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Professional services

Medical Practice Subscription Revenue Calculator

Works subscription revenue, where churn decides the base more than new sign-ups do.

Your numbers

$
$
%
$
Repairs and replacements members buy because you are already there.
%

Result

Recurring revenue $0
Profit on the agreements $0
Profit on pull-through work $19,836
Total gross profit $19,836
Members still there next year 137
$0 of recurring revenue, earning $0 on the agreements themselves and $19,836 on the work members bring back. The second number is usually the reason to sell them.

Agreements often earn little on the fee alone. They are worth having for the access, the retention and the work members buy without shopping around, so judging them on the fee margin alone undervalues them.

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How the calculation works

Subscribers times the monthly fee, less delivery cost, giving monthly recurring contribution, with churn applied to show the base remaining over time. The arithmetic that matters is that churn compounds: a base losing a steady share each month needs a continual inflow simply to stand still, and growth requires exceeding that before anything accumulates.

What moves the number

  • Monthly churn, which compounds against the base.
  • Fee and the cost of delivering what is included.
  • New subscribers per month.
  • Whether the included services are used as expected.

Where this one goes wrong

Reducing churn is worth more than adding subscribers, because every retained subscriber removes the need for a replacement and the effect compounds, whereas a new subscriber only replaces a lost one. Measure why people leave rather than only how many. The compliance considerations that apply to any periodic-fee arrangement in healthcare apply here too, including what the fee may cover for patients with existing coverage, which belongs with counsel before the offering exists.

Before you quote

  • Measure churn and its reasons, not just sign-ups.
  • Model the base over time, not just the current month.
  • Obtain legal review of what the fee may include.

Where the rules come from

Questions

About this calculator

Why does churn matter more than new sign-ups?

Because it compounds. A base losing a steady share monthly needs continual inflow just to stand still, so each retained subscriber removes the need for a replacement while each new one only fills a gap. Reducing churn improves every future month.

What causes subscribers to leave?

Usually not using what they are paying for, or being unable to access it when they want to. Both are measurable and both are fixable, which is why asking departing subscribers is worth more than any projection of future sign-ups.

Are there rules on subscription fees in healthcare?

Yes, and they turn on what the fee covers and the patient's existing coverage. Periodic-fee arrangements can implicate payer contract terms, programme rules and state insurance regulation, so the structure needs legal review before the offering exists.

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The formula

recurring revenue = members x annual fee; total profit adds the margin on pull-through work

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How to use this calculator

  1. Agreements in force. Enter your own figure; the page starts at 180.
  2. Annual fee ($). Enter your own figure; the page starts at $0.
  3. Cost to deliver one ($). Enter your own figure; the page starts at $0.
  4. Renewal rate (%). Enter your own figure; the page starts at 76%.
  5. Extra work per member per year ($). Repairs and replacements members buy because you are already there.
  6. Margin on that work (%). Enter your own figure; the page starts at 58%.

The result updates as you type, so you can try a figure, see what it does to recurring revenue, and change it back. Nothing you enter is sent anywhere or saved.

A worked example

These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.

What goes in

InputValue
Agreements in force180
Annual fee$0
Cost to deliver one$0
Renewal rate76%
Extra work per member per year$190
Margin on that work58%

What comes out

ResultValue
Recurring revenue main result$0
Profit on the agreements$0
Profit on pull-through work$19,836
Total gross profit$19,836
Members still there next year137

$0 of recurring revenue, earning $0 on the agreements themselves and $19,836 on the work members bring back. The second number is usually the reason to sell them.

What each figure means

Agreements in force
A number, between 0 and 100000, starting at 180.
Annual fee ($)
A money amount, starting at $0.
Cost to deliver one ($)
A money amount, starting at $0.
Renewal rate (%)
A percentage, between 0 and 100, starting at 76%.
Extra work per member per year ($)
Repairs and replacements members buy because you are already there.
Margin on that work (%)
A percentage, between 0 and 95, starting at 58%.

What the results tell you

ResultWhat it is
Recurring revenueThe headline result. A money figure.
Profit on the agreementsA money figure.
Profit on pull-through workA money figure.
Total gross profitA money figure.
Members still there next yearA number.

Estimating is the easy part

The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.