Many nurse practitioners have difficulty determining how to price their services. I seriously see this question being posted over on The Elite Nurse Practitioner Facebook Group page daily… Listen, your pricing should be based off your revenue and income goals. What does this mean?
If you want to make $10,000 a month in profit from your niche side practice (TOTALLY DOABLE…), then you need to price your services in a way that will result in achieving your income goal.
What number is this?
Whatever allows you to profit at least $100 from each patient monthly. It is that simple.
Every nurse practitioner niche side practice should result in a $100 monthly profit per patient. This doesn’t matter if it is cash or insurance based… your goal should be $100 per month per patient.
Why $100? Because it is the amount needed to generate a profit to make it worth your time.
This $100 number is the amount generated AFTER the per patient expense, which is YOUR cost to treat the patient (the cost of the IV supplies, testosterone prescription, weight loss peptide, or whatever it is you are providing.).
For example, at my men’s health practice, it costs me approximately $36 a month to treat the patient when you factor in the cost of the testosterone, shipping, syringes/needles, and the HCG. I charge $170 monthly for both testosterone and HCG together. Therefore, my monthly profit per patient is $134. Yes, more than the $100 goal, but I have increased my prices to keep up with inflation recently. Regardless, $100 should be the goal. Anything less than that will be difficult to maintain unless you have a HUGE volume of patients, but remember, you only need 100 patients to be successful…
Let us run a simplistic volume and revenue projection based off the $100 monthly goal:
Niche side practice: Wellness practice that provides hormone replacement therapy, weight loss, and IV infusions.
Average monthly revenue per patient: $160
Average monthly volume: 120 patients
Expenses per patient: $60
Average profit per patient after $60 in expenses: $100
Average monthly revenue: $19,200
Average monthly profit: $12,000
Now, if you were not pricing your services appropriately and were only generating $120 in revenue per patient with the same numbers above, your monthly per patient profit would drop to $60 and your overall profit would drop to $7,200. A significant amount from a difference of just $40!
We aren’t factoring in the expenses of the practice either here. Let us assume that rent, marketing, utilities, insurance, and payroll cost you $5,000 a month. At a $100 monthly per patient profit, you are now bringing in $7,000 a month that goes into YOUR POCKET. At a $60 monthly per patient profit on the other hand, you are only bringing in $2,200 a month! Hell, at that rate you might as well just pick up a couple PRN shifts and skip the headache of running a practice!
Do you see why it is vitally important to strive to make $100 in profit per month per patient? Anything less simply does not make it worth your while unless you have a high patient volume. Most of you will not, therefore you should strive for a higher profit margin.
You can obtain $100 per month per patient by implementing niche services into your practice, by utilizing a subscription-based model of payment, by putting patients on automatic payment plans, and by ultimately providing VALUE to your patient. Even if you do IV infusions, you should have a subscription plan where patients receive one IV monthly for $130 a month. This would result in a $100 profit. It really does not matter what service you are providing; any nurse practitioner should be able to generate a $100 monthly profit per patient.
There is no difference with an insurance accepting practice either… I remember my old primary care MD wanted to see me every 3 months (he would bill a level 4 visit, which resulted in about a $180 payout) and he would always try to do some sort of extra “procedure” to increase billings (steroid shot during allergy season, strep/flu testing, removal of a mole, etc.). Jeez, I was so naïve… Nevertheless, if you run the math, it was still resulting in about $100 per month of profit!
So, if you are having trouble determining how to price your services or trying to figure out how much you should be making a month, try to hit that $100 monthly per patient profit! Everything will fall into place if you do so!