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There are two extremes when it comes to the power of providers to set prices. The first one is the provider has no power and must accept the reimbursement rate set by others. The second one is the provider sets the price and the third-party payers must accept them. Neither sounds like a win-win for all parties involved. We will explore these strategies in this week's discussion question.
You are the Business Manager for Dr. Jones' medical practice. He is hoping to open in a few months but first wants to determine his prices. He has asked you to recommend if he should set his own prices or accept those from third-party payers.
1. After researching both options, provide a memorandum with your recommendation.
2. In your memo, be sure to first provide a brief discussion of what it means to be price-setter or price-taker.
3. List the pros and cons of each one.
4. Be sure to comment on the strategies that would be used in both scenarios. 5.Finally, end the memo with your recommendation.
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