Overview of products/service and target market

The selected healthcare organization is the Ann & Robert H. Lurie Children’s Hospital of Chicago. The hospital which is located in Chicago, Illinois operates as a pediatric specialty hospital. The hospital has over 70 pediatric specialties and has physicians at in other suburban locations. The hospital has expanded its operations accommodate patients from other countries. There are several specialties and services being offered at the facility that are designed for children such as audiology, neurosurgery, palliative care, brain tumor, clinical nutrition, neonatology, urology and dermatology among others (Komiske, 2013). The facility is not only geared towards treatment of children but it is also committed towards making sure that the patients as well as their families are receiving support that include mental, emotional and spiritual.

Overview of pricing considerations

Healthcare facilities must ensure that they are more transparent about their cost of care since payers as well as employers need to know the costs up front so that they can make accurate comparisons of the value for their money. It is important to note that some hospitals have an all-inclusive packaged prices for some of their services (Blanco, 1996). A rational pricing system for hospitals need to be simple to administer and be able to address the various demands of the stakeholders. It should be based on defensible elements in relation to objective benchmarks such as market price and costs. Stability and predictability should be seen in the pricing administrative processes (Schoonveld, 2011). Finally, there is need to ensure full coverage of all the financial demands that are linked to the provision of care and other benefits to the community.


Pricing strategy adopted by the hospital

The hospital has adopted a price discrimination strategy in which patients are charged different prices based on the type of care and treatment offered. As a result, there are listed standard charges which are the standard amounts listed before any discount is given. Actual charges are those based on the type of care and it differ from one patient to another even when a similar procedure has been performed (Thomas, 2008). The standard hospital charges are exclusive of professional services. The hospital is keen at ensuring ready availability of all information regarding prices so as to help the patients and care purchasers to accurately identify and choose providers that offer the desired level of value. Price transparency has been ensured through an easy to understand format that allows for quick comparisons. The pricing strategy adopted by the organization is appropriate because it takes into consideration the various needs of the patients.

Value delivery network and distribution strategy

The organization is limited by the government in terms of its pricing by the rules set by the federal government. The hospital employs a horizontal value delivery network and intensive distribution strategy (Brown, 1992). The distribution strategy is influenced by the need for transparency in pricing and quality services that are customer focused. The hospital need to incorporate economic pricing strategy into their pricing so as to serve the interest of many customers.




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