Successful contracting depends on optimal retail pricing.

Retail price structures are a critical part of the managed care contracting process because payers use local and national charge norms to compare hospitals and to determine negotiating targets. To successfully negotiate managed care contracts, and to be able to offer sensible discounts to payers that require them, a healthcare organization needs to determine its retail prices relative to the marketplace. By measuring their charge structure's variance from those of other providers in the same market, healthcare organizations can ensure that their retail prices are competitive.