Being a Price-setter or a Price-taker
The power of providers to set prices depends on the benefits derived from the provider. A provider can either decide to be a price-taker or a price-setter. For price takers, providers are regarded as powerless because they do not have a say on the prices. It, therefore, means that the providers cannot control the cost. The advantage is that the price set may be higher than what the provider could have charged, thus benefiting the provider (Barber, Lorenzoni & Ong, 2019). On the other hand, the price setter benefits from the prices they have set. The third-party payers are always expected to adhere to the price set by the providers “Letters: Who should set prices for healthcare services?” 2019). In this regard, the providers usually enjoy the benefits that are linked with the prices they set. While setting the costs, the providers consider all the expenses they incur and ensure that they breakeven. Having a third party-payer accepting the prices set by the providers can be advantageous to the price setters. Taking third party payers after fixing the price may mean that the provider enjoys all that was integrated into the price during the planning stage (Barber, Lorenzoni & Ong, 2019). However, the provider who acts as a price setter must be an expert in setting the prices; otherwise the price may not cover the cost and needs of the provider.
Recommendation
Being a price setter has more benefits than being a price-taker. Price-setters can ensure that all the costs or expenses incurred are well taken care of. They also get satisfied with the payment they receive because it is their own making. Providers should, therefore, turn to be price setters to make good money. Making a profit is the ultimate desire of all the providers, and the only way they can maximize profit is by being price setters.
References
Barber, S. L., Lorenzoni, L., & Ong, P. (2019). Price setting and price regulation in health care: lessons for advancing universal health coverage (No. WHO/WKC-OECD/K18014). World Health Organization.