UNDERSTANDING THE COMMON RATIONALES ADOPTED IN HEALTHCARE PRICE SETTING ACROSS THE PRIVATE HEALTHCARE SECTOR IN SRI LANKA: A QUALITATIVE STUDY

Abstract

BACKGROUND / OBJECTIVES The Sri Lankan healthcare system consists of public and private sectors. In terms of capacity, the public sector dominates the provision of care across curative, preventive and outpatient care. The private sector, too, has grown rapidly in recent years but was mainly confined to providing curative, diagnostic and outpatient care. Since, there are little or no studies conducted in Sri Lanka thus far, the objective of this study was to understand the current approaches adopted in determining the base of healthcare payments. This study also investigated the economic and administrative processes involved in determining the level of healthcare pricing in the private sector healthcare industry in Sri Lanka. METHOD This qualitative study investigated the rationales adopted in healthcare pricing by healthcare administrators in the private sector. Structured interviews and thematic analysis were applied for data collection and analysis. RESULTS Five key themes which influenced pricing were identified from the interviews. These themes included influence from the practisingclinicians, competitor pricing, price adjustment/profit margins, consumables and human resource cost and economic demands. There was a consensus that competitor pricing and seniority of the practicing clinicians had an impact on pricing strategy. CONCLUSION This study revealed that the base of payment in private sector healthcare is fees for services (FFS). Adopting popular international approaches such as diagnostic related groups (DRGS) was not evident in this study. Further, it was evident that the Sri Lankan private healthcare sector administrators unilaterally fix pricing based on the identified key themes without adequately consulting the healthcare payers and users.