When it comes to launching and growing a successful cash-pay medical practice, one of the most critical decisions you’ll make is setting your pricing. Your rates not only reflect the value of your services but also determine the type of patients you’ll attract and the financial sustainability of your practice.

At Otto Health, when we collaborate with practices, we work through several practice design exercises and conduct extensive market research to inform pricing. This guide walks through some of the key elements we consider when establishing prices so you can run this exercise independently.

1. Understand your costs

Before setting any prices, try to get an understanding of what it will cost to deliver your care. This should include everything from supplies to software – consider costs like medical malpractice insurance, legal fees, recurring subscriptions, marketing costs, and the like. Once you know your total monthly overhead, you’ll be able to calculate the minimum income your practice needs to generate to start in order to break even.

Action step: Create a detailed list of all your ongoing and one-time expenses. Keep this list in an easy-to-access place so you can quickly update it as your expenses change! We recommend starting simply with a Google Spreadsheet and adding additional software only as needed.

2. Research your market

While you are able to freely set prices as a cash-pay practice owner, you want to remain competitive within your local market and offer a great value for patients. Look at what other cash-pay practices in your area are charging, especially those offering similar services in weight loss, preventive care, lifestyle medicine, hormone health, and the like.

Action step: Do a Google search like “{practice focus} {practice city} cash pay prices” to find practices operating in similar areas as yours. Review websites, call offices, or schedule a meeting with a provider to better understand their offerings and pricing.

3. Research national offerings

At Otto, we often discuss the value of focusing locally, especially when you’re just starting up your new practice. At the same time, it can be helpful to have an understanding of the costs of similar services in the broader market. You might notice in some cases that larger organizations cost less than local businesses. Before lowering your prices to “compete” with these larger players, evaluate the quality and depth of care you’re offering compared to them. It is far less common for larger companies to offer in-person care, and especially rare for patients to have access to the same provider every visit, so you may find that you have an edge on these companies given your offerings.

Action step: Look for national or multi-state organizations that are delivering similar kinds of care to your practice. Take note of their pricing, their service list, and their product/service positioning.

4. Consider your value prop to patients

Your pricing should reflect the value your practice brings to patients. If you provide a personalized, high-touch experience or innovative treatments that aren’t readily available elsewhere, you may be able to justify charging premium rates. However, this is only appropriate if your patients understand and feel the value of your offering. Make sure your marketing materials and patient journey capture the breadth and depth of your services.

Action step: Reflect to define your value proposition and ensure that the prices you’re considering align with the value of your offerings.

5. Evaluate different pricing models

There are many pricing models you can adopt in a cash-pay practice. A few of the most common options we see include:

• Membership-based: Patients pay a recurring fee (monthly, quarterly, annually) for ongoing care. This model can provide a predictable revenue stream and encourages patient loyalty.

• Packaged deals: Patients pay a one-time fee for a bundle of services, such as a weight loss program or a hormone balancing plan. This approach can be simple for patients and increase revenue per patient.

• Fee-for-service: Patients pay for each visit or treatment individually. This is straightforward, but requires a steady flow of new and returning patients.

Depending on the scope of your practice, you may end up offering a combination of models to accommodate different services and patient preferences.

Action step: Decide which pricing models best align with your practice offerings, business goals, and the needs of your patient population. 

6. Trial pricing tiers

For some types of care, different service tiers appeal to a broader range of patients. For example, a basic weight loss consultation might include just the essentials, while a premium package could offer more comprehensive diagnostics, personalized meal planning, and ongoing support.

Action step: Brainstorm 2-3 pricing tiers for your services, ensuring that each higher price point offers clear additional value.

7. Prioritize pricing communication

In a cash-pay practice, transparency is key. Since your patients are paying out-of-pocket, they will expect to understand exactly what they’re getting for their dollars. Take the time to break down your services and costs clearly, emphasizing the value for patients.

Action step: Check all of your patient-facing surfaces (e.g., website, consultation calls, marketing materials) to ensure you have clearly communicated the benefits of your services.

8. Test and adjust your pricing

Once you’ve set your initial pricing, be open to adjusting it based on patient feedback, market conditions, and the financial health of your practice. If you notice that patients are hesitant to book at your rates, you may need to add more value, change the pricing model, or offer more flexible payment options.

Action step: Monitor your practice’s revenue and patient satisfaction regularly. Don’t be afraid to experiment with pricing to find the right balance between profitability and accessibility.

Setting the right prices for your cash-pay practice is a balance between understanding your value, your costs, and your patients. Take the time to research and experiment, ensuring that your prices reflect the quality of care you provide and make your practice financially sustainable.

At Otto Health, we provide technology and hands-on support to help cash-pay practices thrive. If there is anything we can do to be helpful as you decide on practice pricing, don’t hesitate to reach out!