Strategic Integrated Market Simulation (SIM²) is an approach that is reshaping the way hospital executives are thinking about their hospital pricing strategy. Under the direct pressure of government regulations, the media, physicians, and consumers, hospitals are looking for ways to ensure that their pricing is aligned with the market needs, competitive dynamics, and yet still profitable to ensure a long-term future of supporting the healthcare needs of their community and patients. Market Innovations, Inc. (MII) has been working with nationally recognized hospitals to apply SIM² to redefine how they think about pricing. SIM² is an innovative and integrated approach to applying behavioral research methods as a means of getting more detailed market information. It doesn’t rely on historical or benchmarking data to setting prices, but rather it engages consumers and physicians in adaptive choice experiments to reveal how they will respond to alternative care product scenarios. Through sophisticated statistical techniques, SIM² derives empirical measures of price elasticity – i.e. how will the volume change depending how much price changes. These models can be linked to reimbursement and financial algorithms to fully understand the economic impact as price changes flow through the system. This provides a powerful scenario tool for quantifying the financial impact of different pricing and competitive market situations and for developing future pricing strategies.
In this forum presentation, the following topics are presented:
- Overview of SIM² – including core concepts, methodology, and techniques
- Process for executing SIM² – client’s responsibilities in co-design of research
- Illustrative case studies
- Lessons learned and implications for hospital pricing
If you would like an electronic copy of the slide presentation, please send an email to schalla@marketinnovationsinc.com with the subject line: CHA Revenue Cycle Forum Presentation