Pricing Your Practice¶

Quick Summary: Calculate your required revenue (operating costs + desired income + buffer), divide by target panel size and 12 months for base pricing. Validate against local market rates. The national average adult membership was $98.64/month in the State of DPC 2026 survey, with regional averages from about $80 (Midwest) to $113 (West).

Table of Contents¶

• The Pricing Formula
• Step-by-Step Pricing Process
• Pricing Psychology
• Special Pricing Situations
• When to Raise Prices
• Common Pricing Mistakes
• Pricing Worksheet
• Checklist
• Break-Even Calculator

Overview¶

Setting the right price for your Direct Primary Care membership is one of the most consequential decisions you will make. Price too high and you struggle to attract patients. Price too low and you cannot sustain the practice or deliver the value patients expect.

This guide provides a systematic approach to pricing that balances financial sustainability with market accessibility.

Prerequisites¶

• Completed Startup Costs Overview
• Understanding of Membership Models
• Knowledge of your target patient demographic
• Awareness of local healthcare market

The Pricing Formula¶

Sustainable DPC pricing comes from understanding three key numbers:

1. Your Required Revenue¶

What do you need to earn to cover costs and pay yourself?

Annual Revenue Needed = Operating Costs + Desired Income + Taxes + Reserve

2. Your Target Panel Size¶

How many patients do you want to care for?

Typical DPC panels: 400-700 patients per physician (State of DPC 2026 survey; the AAFP reports an average of about 413) - Lower panels (400-500): More time per patient, higher price needed - Higher panels (600-700): More volume, lower price sustainable

3. Your Price Per Member¶

Average Monthly Price = Annual Revenue Needed ÷ Target Panel ÷ 12

Step-by-Step Pricing Process¶

Step 1: Calculate Your Operating Costs¶

Use your numbers from the Startup Costs Overview or the Monthly Expenses Template.

Example Monthly Operating Costs (Shared Space Model):

Step 2: Determine Your Desired Income¶

What do you need/want to earn personally?

Considerations: - Current income or living expenses - Student loan payments - Retirement contributions - Health insurance costs (you must provide your own) - Life/disability insurance - Desired lifestyle

Example: - Desired take-home income: $180,000/year - Self-employment tax: ~$31,300 (working: net profit of about $291,000 × 92.35% = $268,700 of net earnings; Social Security 12.4% × the $184,500 wage base for 2026 = $22,878; Medicare 2.9% × $268,700 = $7,792; Additional Medicare 0.9% on earnings above $200,000 = $618; total $31,288) - Federal and state income tax: ~$45,000 (assumes a blended 25% effective rate on the $180,000 take-home target: $180,000 × 25% = $45,000. Your rate depends on filing status, state and deductions, so replace this line with your accountant's estimate. Do not skip it: leaving income tax out of the target understates the revenue you need by tens of thousands of dollars a year) - Health insurance: $15,000/year - Retirement savings: $20,000/year - Total personal income need: $291,300/year ($180,000 + $31,300 + $45,000 + $15,000 + $20,000)

Step 3: Add a Buffer¶

Build in margin for unexpected costs, slow months, and growth investment.

Recommended buffer: 10-20% of total

Example: - Operating costs: $51,600 - Personal income need: $291,300 - Subtotal: $342,900 - Buffer (15%): $51,435 - Total Revenue Needed: $394,335/year

Step 4: Determine Panel Size¶

Choose based on how you want to practice:

Example: Target panel of 500 patients

Step 5: Calculate Base Price¶

Annual Revenue Needed ÷ Panel Size ÷ 12 = Monthly Price

Example: - $394,335 ÷ 500 patients ÷ 12 months = $65.72/month

But wait—this assumes 100% adult patients at the same price. In reality: - Children are often priced lower - Family discounts reduce per-person revenue - Some patients choose annual plans (with discount)

Adjust for realistic patient mix:

Enrolling Medicare beneficiaries in a senior tier raises opt-out and private-contract requirements—see the Medicare Opt-Out Guide before pricing that tier.

Annual revenue: $42,500 × 12 = $510,000

This exceeds our $394,335 requirement, providing margin for: - Family discounts - Slow growth periods - Patients who leave - Annual plan discounts

Step 6: Validate Against Market¶

Now compare your calculated price against market data:

Research Methods: 1. DPC Frontier Mapper: Browse DPC practices nationally and in your area 2. Direct competition: Visit websites of nearby DPC practices 3. Regional cost of living: Adjust for local economics 4. Traditional care costs: What do uninsured patients pay out-of-pocket?

National DPC Membership Prices (State of DPC 2026 survey; 465 practices, data collected October-November 2024): - National average: $98.64/month - By region: West $113.28, Northeast $110.44, South $98.38, Midwest $80.36 - By setting: urban $110.00, rural $81.56

Source: State of DPC 2026 (DPC Alliance and Hint Health). The AAFP DPC overview cites a broader $50-$100/month range.

If your calculated price is: - Below market: You may have room to increase, or offer premium features - At market: Good validation of your pricing - Above market: Reconsider costs, panel size, or value proposition

Step 7: Test and Refine¶

Before finalizing:

Informal validation: - Describe your services and price to friends, family, potential patients - Gauge reactions—are they excited, hesitant, or dismissive? - Ask "Would you pay $X/month for this?" (be specific)

Competitive positioning: - If no local DPC: You have pricing flexibility - If local DPC exists: Decide to compete on price, value, or differentiation

Special Pricing Situations¶

Employer Contracts¶

Employers often expect volume discounts:

Typical employer pricing: - 10-20% below individual rates (typical convention; unsourced) - Per Employee Per Month (PEPM) structure - May include dependents at additional cost

Example: - Individual rate: $89/month - Employer rate: $75/month PEPM - Dependents: +$50/month each

Annual Payment Discount¶

Reward commitment with annual prepayment:

Typical discount: 10-15% (effectively 1-2 months free; typical convention, unsourced)

Example: - Monthly: $89/month ($1,068/year) - Annual: $949/year (11% discount)

Considerations: - Improves cash flow - Reduces payment processing fees - Requires clear refund policy - Must track different billing cycles

When to Raise Prices¶

Plan for price increases from the start:

Legitimate reasons to raise prices: - Annual inflation adjustment (2-4% is a common convention; unsourced) - Significant cost increases - Added services or value - Market repositioning - Reaching target panel (demand exceeds supply)

Best practices: - Give 30-60 days notice - Communicate reason clearly - Consider grandfathering existing patients temporarily - Raise prices for new patients first

Typical approach: - Year 1: Launch pricing - Year 2: Evaluate; small increase if justified - Ongoing: Annual review with modest adjustments

Common Pricing Mistakes¶

Mistake 1: Underpricing¶

Problem: Cannot sustain practice or deliver promised value.

Solution: Calculate true costs before setting price. Include your time value.

Mistake 2: Copying Competition Without Understanding¶

Problem: Their costs and goals may differ from yours.

Solution: Use market data as one input, not the sole determinant.

Mistake 3: Not Accounting for Ramp-Up¶

Problem: Early months have few patients but full costs.

Solution: Have adequate reserves; don't lower prices out of desperation.

Mistake 4: Complicated Pricing¶

Problem: Patients confused; harder to explain and administer.

Solution: Keep it simple. 2-4 price points maximum for most practices.

Mistake 5: Avoiding the Conversation¶

Problem: Uncomfortable discussing money; undersells value.

Solution: Practice explaining value confidently. Price reflects worth.

Pricing Worksheet¶

Use this worksheet to calculate your pricing:

1. Annual Operating Costs | Category | Amount | |----------|--------| | Rent | $ | | Utilities | $ | | EMR/Software | $ | | Supplies | $ | | Insurance (malpractice + general) | $ | | Professional services | $ | | Marketing | $ | | Other | $ | | Total Operating Costs | $ |

2. Personal Income Needs | Category | Amount | |----------|--------| | Desired take-home | $ | | Self-employment tax (15.3% × 92.35% of net profit; Social Security portion capped at the wage base) | $ | | Income tax (federal + state) | $ | | Health insurance | $ | | Retirement savings | $ | | Total Income Need | $ |

3. Total Revenue Calculation | Category | Amount | |----------|--------| | Operating costs | $ | | Income need | $ | | Buffer (15%) | $ | | Total Revenue Needed | $ |

4. Pricing Calculation | Input | Value | |-------|-------| | Target panel size | | | Revenue needed | $ | | Revenue ÷ panel ÷ 12 | $ | | Base monthly price | $ |

Checklist: Setting Your Prices¶

• Calculate all operating costs
• Determine personal income requirements
• Add appropriate buffer (10-20%)
• Choose target panel size
• Calculate base monthly price
• Design pricing tiers (age, family, etc.)
• Research local market pricing
• Validate calculated price against market
• Test pricing with potential patients
• Finalize pricing structure
• Document in membership agreement
• Create pricing presentation materials

Break-Even Calculator¶

Enter your planned membership fee, the variable cost each member adds, your fixed monthly overhead and the monthly take-home you want, and the calculator shows how many members cover overhead, how many reach your income target, and the annual revenue at that panel size. It runs the same formulas as the Break-Even Analysis Template: contribution margin is fee minus variable cost, and each member count is overhead (plus your target) divided by that margin, rounded up. Results update as you type; open the spreadsheet if you want to itemize the overhead line by line.

Defaults match the break-even spreadsheet template; they are illustrative, not benchmarks.

Resources¶

• Membership Models Comparison
• Pricing Calculator Template
• Startup Costs Overview
• DPC Frontier Mapper

Sources checked against primary law and agency guidance on 2026-09-22.

Next Steps¶

After setting your prices: - Membership Agreement Essentials - Document your pricing legally - Payment Processing Options - How to collect payments