In-House Membership Plan Revenue

An in-house membership plan gives patients without insurance a simple way to pay for routine care and a discount on treatment. For the practice, it creates steady monthly revenue and keeps patients coming back. This calculator models what a plan earns: the membership fees, the cost of delivering the included care, admin costs and the treatment members go on to accept.

What this calculator does

Enter the number of members, the average monthly fee, your cost to deliver the included care per member, the share of members who use it, other treatment per member per year at full fees, the member discount, your profit margin on treatment and admin costs per member. It shows:

• the total yearly profit from the plan and member treatment,
• membership fee revenue,
• profit on fees after included care and admin,
• profit on members' other treatment, and
• profit per member per year.

The formula in plain English

Fee revenue = members × monthly fee × 12.

Plan profit = fee revenue − (members × cost to deliver included care × usage rate) − (members × admin cost × 12).

The cost to deliver is your real cost (hygienist time, supplies and the doctor's exam time), not your fees.

Treatment revenue = members × treatment per member × (1 − discount).

Treatment cost = members × treatment per member × (1 − margin).

Treatment profit = treatment revenue − treatment cost. The discount comes straight out of profit, because the cost of the work doesn't change.

Total profit = plan profit + treatment profit.

A worked example

Dr. Ramirez has 300 members paying an average of $32 a month. Delivering the included care costs about $160 per member per year, and 85% of members use it. Members get 15% off other treatment, which averages $450 a year per member at full fees, with a 45% margin. Plan software costs $1.50 per member per month.

• Fee revenue: $115,200 a year.
• Plan profit after included care and admin: $69,000.
• Treatment profit: about $40,500.
• Total: about $109,500, or about $365 per member each year.

Many of these patients might otherwise come in only when something hurts. The plan turns them into regular patients with predictable revenue.

Why it matters at each career stage

If you're: Practice owner

A membership plan is one of the best tools for reducing PPO dependence. Offer it to uninsured patients and to patients who'd lose coverage if you leave a network. Train the front desk to explain it in one or two sentences.

If you're: Employed

If you're an associate, a membership plan in your office means more patients who come in regularly and accept treatment. Ask how plan patients are scheduled and how you're paid on discounted treatment.

Making a plan work

Keep it simple. One adult plan, one child plan and maybe a periodontal plan are enough for most offices.

Make the value obvious. Show patients what the included care would cost at full fees.

Automate billing. Recurring card payments reduce admin and late payments.

Track members. Watch sign-ups, cancellations and treatment acceptance among members.

Review pricing yearly. As your costs rise, adjust fees for new members and at renewal.

Who joins, and why it matters

Plans tend to attract patients who already value regular care, which is good for retention. But if members use far more included care than expected, or mostly join for one big treatment at a discount, your margin drops. Watch usage in the first year and adjust the plan if needed.

Next, see how a plan fits with dropping a PPO, estimate new patient value, or check hygiene profitability.