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Healthcare Services Pricing in the Egyptian Healthcare System

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There has been a great development in the healthcare sector in Egypt in the last five years through some major pillars, for example “Presidential initiatives, Ministry of Health programs for eliminating waiting lists, the universal health insurance law.”

As a result, it was necessary to develop the infrastructure of healthcare service providers “primary, secondary and tertiary” which has already begun.

Billions of pounds on the development of hospitals and clinics have been spent, while at the managerial level, which is from my point of view the most important pillar.

Egypt Established multiple authorities to enhance and empower the healthcare governance in Egypt in multiple sectors including drugs, medical supplies, and also to monitor overall healthcare performance such as the Egyptian Drug Authority (EDA) and the Egyptian Authority for Unified Procurement (UPA), Medical Supply and management of medical technology, and the General Authority for Healthcare Accreditation & Regulation (GAHAR), one of the comprehensive health insurance law authorities.

Therefore, all healthcare service providers from both public and private sectors must improve their performance and quality of care in order to get accreditation in the new healthcare services system in Egypt.

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Pricing is one of the most important tools of any organization in order to be able to compete in the healthcare market, after sitting the administrative structure and determining the list of services provided and developing their strategic plan in all its stages, any healthcare provider must accurately determine the cost of each service and determine the best pricing strategy that achieves the objectives of the organization.

It cannot be possible to consider any healthcare organization ready to provide its healthcare services except after setting a detailed price list for each service, with the discount rates for contracts such as contracting with private insurance companies, government insurance agencies, trade unions, companies,… etc.

What are the Steps of Healthcare Service Pricing?

The pricing process goes through several basic steps in brief as following

  • Determine the pricing strategy

(skimming price, penetration price, profit margin survival, etc.).

  • Determine the elasticity of supply & demand

How does the supply and demand of medical services affect the pricing decision?

  • Analyzing competitors’ prices and costs

You do not live on an island alone. In order to reach a competitive price, you must monitor the market prices and know your price position

  • Pay attention to the psychological side of the price

Many external and internal influences affect people’s decisions to buy your service, and these decisions differ from one country to another and from one customer segment to another.

These factors must be studied well, and the extent of their impact on the purchase decision.

  • Determine the appropriate method of pricing.
  • Determine the right price.
  • Discounts.
  • The price mix of the product.

That was a brief about the pricing process of healthcare services and we will discuss later in more details the different ways for pricing of healthcare services in the Egyptian market in the upcoming articles.

Conclusion

Egypt is now undertaking a comprehensive renaissance in the health care sector at all levels to improve the level of health services and provide better quality to citizens.

The development of healthcare sector in Egypt included the launch of multiple authorities in multiple sectors including the pharmaceutical, procurement, accreditation and regulations to improve the healthcare system governance.

Pricing of healthcare services is one of the most important factors in the go to market strategy for any healthcare provider, it should be well constructed and prepared to achieve the organization objectives.

The healthcare pricing process in Egypt should go through a systematic process to guarantee the right pricing of services and success in this competitive environment.

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Ahmed Ezz Eldin
Ahmed M. Ezz EL-Din, MBA - is a Senior Cost accountant for healthcare services in Egyptian General Authority of Health Insurance, Former member of the Standing Committee for Pricing of Medical Services in universal health insurance (UHIO), experience in calculating healthcare services costs and preparing price lists for health care services, has established the cost system in many governmental and private hospitals also participated in preparing healthcare service price lists in the Egyptian Ministry of Health and Universal Health Insurance (UHIO)

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