England NHS public hospital patient price structure strategy1.What do you understand by the concept of a pricing model? Critically discuss their relevance to a public sector service, such as the NHS.A price model reflects the fact that companies can generate revenue through a variety of combination of the basic price and prices charged for optional additional items. Some price models may be sustainable by giving away a product at very low price initially, but then charge higher prices for essential items that are needed to make the product function. Sometimes, the dominant pricing model in a market is challenged by a new entrant, with the result that consumers' expectations are changed. The price model can occur in perfectly competitive market or non perfectly competitive market. A perfectly competitive market characteristics include there are many producers supplying the market, each with similar cost structures and each producing an identical product. No single supplier on its own influence the market price because it is not monopoly, water and electricity is managed by government to control the public utility company which can not charge high fee to every householder user at the reasonable price; both buyers and sellers are free to enter or leave the market and there are no barriers to entry or exit and there is a ready of information for buyers and sellers, for example about competing alternatives, e.g. oil products and stock markets where shares are bought and sold are exist in perfectly competitive market. In perfectly competitive markets, firms are price taker and their ability to set prices is limited by the level of demand and supply within the market they serve. If the total demand go up, all other things being equal, the going rate of prices in the market for their product will rise. Likewise, if there is a drop in total supply for whatever reason ( e.g. because of bad weather, there will be further pressure for prices in the market to rise. The final price paid in the market will reflect the balance between supply side and demand side factors.The model of perfect competition presented the forces of competition may be ideal for consumers because the tendency of market forces to minimize prices and/or maximize firms' outputs. But in such markets, suppliers are forced to be price takers rather than price makers. in a perfectly competitive market, firms are unable to use marketing strategies to affect the price at which they sell. At a higher price, buyers will immediately substitute identical products from other suppliers. Lower prices would be unsustainable in an industry where all firms had similar cost structures. Otherwise, an non perfectly competitive market, firms are able to use marketing strategies to affect the price at which they sell. Such as UK medical service market, private hospitals and public hospitals and clinics which can raise their service fee to their patients to follow their patients demand due to their doctors and nurses service performance, medicines quality and price and patient beds supplies factors to influence their service charges to their patients in UK. Hence, NHS needs to provide different and excellent medical service to its patients to make them to feel it's service is better to other private hospitals and clinics if it wanted to apply price model to its car parking or hospital phone system service charge to its patients because it is a public sector medical service organization. It ought not charge extra service fee to its patients in its hospitals. If it charged extra service fee, such as car parking and hospital phone system service which are same or higher or lower than other private hospitals or clinic, which need to ensure which medicine quality, doctors and nurses performance which are better than private hospitals and clinics and its patient beds need have enough supply to any patients when who feel need to sleep in its hospital.