DPC Pricing Formula?

(Trinette Moss) #1

I know most of us set a price [either flat or tiered] for the most part. Is there a “formula” that works for calculating how to set your price?

For example like Overhead/n patients = base price. Or is that too simple?
For example if my overhead is $10K/ month & I want that to be covered by keeping 100 patients so I charge $100 per month.

Any other models out there that seem to work?

(Christopher Habig) #2

You’ve just calculated your breakeven (without taking money out of the business), important first step!

We recommend establishing how many people you want in your full patient panel down the line. From there work backward to determine your desired length of visit, days in-office each week, & vacation time. This will give you a set number of visit slots in which to see people in-office.

If you have had an existing practice, you can estimate the number of times your patients come in the office (average is 3-4x/year). Build some “firebreaks” into the schedule as well as some walk-in/acute spots if you are promising same day/next day visits.

This is basically a sensitivity analysis where you can input different numbers and see the resulting revenue, panel size, and lifestyle outputs of your new practice. Doesn’t take long to put together. Most important part is keeping expenses low and building from there. Pricing also depends on the socio-economic situation of your area as well as cost of living.

(Robin Dickinson) #3

I liked doing a spreadsheet and playing with all the variables (so I included how much I want to earn, patients per week, visits per patient, length of appointments, average cost per month, cost of rent, any other large and variable costs, cost of the rest of my overhead, etc.) Then I can play with it. What if I do shorter/longer appointments? What if the average number of visits per patient is higher than I expected, can I manage it? What if I rest a smaller space? A larger space? Charge more? Charge less? Want a higher or lower income? What about malpractice (mine is based on hours worked so that gets adjusted)? Being able to see how all those changes affect all the other numbers is really helpful IMO.

And I agree your area matters a lot. I could get my space for about $500 a month when I opened. DPC practices opening now are dealing with a skyrocketing real estate market and are paying several times that! My target patients are lower income…but if I had a different target patient, I’d be easily charging 2-3 times as much.