Which pricing strategy can be utilized by healthcare entities with little competition?

Full-cost pricing is a strategy where a healthcare entity sets prices based on the total costs associated with providing a service, including both fixed and variable costs, as well as a desired profit margin. This approach is particularly effective for healthcare entities with little competition, as they can establish prices that ensure they cover all their costs while also achieving their financial objectives.

In less competitive markets, healthcare providers can command higher prices because patients have fewer alternative options. By using full-cost pricing, these entities can analyze their total expenditure, ensuring that all operational costs are reflected in the pricing structure, which helps maintain solvency and profitability in a landscape where price competition is minimal.

This strategy is less effective in high-competition scenarios, where entities may need to adopt different pricing strategies to remain attractive to consumers, such as variable or marginal cost pricing, which adjust pricing based on specific cost structures or market conditions.