For One Medical ( Clinics/Outpatient Services)'s membership model, should we focus on increasing the annual fee to boost revenue or keeping it low to attract more patients?

Introduction

The trade-off we're examining for One Medical's membership model is whether to increase the annual fee to boost revenue or keep it low to attract more patients. This decision is crucial for balancing short-term revenue goals with long-term growth and market penetration. I'll analyze this trade-off by considering its impact on various stakeholders, evaluating key metrics, and designing an experiment to inform our decision.

Step 1

Clarifying Questions (3 minutes)

• Context: I'm thinking about One Medical's current market position. Could you share our current market share and how it compares to traditional primary care providers?

Why it matters: Helps understand competitive landscape and growth potential Expected answer: Moderate market share with room for growth Impact on approach: Influences whether we prioritize growth or monetization

• Business Context: Based on our financial reports, I assume membership fees are a significant revenue stream. What percentage of our total revenue comes from membership fees versus other services?

Why it matters: Determines the impact of fee changes on overall revenue Expected answer: 30-40% from membership fees Impact on approach: Higher percentage would make fee increase more attractive

• User Impact: Considering our user demographics, I'm curious about price sensitivity. Do we have data on how previous fee changes affected membership retention and acquisition rates?

Why it matters: Indicates potential user response to fee changes Expected answer: Moderate price sensitivity with some churn during past increases Impact on approach: High sensitivity would favor keeping fees low

• Technical: I'm thinking about our current tech stack. How easily can we implement dynamic pricing or tiered membership models if we decide to go that route?

Why it matters: Affects feasibility of more complex pricing strategies Expected answer: Moderate difficulty, requiring 2-3 months of development Impact on approach: Easy implementation would allow for more nuanced solutions

• Resource: Considering our growth plans, what's our current patient-to-doctor ratio, and how much capacity do we have to onboard new members?

Why it matters: Determines if we can handle rapid membership growth Expected answer: Near capacity in some markets, room for growth in others Impact on approach: Limited capacity would favor fee increases over rapid growth