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Frameworks, core principles and top case studies for SaaS pricing, learnt and refined over 28+ years of SaaS-monetization experience.
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In the rapidly evolving healthcare landscape, telehealth and virtual care services have transformed from pandemic necessities to permanent fixtures in modern healthcare delivery. For providers and health tech companies, establishing the right pricing structure is critical not just for profitability, but also for patient accessibility, market expansion, and long-term sustainability.
The Current State of Telehealth Pricing
Virtual care has grown from a $3 billion market in 2019 to over $20 billion in 2023, according to McKinsey & Company. As the market matures, pricing models are evolving beyond simple fee-for-service approaches to more sophisticated subscription-based frameworks.
Why is this shift happening? Subscription models offer predictability—for both providers calculating revenue and patients managing healthcare costs. According to a 2023 Rock Health report, approximately 64% of consumers prefer fixed, predictable healthcare costs over variable pricing.
Key Telehealth Pricing Strategy Considerations
Before diving into specific models, let's examine the crucial elements affecting your telehealth pricing strategy:
1. Target Audience Definition
Your ideal pricing model depends largely on who you're serving:
- Direct-to-consumer: Individual patients paying out-of-pocket
- Employer-sponsored: Organizations offering telehealth as an employee benefit
- Payer partnerships: Insurance companies incorporating your service
- Provider networks: Healthcare systems extending their reach
Each audience has different price sensitivities, value perceptions, and payment mechanisms.
2. Service Scope Clarity
Be explicit about what's included in your virtual care subscription:
- Types of consultations (primary care, specialty, urgent care)
- Communication channels (video, chat, email)
- Response time guarantees
- Prescription services
- Integration with in-person care
- Follow-up capabilities
According to JAMA Network Open research, services with clearly defined scope experience 37% less customer churn than those with ambiguous offerings.
3. Value-Based Differentiation
Your pricing should reflect your unique value proposition:
- Convenience factors
- Provider credentials and specialization
- Technology sophistication
- Care coordination capabilities
- Outcomes data
- Patient experience metrics
Popular Telehealth Subscription Models
Monthly Membership Model
Structure: Patients pay a fixed monthly fee for unlimited access to defined services.
Example: One Medical offers membership at approximately $199/year plus per-visit fees.
Best for: Primary care-focused services with frequent patient interactions.
According to a 2023 J.D. Power survey, 72% of patients who use telehealth more than 4 times annually prefer subscription models over pay-per-visit pricing.
Tiered Subscription Packages
Structure: Multiple subscription levels offering different service scopes at escalating price points.
Example: Teladoc Health offers different plans ranging from basic urgent care to comprehensive primary and specialty care access.
Best for: Diverse patient populations with varying needs or services that naturally segment into basic and premium offerings.
Pay-Per-Visit with Membership Discount
Structure: Baseline membership fee with discounted per-visit rates.
Example: MDLive charges a membership fee that provides discounted rates on virtual visits.
Best for: Services with variable utilization patterns or when transitioning from pure fee-for-service.
Telemedicine Retainer Model
Structure: Upfront payment for access to a specific provider or team for a defined period.
Example: Specialty concierge medicine platforms where patients retain dedicated physician access.
Best for: High-value specialty care or services with emphasis on continuity and relationship.
Family Plans
Structure: Single subscription covering multiple family members at a discounted rate.
Example: Amwell offers family plans covering multiple members at rates lower than individual subscriptions.
Best for: Consumer-focused platforms targeting household decision-makers.
Pricing Psychology for Recurring Health Service Pricing
The way you present your pricing influences both conversion and retention:
Emphasize Value Over Cost
Frame your recurring health service pricing in terms of what patients gain rather than what they pay. According to Deloitte's healthcare consumer survey, 61% of patients evaluate telehealth services based on perceived value rather than absolute price.
Leverage Annual Pricing Options
Offering annual payment with a discount (e.g., "12 months for the price of 10") can improve cash flow and reduce churn. Data from subscription economy expert Zuora shows healthcare subscriptions with annual options experience 18% less churn than monthly-only offerings.
Use Anchoring Effects
Present your preferred plan alongside options that make it appear more attractive. This psychological pricing technique has been shown to increase conversion to mid-tier plans by up to 25% according to subscription pricing platform ProfitWell.
Implementation Best Practices
1. Test Before Full Deployment
Pilot your pricing model with a segment of your market before full rollout. According to a KLAS Research report, telehealth providers who tested pricing models before full implementation were 43% more likely to meet revenue targets in the first year.
2. Build in Flexibility
Design your subscription framework to accommodate future changes:
- Grandfather existing subscribers when prices increase
- Create clear upgrade/downgrade paths
- Establish transparent billing cycles and renewal processes
3. Monitor Key Metrics
Track these essential indicators to evaluate your model's effectiveness:
- Customer Acquisition Cost (CAC)
- Lifetime Value (LTV)
- Monthly Recurring Revenue (MRR)
- Churn rate
- Utilization patterns
- Upgrade/downgrade frequency
Common Pitfalls to Avoid
Underestimating Implementation Costs
Many organizations fail to account for the technical and operational infrastructure needed to support subscription billing.
Neglecting Regulatory Considerations
Telehealth pricing models must navigate complex healthcare regulations that vary by location. Engage legal experts early to ensure compliance with:
- Insurance regulations
- Medicare/Medicaid requirements
- Anti-kickback provisions
- State-specific telehealth laws
Overlooking the Competition
According to a 2023 American Telemedicine Association survey, 82% of telehealth providers consider their market "highly competitive." Regularly benchmark your pricing against competitors to remain competitive.
Case Study: Teladoc's Evolution of Pricing Models
Teladoc Health, one of the largest telehealth providers, has evolved its pricing approach multiple times:
- Initial model (pre-2018): Simple per-visit pricing with some subscription options for large employers
- Mid-market expansion (2018-2020): Introduction of tiered subscriptions with varying service levels
- Post-pandemic approach (2021-present): Sophisticated value-based pricing incorporating outcomes measures and ROI data
This evolution corresponded with Teladoc's growth from a $1.8 billion company in 2018 to over $7.5 billion in 2023.
Conclusion: Finding Your Optimal Virtual Care Subscription Model
The ideal telehealth pricing strategy balances several factors:
- Patient willingness to pay
- Competitive landscape
- Service delivery costs
- Value proposition uniqueness
- Target utilization patterns
Remember that pricing is not a static decision but an evolving process requiring regular reassessment and adjustment. By carefully structuring your virtual care subscription model around clear value delivery, appropriate scope, and target audience needs, you position your telehealth service for sustainable growth in an increasingly competitive market.
For telehealth providers looking to refine their approach, start by evaluating your current pricing against customer acquisition costs, satisfaction metrics, and utilization patterns. This data-driven approach will guide you toward a subscription model that benefits both your organization and the patients you serve.