Pricing for telemedicine services: How to Understand COGS, CAC, and Margin Before You Launch

Telehealth offers clear cost benefits with proper implementation. A telehealth visit costs just $40 to $50, compared to $136-$176 for in-person acute care. Outside insurance, telemedicine visits average $79 - this is a big deal as it means that traditional office visits at $139 and emergency room visits at $645. Many telehealth businesses still struggle to make money because they lack solid pricing strategies.

Telehealth adoption has skyrocketed. The number of Americans using these services jumped from 11% in 2019 to 46% in 2020. Setting the right price remains challenging for healthcare entrepreneurs. They must factor in provider fees, medication costs, platform expenses, and customer acquisition costs to determine a viable pricing strategy.

This piece breaks down the essentials of COGS, CAC, and margin calculations for telemedicine services. These pricing foundations will help your business thrive beyond its first year. You'll learn to build a telehealth platform that grows sustainably and generates consistent profits, whether you're starting fresh or improving an existing service.

Key Takeaways

• Know your math: COGS (providers, meds/labs, platform, support) + CAC → margin reality.
• Target LTV: CAC greater than or equal to 3:1 and 12-month payback (so growth doesn’t sink cash flow).
• Price from unit economics: visit, subscription, or bundle—don’t copy competitors.
• Bundles beat à-la-carte: include follow-ups to protect contribution margin.
• CAC drops fast with proof (outcomes), a crisp offer, low eligibility friction, and speed-to-care.
• Model by channel: blend SEO/partnerships (lower CAC) with paid (scalable) and reallocate weekly.
• Use scenarios: low-ticket async visits need volume; subscriptions smooth revenue; med-heavy care must track drug/fulfillment costs.
• Simple formula to publish pricing: Price = COGS + Target CAC + Margin Buffer.

Core terms you must understand before pricing telemedicine services

Your telemedicine business can fail quickly if you don't get the pricing math right. Let's get into four simple financial metrics that will help you survive in this competitive space.

COGS: provider fees, pharmacy/medication, fulfillment, platform, labs, support

Cost of Goods Sold includes all direct costs needed to deliver your telehealth service. Telemedicine businesses typically pay for provider compensation, medication costs, shipping and fulfillment expenses, technology platform fees, laboratory testing, and customer support costs. Getting your COGS calculation right is vital because it forms the foundation of your gross margin calculation.

CAC: ads, creators/influencers, affiliates, sales costs

Customer Acquisition Cost shows how much you spend to get each new patient. The simple formula works like this: CAC = Total sales & marketing expenses ÷ Number of New Patients Acquired. This number changes a lot based on specialty and marketing channel. To name just one example, organic acquisition costs range from $147 for dermatology to $686 for neurology practices. Paid acquisition costs can reach $1,113 for neurology.

Marketing channels have different costs as well. Email marketing averages $256, SEO costs about $321, and traditional Radio/TV ads cost $449 per patient. Most telehealth businesses should use $150 per new patient as their starting CAC.

LTV: refills, subscriptions, retention, add-ons

Lifetime Value represents the total revenue you can expect from a single patient over the course of your relationship. The standard formula reads: LTV = Average Value of Appointment × Average Number of Appointments Each Year × Average Years They Visit Your Practice.

Here's an example: an ENT telemedicine practice where patients book three appointments per year at $150 each and stay for 6 years would have an LTV of $2,700. Subscription-based models work out LTV differently. They look at monthly recurring revenue, gross margin, and how long patients stay.

Contribution margin: what's left after variable costs and acquisition

Contribution margin is what you have left after taking out both direct costs and acquisition expenses. You get this by subtracting direct costs from revenue. Traditional accounting focuses on Direct Contribution Margin (DCM), but telemedicine businesses must look at total margin, including indirect costs.

DCM calculations usually leave out 15%-30% of a health system's cost base—depreciation, administrative overhead, facility support, and executive functions. This makes profits look better than they are. A healthy telehealth business should maintain an LTV: CAC ratio of at least 3:1, meaning that every dollar spent on acquiring new patients generates at least $3 in lifetime value.

How to calculate COGS for a telehealth treatment

You need precise cost calculations for each telehealth treatment component to set the correct prices. Here's a breakdown of the actual expenses that make up your telehealth COGS.

Provider evaluation cost (and how follow-ups change the math)

Provider compensation is the foundation of your telehealth COGS. Clinical effort, malpractice insurance, and personnel costs are the core of this expense. Current data shows telehealth visits cost around $380 per appointment, while in-person visits cost $493. The math changes with follow-up appointments. A Medicare study shows that patients with their first telehealth visits needed slightly more follow-ups than in-person visits (16% vs. 14%). The overall costs stayed lower in spite of that.

Medication or compounding cost (and where surprises show up)

Medication costs make up much of telehealth COGS and can vary. Pharmacy expenses can quickly eat into margins if not calculated properly, especially in medication-heavy programs. Telehealth visits don't need medical supplies like in-person visits do, but other indirect costs often pop up unexpectedly.

Shipping, support, and refunds

Support costs often catch telehealth budgets off guard. Technical support becomes crucial, especially when you have both staff and patients to assist - this creates a hidden but needed expense. There's another reason to include refund policies in your cost calculations since they directly affect your overall margin.

Platform costs and tool stack costs

Your technology infrastructure is a major cost center that includes:

• HIPAA-compliant video platforms (~$150/user/month)
• Digital diagnostic tools and software subscriptions
• Equipment maintenance
• Technical support services

Telehealth systems typically cost between $17,000 and $50,000 to implement. This covers hardware, software installation, and specialized digital medical equipment.

Labs and diagnostics (when they're required vs optional)

Lab testing costs between telehealth and in-person visits differ significantly. Recent Medicare data reveal that patients who used telehealth needed fewer lab tests and medical imaging visits in the month after care. This saved about $82 per telehealth patient compared to in-person visits. Researchers point out that in-person visits often lead to "tests of convenience" that telehealth naturally avoids, which cuts unnecessary costs.

Pricing telemedicine services using a margin-first method

After you get a good grasp of your COGS and CAC fundamentals, you should think about pricing with strategy rather than reaction. A margin-first approach will give a solid foundation that keeps your telehealth business running well beyond the first launch.

Minimum margin targets for sustainability

Instead of chasing a universal gross margin target, price from your unit economics. Your treatment-level gross margin must cover variable delivery costs (providers, meds/labs, fulfillment, support) and still leave room for CAC and overhead. As a practical benchmark, many operators aim for an LTV-to-CAC ratio around 3:1 or better, but the right target depends on whether you’re subscription-based or one-time care.

Pricing differences by treatment type

The complexity of treatments plays a big role in pricing. To name just one example, average physician time for pacemaker telemonitoring takes 4.7 minutes per patient/year, while ICD telemonitoring needs 7.5 minutes. These operational differences must show in your pricing.

Complex treatments bring higher costs, too. ICD telemonitoring's emergency room visits cost €47 per patient/year compared to €38 for pacemaker monitoring. The pattern continues with hospitalization (€572 vs €0) and medication costs (€726 vs €569). Your pricing strategy needs to reflect these big differences.

Bundling strategies that protect margin

Bundled payments protect margins better than fee-for-service models. Here are some good approaches:

• Diagnosis-treatment combination payments (single price for all related services)
• Episodic payment systems (works great for telemonitoring)
• Population-based capitation models that lower the risk

Bundled payments let you include follow-up care without separate billing, which keeps your margins safe from getting eaten away by piece-by-piece reimbursement.

When a lower price is a trap (and what to do instead)

Many providers try to attract patients by setting prices too low. This strategy doesn't work well because the convenience of telemedicine naturally leads to increased care use. A better option is to look at value-based models where outcomes determine payment instead of services provided.

Fee parity makes sense at first - charging the same for virtual and in-person visits. But telemedicine visits actually cost less to provide because of lower overhead. Your margin advantage comes from this cost difference, not from offering volume discounts.

Understanding CAC before you lock pricing

Your telemedicine business can succeed or fail based on customer acquisition costs, even when the pricing looks good on paper. A deep dive into how CAC works in different channels will help you build a pricing strategy that lasts.

Channel-by-channel CAC logic

Marketing channels can produce very different CAC results in telemedicine. Instead of assuming a universal “good CAC,” model CAC by channel and validate it with small tests. Paid social can scale fast, but can be expensive without strong proof and a tight offer.

Search can capture high-intent demand but may cost more per click in competitive niches. Organic channels (SEO, content, partnerships) take longer to produce results but can reduce blended CAC over time. The goal is to track CAC consistently, compare channels on the same attribution rules, and reallocate budget toward the channels that hit your payback target.

What changes CAC faster: proof, offer clarity, eligibility friction, speed to care

Smart operational changes can quickly bring your CAC down. Strong proof points like before/after stories or outcome data help patients make decisions faster. A clear, simple offer removes any confusion about what patients get. Simple eligibility checks stop people from dropping out mid-way. Patients also respond better when you show them how quickly they can get care.

Why pricing and CAC must be modeled together

You can't set prices without thinking about acquisition costs. Your business should recover CAC within 12 months - that's what investors look for. On top of that, each customer should bring in 3-5 times what you spent to acquire them.

Pricing and CAC create different scenarios:

• One-time services struggle to pay back acquisition costs
• Subscription models can break even in 3-6 months
• Employer contracts might pay off right away if they cover acquisition costs

Your prices need to work with your CAC. A price that looks competitive might not work once you add in what you spend to get new customers.

Pricing scenarios with simple examples

Let's get into real-life telehealth pricing scenarios to show how COGS, CAC, and margins work together.

Low-ticket example (simple async-friendly treatment)

Asynchronous e-visits are the simplest telehealth offering, with raw median prices ranging from $20 for brief (5-10 minute) interactions to $60 for longer (21+ minute) consultations. A simple text-based dermatology consultation looks like this:

Price point: $45 per visit

COGS breakdown: Provider compensation ($25), platform fees ($5)

Gross margin: 33%

You need high volume to offset CAC at this price level. In fact, telehealth visits cost only $40-50 compared to $136-176 for in-person alternatives. These services provide substantial value but come with thinner margins.

Mid-ticket example (ongoing program + optional labs)

The ongoing care programs with optional components show these numbers:

Price point: $79 monthly subscription + $40-90 per lab test

COGS breakdown: Provider time ($30), platform ($10), support ($10)

Gross margin: 37% (without labs), 50%+ (with labs)

Subscription models revolutionize unit economics. The clinician compensation drops from 167% to just 47% of revenue at scale with 10,000 monthly consults.

High-ticket example (medication-heavy program + higher support load)

Medication-intensive treatments need specific pricing structures:

Price point: $129 per visit + medication costs

COGS breakdown: Provider time ($45), medication ($30-80), support ($15)

Gross margin: 30% (variable depending on medication costs)

High-ticket programs must factor in follow-up care. Telehealth visits result in 6% follow-ups, compared to 13% for office visits.

What each scenario teaches you about margin and payback

Each pricing tier shows distinct principles. Low-ticket services need volume efficiency. Mid-ticket subscriptions make revenue more predictable. High-ticket offerings must balance medication costs carefully. Telehealth services become profitable at specific volume thresholds - around 1,500 visits monthly for many providers.

How Bask Health supports pricing for telemedicine services

Mapping the real workflow behind your price

We make it easier to map each step of the patient journey, so you can see where COGS comes from and where margin leaks occur. When you understand which steps drive cost—extra follow-ups, support tickets, refunds, lab coordination, or fulfillment—you can price based on reality rather than assumptions.

Adjusting patient flow without rebuilding your stack

Pricing changes often require workflow changes. Our modular setup lets you adjust intake requirements, eligibility logic, follow-up cadence, and patient handoffs without rebuilding your entire system. That makes it easier to test bundles, subscriptions, or tiered offers while keeping delivery consistent.

Proving what actually converts and retains

We help you move from a pricing hypothesis to live signals by tracking what matters: where patients drop off, what converts, and what drives retention. That way, you can refine pricing around real behavior—conversion rates, repeat usage, and support load—rather than setting a price once and hoping it holds.

Final framework and worksheet

Let's put together a practical framework for telemedicine pricing that you can start using right away.

A simple pricing formula (COGS + CAC targets + margin buffer)

Your telemedicine price point should follow this simple formula:

Price = COGS + Target CAC + Margin Buffer

The market supports price points around $40-49 per visit for direct-to-consumer services. Employer-based models typically employ per-member-per-month fees, and final costs vary based on customization options.

Worksheet to calculate launch pricing by treatment type

Here's a worksheet you need to create with these columns:

1. Treatment type
2. Provider compensation
3. Medication/lab costs
4. Platform/technology expenses
5. Support costs
6. Target acquisition cost
7. Required margin (%)
8. Calculated price point

Urgent care telehealth visits save approximately $673 per claim compared to in-person alternatives.

Final decision checklist: what must be true before you launch pricing publicly

Make sure these elements check out before you finalize your pricing:

• Your service delivery method's price (phone, email, app, kiosk) makes sense
• Your telehealth benefits combine smoothly with other health benefits
• Your pricing covers all required services (primary care, dermatology, behavioral medicine)
• You have clear policies ready for workplace implementation
• Your marketing strategy can support adoption at your chosen price point

Conclusion

Pricing for telemedicine services works when you stop guessing and start modeling. Build your COGS line-by-line, estimate CAC by channel, and choose a price that protects margin before you scale spend.

Then pressure-test it with scenarios (low-, mid, and high-ticket) and publish only what your workflow can deliver profitably. Telehealth can be cheaper per visit, but pricing only “wins” when your unit economics survive real-world behavior

References

1. McGee, C. (2024, July 28). Customer acquisition cost in the healthcare industry. Focus Digital. https://focus-digital.co/customer-acquisition-cost-in-the-healthcare-industry/ Focus Digital
2. Raes, S., Trybou, J., & Annemans, L. (2022). How to pay for telemedicine: A comparison of ten health systems. Health Systems & Reform, 8(1), 2116088. https://doi.org/10.1080/23288604.2022.2116088[ PubMed+1](https://pubmed.ncbi.nlm.nih.gov/36084277/?utm_source=chatgpt.com)
3. Wu, S. S., Rathi, V. K., Ross, J. S., Sethi, R. K. V., & Xiao, R. (2022). Payer-negotiated prices for telemedicine services. Journal of General Internal Medicine, 37(13), 3495–3497. https://doi.org/10.1007/s11606-022-07398-4[ Ohio State University Pure](https://ohiostate.elsevierpure.com/en/publications/payer-negotiated-prices-for-telemedicine-services/?utm_source=chatgpt.com)
4. Moyer, A. (n.d.). Telemedicine’s price tag depends on the vendor and services. The Alliance. Retrieved December 17, 2025, from https://the-alliance.org/blog/telemedicines-price-tag-depends-on-vendor-and-services/ the-alliance.org