This is the second in a three-part series on selling, scaling, and succeeding in healthcare—distilled from the class I teach at Texas Medical Center Innovation, Plug and Play, TechStars, and other accelerators nationwide. In Part 1, we mapped healthcare's multi-actor buying process and learned why deep understanding beats pitch decks when you're selling into institutions where everyone can say "no."
Now we're getting tactical: how to design revenue models that align your upside with buyer incentives, survive compliance review, and actually close. You'll get the five-step framework I use with founders to turn pricing from guesswork into strategy—covering everything from PEPM structures that work with payers to FTE-equivalent models that make sense when AI replaces labor.
In Part 3, we'll close the loop with pilot design: how to engineer paid validation programs with buyer-aligned metrics and pre-wired contract paths that convert to system-wide deals without starting procurement from scratch.
Each piece builds on the last, but you can jump in anywhere. If you're still figuring out the healthcare buying maze, start with Part 1. If you've got pilots running but need help scaling them into real contracts, skip ahead to Part 3. If you're here because your pricing feels like guesswork and buyers keep asking for "different terms," you're exactly where you need to be.
Hook: Pricing isn't the point—alignment is
You can copy a competitor's per-unit price, or even undercut them, and still lose. In healthcare, the right revenue model aligns your upside to the buyer's reality—budget, reimbursement dynamics, internal politics—and avoids compliance landmines. Here's the five-step framework I use with founders to design models that close and scale.
Step 1: Define what you sell (atoms, not aspirations)
Not the promise—the product. Is it a SaaS platform, clinical service, device/diagnostic, data asset, staffing solution, or a bundle? Precision matters because it drives:
- Who can buy it and out of which budget line?
- What kind of agreement do you need (SaaS license, services, device purchase, data license)?
- Which laws apply (e.g., SaMD)?
If your champion can't classify you, procurement or legal will do it for them—and not always in your favor.
Step 2: Define who uses, who benefits, who pays (and why)
In healthcare, the user, the beneficiary, and the payer are often different entities. Map each clearly:
- User: Who logs in or touches the device or software?
- Beneficiary: where does value accrue (department, plan, employer, patient)?
- Payer: who pays for it (commercial insurer, employer, provider)?
Now answer the only question that matters: Why would that payer pay you now? Your model should make that answer obvious.
Step 3: Choose the model that fits the incentive (not your spreadsheet)
You don't need every price book under the sun. You need two or three models that make it easy for your buyer to say yes and simple for their CFO to budget.
Common models and when they win:
- Fee-for-Service (per use/test/patient): Easy when CPT exists or you replace a per-use cost. Misaligned for capitated, global payment, bundled, shared savings (e.g., ACOs), or total cost of care buyers unless you lower unit cost.
- Subscription/License (monthly/annual): Great for platforms and predictable budgets; beware subscription fatigue; watch concierge/direct primary care (DPC)/retainer nuances.
- PEPM/PMPM: Scales with covered lives; strong with payers/employers/population health—requires consistent value delivery.
- Flat rate tiered: Transparent and CFO-friendly; monitor utilization risk.
- Value-based / outcomes / shared savings: Alignment nirvana when you can measure rigorously and survive the downside—often data-intensive.
- FTE-equivalent (AI replaces labor): Peg price to headcount displacement or reallocation value. Clean story when labor is the top line item, causing your customer stress.
- Hybrids: For example, start simple (base fee) + add upside (bonus for hitting metrics) after trust/evidence.
Filters to pick (or prune) options:
- Risk appetite: Can you carry downside for six months? If not, don't.
- Buyer muscle memory: Don't make them invent a new category or contract process for you.
- Measurability: If you can't prove value, don't price on it (yet).
- Speed to yes: The "good enough now" model often beats the "perfect later" model.
Step 4: Run the compliance gauntlet before you quote
Nothing kills momentum faster than discovering your clever rev-share looks like an AKS problem. Sanity-check:
- Fraud & Abuse: revenue shares, referral-linked compensation, percentage of collections—red flags with federal program exposure.
- Beneficiary inducement: don't "gift" value to patients that drives reimbursed utilization.
- Fee-splitting & influencer/affiliate deals: structure carefully or skip.
- Privacy/Data rights: HIPAA + stricter state laws; if you buy/ingest data, your broker terms can be an existential risk if ignored.
- SaMD/Device: if you inform diagnosis/treatment, expect validation/quality obligations; if not, FDA clearance.
- AI: transparency, explainability, safety, effectiveness, and bias controls aren't just ethics—they're part of the sales checklist now.
You're not dodging complexity—you're using it to build trust.
Step 5: Encode it on paper that accelerates the deal
Your contract is the execution layer of your model. It should:
- Mirror your model exactly (billing triggers, metrics, data flows).
- If pilot-first is the only option, include a pilot-to-production glide path.
- Reduce redlines with buyer-familiar constructs (SaaS terms, BAA attachments, security exhibits, data use maps).
- Signal competence (clean definitions, no borrowed franken-templates).
Bad paper can add 3–6 months. Great paper shortens the sales cycle and makes procurement your ally.
Examples of practical combos that win:
- Hospital service line: Flat base + add-ons or per-use with a cap
- Payer SaaS + Services: PMPM with minimums + performance bonus for agreed savings measures; audit rights and attribution language they trust.
- Employer benefit: PEPM + engagement targets; renewal bonus if metrics not met.
- AI workflow: FTE-equivalent anchored to baseline labor costs; shared upside
Evolve on purpose
Start with the simple, CFO-friendly path that gets you in. Earn the right—via measured outcomes—to layer in upside. Communicate that roadmap at the first meeting so stakeholders know you're building toward win-win.
Key Takeaways
- Precision about "what you sell" and "who pays/benefits" is your pricing superpower.
- Pick models that match buyer incentives, purchasing muscle memory, and your ability to prove value.
- Pre-clear compliance; design for HIPAA/AKS/Stark/data rights/AI from day one.
- Contracts are go-to-market—write them to glide from pilot to production.
Want help choosing (and papering) a model your buyers can approve this quarter? Let's whiteboard it and build your accelerated contract stack.