Your floor price is the lowest monthly fee per member you'll accept from an employer. Work it out before the first meeting, from your cost per member and the time a new group takes. Then any discount talk has a limit, and you won't agree to a price in the room that you regret later.
Start with what a member costs you
Add up the costs that come with each member each month: included labs, supplies, card or ACH fees, software charged per member, and any included medications. Divide by your member count. That's your direct cost per member.
Add a share of your time
Members use your time. If a new group fills open appointment slots, that time has little extra cost. If it forces a hire, the hire's cost has to be covered. This post shows how to price a hire.
Decide what it has to contribute
A member's fee minus their direct cost is what they contribute to rent, staff and your pay. Your floor is the price where that contribution is still worth the time and the risk.
In a made-up example, your direct cost is $18 a member and you want each employer member to contribute at least $40. Your floor is $58. If a broker takes $5 a member, the floor is $63.
Check it against capacity
If the group would take slots your full-price members need, the floor should be close to your regular price. A discount only makes sense when the group fills time you'd otherwise leave empty. This post covers capacity.
Test it at higher use
An employer group may use more care than you expect. Run your floor at 25% higher use. If the contract still works, you have room. If it doesn't, raise the floor or limit enrollment.
Write it down
Put your floor price in your notes before every negotiation. Don't share it. When an employer asks for a lower number, you can say yes, no or "not below this" without guessing.
What I'd do this week
- Pull last quarter's direct costs and divide by your average member count.
- Decide the minimum contribution per member you'll accept.
- Write down your floor, with and without a broker fee.
Common questions
Should my floor be the same for every employer?
Mostly. Raise it for groups you expect to use more care or that take more admin.
What if the employer's budget is below my floor?
Offer less, like fewer included services or a smaller eligible group, rather than the same service for less.
How often should I update it?
Every year, and after any change in your costs, like a new lab contract or software price.
Want a cost per member you can trust?
We reconcile every account every month and send your P&L and Balance Sheet by the 15th, so decisions like this start from real numbers. If that's what you need, apply to work with us.