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What is a Case Rate?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 13 June 2018
  • Copyright Protected:
    2003-2018
    Conjecture Corporation
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The case rate is a type of pricing method that is sometimes applied to a specific group of services and procedures. This method helps to identify the per diem rate that applies to the cost of that specified group, providing a clearer understanding of how much return is generated by the case or group of services after considering various expenses associated with the preparation and promotion of those goods and services to prospective consumers. Sometimes known as a case price, this approach helps businesses to more fully account for their costs in producing and selling the services and determine if the effort is in fact worth the time and effort.

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One of the best ways to understand the concept of a case rate is to consider the costs that a telecommunications company incurs by promoting and marketing a bundled package of services to a specific sector or group of consumers. By taking the total amount spent on the annual marketing efforts used to generate sales, and dividing that figure by the total amount of bundled packages sold during that same annual period, it is possible to identify the rate or price of each of those bundles. Assuming that the resulting figure is more than the actual market price for those bundles, the business is likely generating enough profit from the sales to offset promotional costs, making the package worth the effort to continue marketing that particular bundle. If that figure is less than enough to cover promotional costs, the process must be retooled or the bundle must be abandoned in favor of something that is likely to generate greater interest among consumers and result in a more favorable per diem rate for the project.

Even in the medical field, the concept of the case rate is commonly employed as a means of determining what a specific group of medical procedures will cost consumers. Here, the case or range of procedures and services will often include the actual methods used to treat a health issue as well as any recuperative support that may be necessary, such as bed rest or physical therapy after a surgical procedure. By understanding the projected cost for the overall case, administrators can more adequately project the charges to assess the patient in order to generate enough return to offset the expense and allow the healthcare facility to continue operating and serving other patients.

The general idea of a case rate can be translated into a wide range of business operations. Even a local grocer can use this approach to determine what type of foodstuffs to carry as standard inventory, based on consumer response to his or her marketing efforts. While not the only consideration when it comes to assessing the success and profitability of a given case, the case rate can provide important information that helps the business decide if this particular case or bundle is worth maintaining, or if some changes are in order.

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