What Is the Basis for Determining Price by Health Care

question 14

Multiple Choice

What is the basis for determining price by health care organizations?

• A)The best formulas for determining price involve setting price on the highest possible margin above cost.
• B)The novelty of the product or service is the best basis for establishing price.
• C)A health care organization determines a price based on the services offered, the ability of the consumer to pay, and the cost to deliver the service.
• D)Cost leadership that generates low prices relative to competitors is always the best basis for pricing in health care.

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Definitions:

Adverse Selection Problem

A situation where asymmetric information leads to the selection of poor-quality goods or candidates, as the chooser lacks information to make an optimal decision.

Incompetent

Lacking the necessary skills, qualities, or ability to effectively perform a specific job or task.

Moral Hazard

The risk that a party insulated from risk may behave differently than if they were fully exposed to the risk.

Walk-Throughs

Detailed guides or inspections usually performed to assess, explain, or demonstrate procedures or how a series of steps is to be followed.