topic: Pricing

This might seem counterintuitive, but when thinking about pricing, forget about the price. At first. There are a number of different questions you need to ask and answer before you can settle on a feasible monthly membership fee. What is your definition of success? What is your goal salary? How many hours do you want to work? How many staff will your clinic employ? Do you want to grow fast, or slowly? What does your ideal patient look like, and what is the maximum number that you can accommodate?


Review Pricing Strategies

The truth is you can copy another clinic’s pricing strategy, but until you answer these questions you won’t have a pricing solution tailored to your specific needs.

A general starting equation might look something like: (ideal salary) + (estimated overhead) + (20-30% wiggle room) = Total $ per year / 12 months = total per month / ideal patient panel size = avg $ per patient.

If you’re a solo, part-time doctor operating a small practice with no staff, the equation, when filled in, might look like: 120k + 30k + 30K = 180k / 12 = 15,000/mo / 300 = $50 average.

But for a doctor running a clinic with multiple staff, geared towards high growth with a focus on pediatrics, this equation would look like something else entirely, and the final amount would correspond to those differences.

The above equation gets you to the minimum sustainable pricing needed to run your clinic and is effective for most doctors to grow and achieve a decent salary after a year or two of practicing. If you’d like to earn more, faster, then the next step in the pricing process is to take into account your personal financial risk tolerance. Are you willing to risk charging higher membership fees at the expense of slower growth? Can you provide the necessary value to justify higher membership fees? These are the questions you have to consider, but know that lower fees offer more guarantee of patient enrollment and less risk of establishing an unsuccessful clinic.

And speaking of value, now’s the time to address it. Your price should reflect the value that your clinic offers. What value are you bringing to your membership fee? $10 per month for healthy kids vs $50 for specialized autism care? Unlimited visits with no copays? Or limited visits with copays? Wholesale meds? Wholesale labs? Free procedures? Every one of these needs to be factored in when determining your pricing structure. You also have to take into account the proliferation of Direct Care clinics and the competition that this presents. Increasingly there are more Direct Care practices in every city for patients to choose from. So you might be able to charge more and do less in some locations for a while, but the risk is great.

Commonly Used Pricing Structures

When it comes to membership fees, every DPC clinic has slight variations within its own pricing structure.
There are a few different variables to consider. Choose from a flat rate, couple or family plans, annual discounts, age tiers or some combination of the above. That being said, there are commonly used pricing structures that many clinics adhere to, which we’ll discuss in more detail below.

When it comes to an enrollment fee, it’s generally advised to keep it low or get rid of it altogether in order to encourage more patients to sign up.

If you’re partnering with a company, offering a corporate discount is a great way of attracting large numbers of new patients. $50 per employee is generally a good starting point.

Many clinics also adjust their monthly fees according to different age tiers, with younger members paying less. The tiers usually look something like this:

Age 0-19 $10/mo.
Age 20-44 $50/mo.
Age 45-64 $75/mo.
Age 65+ $100/mo.

You should also consider your re-enrollment process. Some doctors refuse patients who have unenrolled or missed payments. Others charge back-payments on all membership fees missed during the times when patients weren’t enrolled. Others charge a re-enrollment fee. If you decide on the latter route then ensure that it’s at least twice the price of your monthly fee to prevent people from continually unenrolling and then re-enrolling.