Pricing Medical Procedures with Confidence
Business Challenge
Building a Defensible Pricing Strategy Across 200+Procedures
As insurers narrow networks, high-deductible plans encourage consumers to shop for care, and price transparency places hospital charges under public scrutiny, one large healthcare provider faced a growing challenge: How do we set rational, market‑aligned prices across hundreds of publicly visible procedures?
To do so, the organization needed to understand price sensitivity and perceived value for more than 200 procedures – an undertaking that would be prohibitively complex and costly if approached one procedure at a time.
TRC’s Solution
A Herculean task approached strategically
TRC Insights designed a two‑stage research approach that balanced rigor with scalability:
- Multi‑Dimensional Scaling (MDS): In a brief survey of 10,000 consumers, respondents evaluated pairs of procedures based on perceived similarity. This revealed 20 natural clusters of procedures from the consumer’s point of view, dramatically simplifying the pricing challenge.
- Conjoint Analysis: A follow-up study measured the impact of key decision factors – including out-of-pocket cost and healthcare provider – within each cluster This quantified what consumers were willing to pay for procedures at specific providers.
Together, this approach delivered consumer-driven pricing guidance across hundreds of procedures without sacrificing precision.
Successful Results Implementation
Turning consumer insight into pricing confidence
The research provided a clear, defensible view of how consumers value the healthcare provider’s brand – by procedure and by market – enabling confident, market-informed pricing decisions.
