Pricing and performance in health maintenance organizations: a strategic management perspective

Innovative, consumer-oriented pricing strategies have contributed to the impressive growth of health maintenance organizations (HMOs). In a national study of HMO marketing directors, the relationships between strategic management style and (1) the relative importance of pricing in competitive marketing strategy, (2) the effectiveness of price strategy planning, and (3) financial performance are examined. The findings indicate that HMOs practicing effective price planning also perform well on an overall basis. Insight into the content and substance of HMO pricing strategies is also provided.