MDVIP is a group of primary care physicians in Florida

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MDVIP
is a group of primary care physicians in Florida that offers a unique pricing
structure. They charge patients a fixed fee of $1,500 per year on top of fees
per visit over the year. That is, patients pay $1,500 even if they do not see a
doctor during the year and still pay per consultation despite having paid the
annual fee. The per visit fees are comparable to industry averages and are
covered by patients health insurance. The fixed fee is not covered by standard
health insurance. Since introducing the pricing format, the size of MDVIP’s
practice has shrunk from 6,000 patients to 300. Doctor’s schedules are
consequently more open, making it easier for patients to schedule
appointments. In addition, doctor
patient consultations are well above the industry average of just under ten
minutes.
Using
the four competetive dimensions, how would you describe MDVIP’s strategic
position relative to a comparable, traditional practice? What are the
implication for how MDVIP must manage its resources?

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