Question

DISCUSSION QUESTION 5-1

MH684 Managed Health Care

Lesson 5: Managed Care Operations

Upon completion of the Required Readings, write a thorough, well-planned narrative answer to the following discussion question. Rely on your Required Readings and the Lecture and Research Update for specific information to answer the discussion question, but turn to your original thoughts when asked to apply, evaluate, analyze, or synthesize the information.  Your Discussion Question response should be both grammatically and mechanically correct, and formatted in the same fashion as the question itself. If there is a Part A, your response should identify a Part A, etc.  In addition, you must appropriately cite all resources used in your responses and document in a bibliography using APA style.

Discussion Question 1 (20 points)

Predatory pricing or “low-balling” (i.e., premium rates are intentionally set well below the actual cost of providing care) occurs between managed care organizations. What would be two (2) reasons for predatory pricing? Discuss each. (20 points) (A 1-page response is required.)

Answer 1

Answer :

Predatory pricing : it is defined as it is a price setting strategy in these services are provided by the low cost setting or very low price.

It will occur in between managed care organizations.

Reasons for predatory pricing :

1. To achieve new customers.

2. To prevent the entry of potential new copetiters.

It is an illegal act.

1. To achieve new customers :

* by setting Low prices they can attract to wards to managed care organizations.

* consumers may get short term benefit here.

* if they go for long Care they may pay more.

* the people who are need to seek health care needs by managed care organizations first they will get information and they will compare which is the best, so then they will select the effective one.

* so by these predatory pricing they can attract the more people to wards the organization.

* because low price always benefit to consumers.

* so the people may prefer it.

* by giving popular advertisements and propaganda they show there benefits to consumers .

* so, that the more new customers may achieve to the organization.

2. To prevent the entry of potential new competitors :

* by providing predatory pricing the New competitors some times may not affordable to provide the care for that low cost.

* because always starting time they need good investment.

* even though the new organization started, already due to predatory pricing the old consumers attracted to wards old organizations only.

* and they are getting benefits for low price only.

* so by the way new competitors may not able to entry.