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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 telemedicine industry, selecting the right pricing model isn't just a financial decision—it's a strategic one that can determine your company's growth trajectory and customer retention. As telemedicine SaaS solutions continue to transform healthcare delivery, providers face a critical question: should you charge per seat, per transaction, or based on outcomes?
The Current State of Telemedicine SaaS Pricing
The telemedicine market is projected to reach $460 billion by 2030, growing at a CAGR of 24.4% according to Grand View Research. Yet despite this explosive growth, many telemedicine platforms struggle with pricing strategies that don't align with their value proposition or customer needs.
According to a 2023 OpenView Partners survey, 61% of SaaS companies are now incorporating some form of usage-based pricing into their models, up from 34% in 2018. This trend is increasingly relevant for telemedicine platforms where usage patterns vary dramatically across different healthcare providers.
Breaking Down the Three Primary Pricing Models
Per Seat Pricing
This traditional SaaS pricing metric charges based on the number of users (typically providers or administrators) who access the platform.
Advantages:
- Predictable recurring revenue
- Simple for customers to understand
- Easier budgeting for both provider and customer
Disadvantages:
- Doesn't align with actual platform utilization
- Can create friction for healthcare organizations scaling their telehealth initiatives
- Might incentivize account sharing, reducing revenue potential
Per seat pricing works best for telemedicine platforms focused on provider collaboration or those with consistent usage patterns across users. For instance, a telemedicine platform specializing in psychiatric consultations might charge $200-300 per provider monthly, as each psychiatrist typically handles a similar patient load.
Per Transaction Pricing
This usage-based pricing approach charges based on the number of telehealth consultations, messages, or other measurable transactions.
Advantages:
- Direct alignment with platform utilization
- Scales proportionally with customer success
- Lower barrier to entry for smaller practices
Disadvantages:
- Revenue may fluctuate with seasonal demand
- Can create budget uncertainty for healthcare organizations
- May discourage platform use during slower periods
Transaction-based models are particularly effective for platforms serving multiple specialties with varying consultation lengths. According to Healthcare Information and Management Systems Society (HIMSS), practices implementing transaction-based telehealth solutions reported 22% better resource allocation compared to flat-fee models.
Outcome-Based Pricing
This value-based pricing approach ties costs to measurable healthcare outcomes, such as reduced readmissions, improved patient satisfaction scores, or specific clinical metrics.
Advantages:
- Perfect alignment with healthcare's shift toward value-based care
- Demonstrates confidence in platform effectiveness
- Can command premium pricing when outcomes are achieved
Disadvantages:
- Complex to implement and measure
- Requires sophisticated data integration (often via HL7 FHIR standards)
- Longer sales cycles due to more complex value proposition
Outcome-based pricing remains the least common but potentially most disruptive approach. A notable example is Omada Health, which charges some clients based on patient engagement and clinical improvements, resulting in 30% higher customer retention compared to their legacy pricing models.
Decision Framework: Finding Your Ideal Pricing Metric
When determining the optimal pricing strategy for your telemedicine SaaS, consider these five crucial factors:
1. Customer Segment and Size
Enterprise healthcare systems have different purchasing behaviors than small practices. Research from KLAS Research indicates that 72% of large health systems prefer enterprise pricing with predictable budgeting, while smaller practices overwhelmingly prefer transaction-based models that minimize upfront costs.
2. Usage Patterns and Frequency
Analyze how your platform is actually used. Is it for daily ongoing care, occasional specialist consultations, or something in between? Platforms supporting high-frequency, short-duration consultations often perform better with transaction models, while those supporting complex care coordination may benefit from seat-based approaches.
3. Technical Integration Requirements
HIPAA compliance and HL7 FHIR integration capabilities significantly impact implementation costs. According to Black Book Market Research, healthcare providers cite implementation costs as the second most important factor when evaluating telemedicine platforms.
Consider whether your pricing needs to account for:
- Integration complexity with different EHR systems
- Customization requirements
- Data migration services
4. Value Measurement Capabilities
Can you reliably measure the outcomes your platform enables? Do you have access to the necessary data? Outcome-based pricing requires robust analytics capabilities and access to clinical data that may not be readily available without deep EHR integration.
5. Competitive Landscape
According to a Chilmark Research report, 68% of telemedicine providers now offer multiple pricing options rather than a one-size-fits-all approach. The flexibility to offer tiered pricing with appropriate price fences has become a competitive necessity.
Hybrid Approaches: The Emerging Best Practice
Rather than choosing a single model, leading telemedicine platforms are increasingly adopting hybrid approaches:
- Core + Usage: A base subscription fee plus transaction-based charges above certain thresholds
- Tiered Outcomes: Transaction-based pricing with discounts triggered by achieving specific outcomes
- Specialty-Specific Tiers: Different pricing structures for different medical specialties based on their unique value propositions
Amwell, a leading telemedicine provider, implements a hybrid model that includes a base platform fee with additional per-visit charges, resulting in 28% higher customer lifetime value compared to their previous flat-rate model.
Implementation Considerations
When implementing your chosen pricing strategy:
Start with a pilot: Test your pricing model with a small subset of customers before rolling it out broadly
Build in measurement tools: Ensure you can track the metrics that matter for your pricing model
Create clear price fences: Define boundaries between different pricing tiers to prevent revenue leakage
Develop a discounting strategy: Establish guidelines for when and how much to discount, particularly for enterprise customers
Plan for transitions: Map out how existing customers will migrate to new pricing models
Conclusion: The Right Model Aligns With Your Unique Value
The most effective pricing model for your telemedicine SaaS solution will depend on your unique value proposition and customer base. While per-seat models provide predictability, transaction-based approaches align better with actual usage, and outcome-based models represent the future of value-based healthcare.
Most successful telemedicine platforms are moving toward hybrid models that combine elements of all three approaches, creating flexibility while maintaining alignment with how their solution delivers value in the healthcare ecosystem.
As you evaluate your pricing strategy, remember that the right metric isn't just about maximizing short-term revenue—it's about creating sustainable alignment between your success and your customers' success in delivering better healthcare outcomes through technology.