After one of the most tumultuous periods of chaos in modern history, the healthcare sector worldwide is finally seeing some stability in a post-pandemic world. However, while caseloads have shrunken with respect to the pandemic days, other significant challenges have sprung up for healthcare leaders to address. One of the major struggles involves balancing profitability in hospital operations with a very dynamic and non-guaranteed patient inflow. Hospital CEOs are digging deep into their strategy books to discover ways to accommodate patient-friendly sweet spots in the pricing of healthcare services.

Guaranteeing high-quality patient care at affordable prices requires hospitals to strategically overhaul their revenue models with more informed pricing decisions. Market conditions such as the overall economic sentiments, inflation trends in the supply chain, patient spending trends, operational expenses, etc. need to be factored in while deciding on pricing. To accommodate such a range of variations and outcomes in daily routines, hospitals need to shift their pricing approaches into a scenario-based forecasting model.

What is a scenario-based forecasting model in hospital pricing?

In this approach, the hospital evaluates all possible and logical scenarios that can happen in its care delivery routine. The leadership then formulates how variances in key elements like patient volume, insurance reimbursements, operational costs, etc. work in each scenario. Through this, they arrive at a range of potential outcomes to which flexible pricing strategies are assigned. Such a model offers a tremendous number of benefits for hospitals.

The key benefits of scenario-based forecasting in hospitals:

Confident decision-making

With all plausible scenarios considered, hospitals have a wide pool of data they can process to derive deep insights into each outcome. Such granular data insights help remove uncertainty in decision-making and thereby help hospitals make confident decisions on pricing models for their services.

Personalized patient pricing experience

We have seen how hospitals gain more confidence with their pricing models thanks to scenario-based forecasting. The confidence also gives them the ability to customize at will to ensure that every patient or patient category is provided with a personalized pricing model that reflects their specific needs, financial capacity, and opted care routines. As every possible outcome is already mapped out, it will be easy for the hospital to connect pieces and bring out a personalized pricing option that will be equitable for patients with diverse financial needs. Such deep levels of personalization improve patient experience and lead to better loyalty and long-term revenue guarantee.

Seamless revenue forecasting

The growth of a hospital from a business perspective depends largely on its frugality in controlling costs to ensure continued profitability. For this, they need accurate revenue projections and accordingly optimize pricing and costing approaches to reflect the expected results. With scenario-based forecasting, the revenue data from every possible scenario can be generated in advance thereby helping the hospital prepare for growth consistently and sustainably. They can optimize resources to ensure demands are fulfilled efficiently and subsequent operational costs are minimized thereby reflecting on pricing of services in the long run.

Gain competitive advantage

With scenario-based forecasting, hospitals get to know in advance the potential price points they can use in specific patient contexts or in time-sensitive scenarios. For example, in the flu or winter season, they could foresee the patient volume, the possible supply chain issues disrupting pricing, etc. Knowing how each granular component impacts the price of service, they can plan to balance revenue by planning a more efficient workflow and cost management. This allows them to offer competitive pricing when compared to other hospitals thereby bringing in more patient volume automatically. In other words, scenario-based forecasting allows hospitals to adapt easily to market trends and achieve leadership positions faster.

What does it take for hospitals to migrate into scenario-based forecasting?

To begin with, hospital leaders need to clearly define and capture all the relevant data points that help them generate all possible scenarios in financial operations. All key factors influencing pricing decisions like patient volume, payer mix, legal obligations, etc. need to be factored in as data points. Using the data points, they need to model and create scenarios that reflect actual outcomes like medical procedures. Once the financial implications of each scenario have been mapped to associated costs, then comes the price optimization phase wherein flexible pricing strategies are introduced to handle market fluctuations.

Getting scenario-based forecasting right with the best

While the intricacies of financial operations and revenue optimization imbibe a lot of strategic principles, the right way for hospitals to move into scenario-based forecasting is to select a powerful digital tool or platform that helps in the acquisition of data, computational and intelligent processing, and delivery of decision insights for more informed decisions. Realizing the need for hospitals to match price models in tune with market dynamics, Proactive introduced the most streamlined pricing solution for the healthcare sector. Get in touch with us to know more about winning the pricing game with scenario-based forecasting powered by a world-class platform.