Timeline
How far the projection runs.
Membership
Members at Month 1 start.
Linear acquisition (simple on purpose).
Members lost each month as % of starting members that month.
Pricing & Coverage
Per member per month membership fee.
Medical Costs (Per Member Per Month)
Primary care visits, preventive care, wellness.
Specialist referrals, diagnostic imaging, outpatient procedures.
Hospital stays, surgeries (below stop-loss attachment).
ER visits, observation stays.
Prescription drugs, medications.
Catastrophic coverage premium (reinsurance).
On-Site Employer Clinics
Workplace clinics increase preventive care and reduce downstream costs.
Added preventive care costs from on-site clinic access.
Percentage reduction in inpatient/surgical costs (use negative value).
Reduction in ER costs from better access to care (use negative value).
Reserve Policy
Months of expected medical claims to hold in reserve.
Incurred-But-Not-Reported claims reserve.
Unlucky Year Scenario Settings
Model adverse event cluster (cancer, premature births, COVID surge).
Total adverse event cost over shock duration.
Month when adverse events begin.
Number of months shock is spread over.
Facilities
Used to compute clinic count = ceil(members / capacity).
All-in rent + utilities per clinic site.
Staffing
Clinicians = members / this ratio.
MA count = clinicians * this.
Fully-loaded monthly cost per clinician.
Fully-loaded monthly cost per MA.
Overhead & Startup
EHR, admin tools, legal/compliance, misc.
Applied to (staff + rent + other OpEx).
One-time spend injected in the chosen month.
Which month the startup spend hits cash flow.
Initial cash on hand to fund the ramp.
Model philosophy (a.k.a. the honest simplification): This is a deterministic, monthly, linear-acquisition model.
It's meant for steering, not prophecy. Once you like the shape of the curve, we can add "real world cruelty"
(seasonality, cohort churn, hiring lags, visit demand, risk corridors, etc.).
Medical cost modeling: We explicitly model medical spend by category (ambulatory, specialty, inpatient, ER, pharmacy) plus stop-loss reinsurance premium. This provides transparency about where revenue goes and helps identify cost drivers. Default costs are conservative estimates based on young, healthy employer-based populations (age 30-45).
On-site employer clinics: Models the financial impact of workplace clinics, which typically increase preventive care costs slightly while reducing downstream ER and inpatient utilization through better access and early intervention.
Reserve requirements: The model tracks required reserves (months of expected claims plus IBNR) and flags when cash falls below this threshold. This helps ensure actuarial soundness and demonstrates financial discipline to regulators, lenders, and board members.
Actuarial scenarios: Use Base/Conservative/Unlucky Year scenarios to stress-test financial viability. Conservative assumes higher utilization (+15-25%) and slower growth (-25%). Unlucky Year adds a one-time adverse event cluster ($1M over 12 months, starting month 13) modeling cancer diagnoses, premature births, or disease outbreaks.
Medical cost modeling: We explicitly model medical spend by category (ambulatory, specialty, inpatient, ER, pharmacy) plus stop-loss reinsurance premium. This provides transparency about where revenue goes and helps identify cost drivers. Default costs are conservative estimates based on young, healthy employer-based populations (age 30-45).
On-site employer clinics: Models the financial impact of workplace clinics, which typically increase preventive care costs slightly while reducing downstream ER and inpatient utilization through better access and early intervention.
Reserve requirements: The model tracks required reserves (months of expected claims plus IBNR) and flags when cash falls below this threshold. This helps ensure actuarial soundness and demonstrates financial discipline to regulators, lenders, and board members.
Actuarial scenarios: Use Base/Conservative/Unlucky Year scenarios to stress-test financial viability. Conservative assumes higher utilization (+15-25%) and slower growth (-25%). Unlucky Year adds a one-time adverse event cluster ($1M over 12 months, starting month 13) modeling cancer diagnoses, premature births, or disease outbreaks.
Members
Revenue vs Costs
Surplus & Cash