentist for making him wait an hour...and the judge upheld it. Basically, the business man said that he billed his time at $350.00/hour, so his waiting time cost roughly $500.00. so, the total "cost" of his dental visit included lost time and money... From the distribution perspective, how care is distributed is also an issue. for instance, a local sports medicine clinic that had it's first location close to Cape Fear Valley Health System now has a second location out on Ramsey Street. It makes perfect sense, since a large high school (and Methodist University and Fayetteville State are located nearby. So, athletes have a choice of location and that would help for pre-sport physicals, etc... similarly, now flu shots can be obtained at many different locations (this is also "distribution"). No, for the purposes of this discussion, consider how pricing and distribution P's might be used to the advantage of the Columbus Clinic...

Explanation / Answer

There is difference in the field of operation in medicines. Vaccination, medication, normal visit and some issue related visit is completely different in its aspect. For ex: if you have to buy some medicines or get some medicine injected then time spent is usually low as the work requires less time and skill. You can get it done by normal physician or a nurse/pharmacist but in case of operating someone like in the case with dentist it usually requires skill and time spent doing that work. So it is charged according to time or complexity of operation.

So when we go for operation & checkup we can divide pricing structure in these factors

Operation

Normal checkup

Analysis of severity of condition

Normal analysis cost

Time and resources required

Time required

Skill requirement & additional help if needed

Normal visiting cost

Cost of equipment used

Cost of equipment used

Recovery phase and the criticality of issue

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So we can easily see that there is altogether different issue involved in these two medical healthcare. So pricing is completely different.

When we come to distribution part we need to see the case from medical team’s perspective. Things that affect distribution of services around a certain area totally depends on these factors.

In these the most concerning factor is investment cost to return ratio and frequency of clients. If a place has huge demand of services with availability of resources then one can easily go for providing such services in the region.

These days to maintain profit ratio and maintenance usually hospital also provide healthcare checkup camps at lower price as these are impulsive and doesn’t require any illness or reason to visit. This keeps in cash inflow maintenance and keeps business running.