Healthcare Pricing Analytics for Providers- The five-minute guide
What is Pricing Analytics
With the power of advanced analytics, modern pricing and profitability management are revolutionizing how businesses make decisions. By mining through massive data sets with millions of variables and billions of cases, providers can gain valuable insights from analyzing unstructured information such as text, emails, tweets images or audio files in real-time. Even more impressive is their ability to uncover hidden patterns without having an outcome premeditated – allowing them discover trends they might not have noticed before!
The need for a dynamic data driven Pricing Strategy
Previous studies have revealed an incredible disparity in price points between insurer-negotiated rates with providers, both locally and nationally. In Oct 2022 CloudAstra used available data to illustrate these differences; for instance, lab tests had a staggering 200% difference in the lowest vs highest prices while knee MRI imaging boasted nearly six times that cost variation! These common services are typically considered “shoppable” items among consumers proving yet again how important it is to shop around when making healthcare decisions.
The provision of medical services faces a dilemma: while cross-provider and cross-insurer discrepancies are poised to shrink, the disparity in cost savings will depend heavily on the type of care needed. Consumers tend to be more price conscious with routine procedures as opposed to life or death treatments like surgeries and cancer interventions.
As the healthcare marketplace shifts toward more competitive pricing, interesting tactics and incentives are emerging. Higher-priced providers can entice customers with premium benefits like convenient services or luxurious amenities while lower cost companies will highlight their economical rates as a great value to consumers. Much in line with airlines who offer basic fares then allow you “buy up” for additional features, patients now have similar options when it comes to selecting where they receive care!
Can pricing analytics help healthcare business to increase profit?
Healthcare businesses can benefit greatly from pricing analytics, as they can use the data to optimize their pricing strategies and make informed decisions. Pricing analytics helps healthcare organizations spot trends in the market, anticipate patient demand and understand competitive pricing. With accurate pricing data, healthcare providers can develop smarter pricing plans that maximize their profits while still offering competitive prices. It also allows them to adjust prices on a regular basis to accommodate fluctuations in demand and market factors. In addition, it enables providers to identify areas of waste and create efficiencies in their operations by eliminating unnecessary spending and improving their budgeting processes. By leveraging the power of pricing analytics, healthcare providers can make sure that they are providing quality care at the most cost-effective price possible.
The Potential Benefits
Smart decision-making is a crucial element of success in today’s ever-changing healthcare business climate. Hospitals have historically had little insight into their competitors’ prices, creating an unbalanced playing field in the world of hospital-payer negotiations. But with the availability of curated pricing data, powered by CloudAstra, hospitals and health systems can leverage information to strengthen their positions – whether it means negotiating higher rates for CT/MRI procedures if they offer quality care at a lower price or offering reduced rates on laparoscopic surgery when their prices are too high compared with others. With this capability, hospitals can make moves that better position them to bring down overall spending while ensuring fair payouts from insurance providers.
Why it Matters Now for Healthcare providers and partners?
Healthcare companies are missing out on huge opportunities to increase their profitability, with research showing that price management initiatives can generate a return on investment between 200 and 350 percent in just 12 months. Unfortunately, most healthcare businesses don’t have the data-driven foundation they need for making sound decisions around pricing – instead relying on guesswork or outdated practices – which brings unnecessary risk and erodes margins.
What to DO Now?
Gauge your current data readiness: Successful organizations recognize the critical role pricing plays in driving value for their organization and take a comprehensive approach to utilize analytics. Depending on how mature your company’s existing pricing capabilities are – from nascent start to savvy veteran – there is a defined course of action that should be taken; beginning with building out foundational models mapping towards maturity goals while simultaneously supporting current operations.
Know what you need to measure: Healthcare leaders need to have a clear understanding of their desired outcomes in order to know which data and metrics will be most effective. Too often, organizations include many more than the necessary number of metrics on their dashboards; however, the successful ones narrow it down to one or two essential measurements that are specific for reaching intended goals as well as common performance indicators like competitive ranking, patient trend, profitability ratios, and churn rate.
Focus on Data Quality: Providers oftentimes have access to a plethora of data, but this doesn’t always mean it’s useful. To get the most out of their information assets, companies should invest in processes to tag and scrub the data for accuracy and consistency. They can even go one step further by monitoring how clean their information is so that they are confident reliability won’t be an issue when making decisions based on these measurements.
Connect pricing data with existing data to make meaningful insights: Providers have a great opportunity to make more intelligent pricing decisions by connecting pricing data with existing healthcare data. To prepare your business for success in leveraging analytics and making smarter pricing strategies, explore all avenues of relevant information – think outside the box including both internal metrics as well as external sources which can provide valuable insight into customer behavior.
Invest in a data-driven healthcare culture: Despite the overwhelming amount of data available to healthcare leaders, it’s essential that users actually use this information when making decisions. To make sure they’re getting the most out of their insights, it’s key for these professionals to provide front-line managers with specialized tools and quality data – an invaluable asset in accurately predicting business trends.
How CloudAstra can help your healthcare organization?
Leveraging the potential of data intelligence is no easy task; it requires sophisticated tools blended with expertise to make sense of vast amounts of data.
With the power of CloudAstra’s pricing data, healthcare companies can unlock valuable insights and opportunities to improve outcomes, increase efficiency, drive innovation and growth. Our proven solutions help organizations harness all these possibilities – transforming them into analytics-driven enterprises capable of producing real value for their stakeholders and beyond!
We work with payers, providers, and tech companies alike as they move towards an analytics-enabled future – one that will bring tangible benefits across their organization while driving innovation in the industry at large.
Talk to us for more information and to see a demo. https://cloudastra.ai/contact-us/