As referenced in the brief session description, we have had numerous discussions with hospital executives regarding the impact of environmental factors on hospital pricing. Specifically, executives consider the magnitude geographic location, payer mix, level of self-pay patients, teaching intensity, size, payer reimbursement terms, and other factors ultimately impact the end price they must charge for hospital services. Certainly, these factors can be discussed and debated from a theoretical or abstract standpoint. However, through the use of a national study of hospital data we hope to provide more concrete evidence to this conceptual discussion. The national study is an ongoing examination of data from publicly available sources, as well as, a subset of US hospitals that have voluntarily submitted information (approximately 250 hospitals in each of the past several years). Our methodology in the hospital study has been to test the impact of various factors, as mentioned previously, on overall price position. Overall price position is measured, in large part, by the Hospital Charge Index - a metric of performance that is widely recognized and published (including HFMA-associated publications). The metric evaluates both inpatient and outpatient pricing by average encounter charge for Medicare patients adjusting for case intensity and cost-of-living. Our approach in the presentation will be to explain the extent to which the various factors impact price position. The goal of this portion will be to bring greater understanding of why hospital pricing can be so dramatically different even between hospitals that are located within the same region. We have found that greater understanding of these factors and the associated impact aids communication of price position with hospital and community stakeholders. As a result, executives can more easily and confidently explain why differences exist. Following the discussion of the impact of these environmental factors on price, we will provide strategic responses to defend hospital pricing. Defense strategies include creating a hospital price policy (including self-pay discount methodology), comparative peer position, and the Return on Investment (ROI) public utility model that has been used nationally in litigation cases. The creation of hospital price policies and, perhaps, more importantly self-pay discount methodologies have become increased areas of focus for many executives. We will provide practitioner insight into this area, as well as, information from hospital-provided surveys. The discussion on comparative position and ROI price defense model will attempt to give executives tools that can be immediately used to assess their hospitals overall price position and then subsequently explain it to interested groups and individuals. In sum, the goal of the presentation will be to highlight factors that influence hospital pricing and to provide tools in addressing those factors in creation of a strategic and defensible price position.