Which pricing strategy might healthcare entities avoid if they desire to cover all direct costs?

Prepare for the HFMA Business of Health Care Test. Study with flashcards and multiple choice questions, each question offers hints and explanations to boost your confidence. Ace your exam!

Healthcare entities focusing on covering all direct costs would likely avoid marginal cost pricing. This pricing strategy involves setting prices based solely on variable costs associated with producing one additional unit of service. While this may cover some of the direct costs for specific services, it does not account for fixed costs or the overall expenses tied to a broader array of services.

Full-cost pricing, on the other hand, encompasses both direct costs and fixed costs, ensuring that overall expenditures are covered. Value-based pricing considers the value of services from the patient’s perspective, which might involve additional complexities beyond simple cost coverage. Dynamic pricing fluctuates based on market demand and other external factors, which could result in pricing that doesn't ensure coverage of costs consistently.

Thus, since marginal cost pricing only addresses the additional costs rather than the comprehensive costs associated with healthcare delivery, it is not suitable for entities aiming to cover all their direct costs.

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