Pricing hospital care: Global budgets and marginal pricing strategies

Pricing hospital care: Global budgets and marginal pricing strategies.

OBJECTIVE The Canadian province of British Columbia (BC) is adding financial incentives to increase the volume of surgeries provided by hospitals using a marginal pricing approach. The objective of this study is to calculate marginal costs of surgeries based on assumptions regarding hospitals' availability of labor and equipment. DATA This study is based on observational clinical, administrat...

Global Pricing Strategies for Pharmaceutical Product Launches

Reference pricing and firms' pricing strategies.

Within a horizontal differentiation model and allowing for heterogeneous qualities, we analyze the effects of reference pricing reimbursement on firms' pricing strategies. With this analysis we find inherent incentives for firms' pricing behavior, and consequently we shed some light on the time consistency of such policy. The analysis encompasses different reference price rules: (i) reference p...

Marginal cost pricing versus insurance

The regulator of a natural monopoly that sets a two-part tariff and whose marginal cost is stochastic will generally want the price to vary less than marginal cost when the lump-sum charge in the tariff is fixed. A trade-off exists between efficient pricing and an optimal allocation of risk. Pricing at marginal cost is only optimal when the consumer’s marginal utility is independent of the pric...

Marginal Cost Pricing and Eminent Domain

There are three separate strands of literature in economics that are related to the efficiency of takings under eminent domain: one addresses the question of optimal compensation for properties that are taken, the second inquires how governments might learn the values of properties that they consider taking, while the third analyzes solutions to the problem of land assembly. This essay reviews ...