Build a Telehealth P&L: A Beginner Model (Under $1M) and an Advanced Model (Over $5M)

This piece will help you understand everything in a telehealth business model, from revenue streams to cost drivers. We'll get into two detailed telehealth P&L models - one for operations under $1M in annual revenue and another for businesses above $5M. On top of that, it covers the key metrics that determine profitability, including telehealth unit economics, contribution margins, and customer acquisition costs.

A clear grasp of these financial fundamentals will help you build a sustainable business that delivers both clinical value and financial returns, whether you're launching a new telehealth venture or scaling an existing operation.

Key Takeaways

• Telehealth P&Ls differ from clinics due to digital infrastructure, hybrid revenue models, and unique cost drivers.
• Early-stage telehealth (under $1M) often runs negative margins until utilization and scale improve.
• Provider utilization and COGS efficiency are the biggest drivers of profitability.
• Revenue model choice (per-visit, subscription, hybrid) shapes CAC, LTV, and margins.
• Compliance, security, and integration costs are unavoidable and often underestimated.
• Scaling past ~$5M improves margins but increases talent and operational complexity.
• Strong KPIs (utilization, CAC payback, retention, contribution margin) determine success.

Why a Telehealth P&L Is Different From a "Normal" Clinic P&L

Telehealth P&Ls work quite differently from traditional clinic financial models because of their unique cost structures and how they generate revenue.

What a P&L actually tells you (and what it doesn't)

A telehealth profit and loss statement shows your core financial health but often hides key operational details. Traditional clinic P&Ls track service-based revenue and physical overhead. However, telehealth financial models must handle different revenue structures. These include subscription models ($50-$500 per provider monthly), per-encounter pricing ($5-$25 per consultation), and enterprise solutions with custom pricing.

Standard P&Ls might miss the complete integration costs between systems. This crucial factor can boost base software expenses by 10-20% for simple integrations. Complex multi-system setups can double or triple these costs.

The telehealth cost drivers that surprise founders early

Telehealth founders often face unexpected costs that don't exist in traditional clinic models. Data security and compliance infrastructure usually costs $10,000-$50,000 yearly. Many founders underestimate this essential investment that protects patient information.

Network and bandwidth needs catch many by surprise. Facility upgrades cost between $20,000-$100,000, depending on size. These investments become vital to support multiple high-quality video consultations happening at once.

The biggest shock comes from productivity decline during implementation. Staff members take time to adapt to new telehealth systems. Organizations see 10-20% drops in productivity during the first 3-6 months. Standard financial projections rarely show this transition period's impact on performance.

Telehealth P&L models need a careful balance of digital infrastructure costs and traditional clinical expenses. This balance determines if you'll succeed in this healthcare segment that changes faster every day.

The Building Blocks of a Telehealth P&L

You need to understand three core financial pillars that work together to determine profitability when building a detailed telehealth P&L.

Revenue lines (visits, subscriptions, programs, refills, add-ons)

Telehealth businesses make money through multiple streams. We focused on consultation fees, subscription models, and value-added services. The created value combines financial savings with non-financial benefits that draw users. Subscription-based pricing leads to predictable recurring revenue, while tiered membership plans give different service levels. Studies show telehealth visits can boost productivity. Providers can see 16+ patients in a four-hour period compared to 11 in-office visits. This difference could generate $1,270 versus $1,043.

Cost of goods sold (providers, pharmacy, labs, fulfillment, support, platform)

COGS shows the direct costs of service delivery. Provider compensation is the biggest expense—often hitting $345,000 monthly at scale. The COGS package also has pharmacy costs, lab expenses, technology infrastructure, and patient support services. The good news is that telehealth COGS can drop from 167% to 47% of revenue as operations grow and clinician utilization gets better.

Operating expenses (marketing, payroll, tools, legal, compliance, insurance)

Direct service costs are just the start. Telehealth needs investment in marketing (both traditional and virtual), administrative staff, compliance, and security. Digital marketing is a budget-friendly way to reach target audiences. Security and privacy safeguards usually cost between $20,000-$40,000 each year. These are crucial investments to deliver environmentally responsible telehealth services.

Revenue Modeling for Telehealth

The success of every telehealth financial model depends on picking the right revenue strategy. Your revenue structure should naturally align with clinical operations and create lasting income.

Picking a revenue model that fits your care flow

Telehealth providers can set up different revenue structures based on how they deliver care. Popular models range from per-visit pricing ($40-49 for each consultation) to subscription fees (per-member-per-month), or a mix of both. To name just one example, Doctor on Demand bills only when patients use services, while Teladoc runs with a per-member-per-month fee structure. American Well uses both methods and lets employers customize their approach.

How pricing choices affect your entire model

Your pricing strategy shapes every part of your telehealth P&L model. Telehealth prices are expected to rise as patient needs grow, with a 3.5% uptick in 2017. Beyond basic rate setting, the ROI numbers tell an interesting story—Teladoc saves $673 on average per claim compared to regular visits. Insurance coverage expansion plays a key role in pricing, especially now that many temporary telehealth payment policies are becoming permanent.

Watch out for refunds, chargebacks, and customer loss

Small chargeback rates of 0.5-1% can hurt your bottom line a lot. Patients often dispute charges because of confusing bills, surprise fees, and hard-to-recognize payment descriptions. Customer turnover rates bounce between 5% and 25% across different healthcare segments and can quickly shrink your patient base. Finding new members costs five times more than keeping current ones ($500-1500 vs. $100-300), so you really need to tackle these problems early. The numbers speak for themselves—cutting customer loss by just 5% can boost profits by 25-95%.

COGS Modeling

The costs of goods sold are the foundation of any resilient telehealth financial model. These costs often determine if your venture will be profitable.

Provider costs (initial visit vs follow-ups vs async review time)

Provider time makes up the biggest chunk of telehealth COGS and accounts for about 70% of visit costs. Your first consultation needs more of the clinician's time than follow-ups. Research shows that nurses spend around 25.9 minutes on telemedicine consultations. This drops to just 10.7 minutes for follow-up visits. Your P&L should track these different time allocations separately.

Pharmacy, medication, and lab costs (variable vs fixed)

Patient volume affects pharmacy and lab expenses, but these often come with fixed minimum commitments. Studies of telehealth cost structures show that virtual visits cut medical supplies expenses. However, they bring new indirect costs like digital tools, software subscriptions, and technical support. Telehealth interventions can change these costs by a lot. A pharmacy-directed telehealth program showed an impressive 3.6:1 to 5.2:1 return on investment.

Support and fulfillment costs (the "hidden margin leak")

Support costs often leak from telehealth P&Ls. Analysis shows that switching to telemedicine cuts provider costs by $586 per patient—$347 from space/equipment and $239 from personnel. In spite of that, setting up telehealth infrastructure needs a big upfront investment. Hardware and software installation alone costs between $17,000 and $50,000. These setup costs rarely show up as separate line items, but they affect gross margins heavily.

CAC, Marketing Spend, and Payback

Marketing spend is a critical component of any telehealth P&L model. Patient acquisition costs vary dramatically based on channel strategy.

Channel mix assumptions (paid, influencers, affiliates, organic)

Telehealth marketing channels follow a clear effectiveness hierarchy. Direct response champions like paid search and organic SEO drive actual appointment bookings instead of just awareness. Email and SMS marketing help increase conversion rates. Social media advertising and display ads build awareness rather than drive direct bookings. Podcasts and strategic collaborations need larger budgets but provide less predictable returns.

CAC, conversion rate, and payback period (how they connect)

Telehealth customer acquisition costs range from $50 to $929 per patient based on scale and efficiency. Healthy telehealth businesses need CAC payback periods under 12 months for direct-to-consumer models. Subscription services want to achieve 6 months or less. The formula remains straightforward - CAC divided by monthly gross margin equals payback period in months. Boards expect LTV of at least 3x CAC to propel development.

LTV assumptions (retention, refills, subscription length)

Lifetime value calculations rely on retention rates that surpass traditional subscription businesses. Best-in-class telehealth ventures achieve more than 70% annual retention. This is a big deal as it means that they exceed the 50% measure of typical subscription services. Several telehealth companies report 85% of users keep their subscriptions for at least two years.

Operating Expenses and Headcount

Your telehealth P&L model shows that staffing and administrative expenses make up a large part of the costs. The way you structure your team directly affects your overall profitability.

Core roles you need early vs later

The original setup of every telehealth operation needs a Program Leader (Telehealth Champion) who understands both clinical and technical aspects deeply. You'll need a Program Manager to run daily operations and an Education Manager to handle training programs. Your team will grow to include Device Managers, medically trained installers, and quality assurance staff as operations get bigger. The most successful telehealth practices have a dedicated telehealth lead who manages administrative tasks and solves technical issues.

Contractor vs in-house tradeoffs

The choice between outsourcing telehealth staff and hiring in-house staff is a crucial financial decision. Organizations save 30-40% on staffing costs through outsourcing because they don't pay for recruitment, benefits, and infrastructure. Outsourcing gives you quick access to trained staff and lets you adjust your workforce based on patient numbers. The downsides include less control over patient experience, documentation problems, and possible friction with your internal clinical team.

Compliance, security, and admin overhead you can't skip

Regulatory compliance costs are unavoidable. HIPAA compliance requires $5,000-$25,000 for the first assessments and $2,000-$10,000 each year to maintain. Large health systems spend about $1 million yearly on administrative compliance documentation. Telehealth operations must also check their malpractice insurance coverage for virtual services and follow strict privacy rules. Security measures are vital investments that cost an extra $20,000-$40,000 each year.

Model A Under $1M Annual Revenue

Small telehealth ventures with annual revenue under $1M need to master their early-stage economics. The numbers paint a clear picture of what it takes to survive.

Common assumptions for a lean launch

Small telehealth businesses usually target 1,000 patient visits monthly. Each consultation brings in about $100 through reimbursed visits. Clinician pay hits $124,000 monthly. Other costs like licensing, benefits, and equipment add another $43,000. The yearly operating costs fall between $137,000 to $1.2 million based on service scope.

What "healthy" gross margin and contribution margin look like here

The reality hits hard - telehealth operations under $1M rarely see healthy margins from the start. The math shows that for every $100,000 in revenue, these companies spend $167,000. This means they lose about $67 per consultation before overhead costs. Breaking even needs about 1,500 monthly patient visits. Yes, it is possible that well-run telehealth practices can reach net profit margins of 15-25%, beating traditional clinics' 10-15% averages.

The fastest ways this model breaks (and how to prevent it)

Low utilization rates break sub-$1M telehealth models. Providers working at 20-40% capacity spread fixed costs over fewer billable hours, making profits impossible. The setup costs catch many founders off guard. Compliance checks cost $5,000-$25,000 upfront plus yearly maintenance of $2,000-$10,000. Financial data shows that success needs an LTV:CAC ratio of at least 3:1. The average revenue per visit must stay between $85-$150 to build lasting operations.

Model B Over $5M Annual Revenue

Telehealth operations undergo fundamental changes when they reach $5M in annual revenue. The financial model evolves from basic survival to scalability, which creates new patterns in operations.

What changes at scale (team structure, support load, operations)

Telehealth organizations evolve naturally from isolated projects into centralized operations. Many organizations now treat telehealth as a distinct service line—just like a hospital within their system. The leadership structure grows more sophisticated with specialized executives who connect IT, nursing, physician, and operational teams. Organizations at this revenue level typically split into specific divisions that handle digital experience, virtual care delivery, and retail services.

Where margins typically improve (and where they get squeezed)

Provider utilization drives margin improvements at scale. The efficiency rates jump from 20-40% in sub-$1M operations to optimal levels. Virtual services help reduce physical infrastructure costs. However, talent acquisition costs rise as telehealth companies compete for the core team. This competition makes wages the single largest expense category.

What investors and operators track at this stage

Sophisticated telehealth operators look beyond simple P&L metrics. They monitor visit modality mix, compare no-show rates across modalities, and track contribution margin per visit. Organizations face increased financial scrutiny of cash flow, EBITDA, subscriber retention, and average revenue per user—especially as they add new service lines. Quality measurements become crucial, with dashboards that show Net Promoter Scores for patient experience and clinical outcome measures.

Scenario Planning and KPIs

Smart financial management in telehealth just needs careful scenario planning and performance tracking. Successful telehealth businesses look beyond regular financial reports to spot warning signs early and find opportunities to grow.

Base, downside, upside scenarios (what to stress-test)

You should test three key scenarios for telehealth forecasting. The base scenario should aim to break even at 13 months with detailed monthly cash burn projections. Your downside planning must test if practitioner utilization falls below 40% capacity - the minimum to cover the fixed monthly overhead of $10,850. The upside scenarios should explore ways to reach the projected EBITDA of $105 million by Year 2 through better utilization and smart cost control.

KPI dashboard: bookings, approval rate, CAC, churn, margin, payback

Your telehealth KPI dashboard should focus on metrics that boost financial health. The practitioner utilization rate serves as your main operational lever. Keep customer acquisition cost under $150 and watch patient lifetime value to maintain a minimum LTV: CAC ratio of 3:1. On top of that, track retention metrics—thriving telehealth businesses show 70-85% annual retention rates. The dashboard should also include approval rates, gross margin percentages, and CAC payback periods that target under 12 months.

The one-page "monthly close" checklist for founders

Monthly reviews should cover these key areas: cash balances, runway length, burn rate, accounts receivable aging, sales/marketing ROI by channel, revenue vs. targets, churn percentages, net profit, and margin trends. Compare planned vs. actual performance for all metrics. This monthly practice creates a "learning health system" that makes ongoing adjustments based on up-to-the-minute performance data.

How Bask Health Helps You Build a More Reliable P&L

We help you map workflows to real costs (so COGS isn’t guesswork)

A “visit” isn’t one cost. It’s intake + clinician time + follow-up + support + (sometimes) labs/pharmacy + platform workload. Bask Health helps you design consistent patient flows and standardize the steps, so you can estimate COGS based on the actual work performed (initial evaluation vs follow-ups vs async review) instead of averaging everything into one messy number. When your workflow is consistent, your unit economics become easier to model—and easier to improve.

We help you iterate flows without rebuilding your stack (so assumptions stay current)

Early-stage telehealth changes fast: eligibility rules, pricing, states, visit types, support load—everything evolves. Bask Health is built for modular changes, so you can adjust patient intake, messaging, follow-up logic, and care pathways without a full rebuild. That matters because every workflow change affects your P&L: provider minutes, support tickets, refund rates, conversion, and retention. If your operations can’t adapt quickly, your financial model becomes outdated before it’s even useful.

We help you connect patient experience to performance signals (so the model reflects reality)

A telehealth P&L isn’t just finance—it’s operations in spreadsheet form. Bask Health makes it easier to align your marketing promises with delivery by keeping the patient journey structured (intake → care → follow-up) and measurable. That gives you cleaner signals to track what actually drives profit: utilization, approval rate, no-shows, reactivations, refills, churn, and support burden. The result is a P&L you can steer with real levers—not just hope.

Telehealth P&L Template and Next Steps

Your telehealth P&L needs good preparation and step-by-step execution. A well-laid-out plan helps you avoid making pricey mistakes that many digital health startups face.

The worksheet inputs you need before you start

You should gather all the basic data before building your model. This includes project name, the core team members, timeline assumptions, and currency conventions. Your inputs need details about revenue streams (consultations, subscriptions, partnerships), cost splits between direct costs (provider payments, infrastructure) and indirect costs (admin staff, insurance, marketing), plus working capital requirements. The financial forecasts must include projected visit volumes, provider compensation rates, and predicted operational costs ranging from $137,000 to $1.2 million annually.

A simple build order so you don't model the wrong thing first

Start with assumptions, move to calculations, then outputs. Your revenue projections should come first, based on your chosen business models—subscription, pay-per-use, or enterprise. Calculate operating costs next, adjusted for inflation to determine operating profit. Add working capital assumptions to show how business cycles affect you. The final step needs valuation metrics, including Net Present Value, Internal Rate of Return, and Payback Period.

What to finalize before you launch, spend, or expand states

Check regulatory compliance requirements, typically costing $5,000-$25,000 for original assessments plus $2,000-$10,000 annually. Staff training needs proper allocation (2-4 hours per staff member). Set up metrics to continuously evaluate patient satisfaction, utilization rates, and clinical outcomes. Make sure you have the necessary licenses for interstate telehealth practice, which costs about $1,500 per state.

Conclusion

Building a telehealth P&L is really about building a decision system. If you can model revenue, COGS, and operating expenses honestly—and then tie those numbers back to how care is delivered—you’ll avoid the classic founder trap: growing patient volume while quietly losing money on every cohort.

The biggest differences versus a “normal” clinic P&L come down to digital cost structure and workflow design. Telehealth has fewer facility costs, but it introduces platform overhead, compliance requirements, integrations, and support load that can crush margins if you don’t plan for them. That’s why the best operators obsess over utilization, COGS efficiency, CAC payback, retention, and contribution margin—not just top-line revenue.

Your stage matters. Under $1M, you’re fighting for break-even through tighter operations and realistic acquisition assumptions. Over $5M, you gain efficiency—but complexity rises through headcount, support, and multi-service operations. In both cases, scenario planning and a monthly close rhythm are what keep your model accurate as reality changes.

If you want your P&L to stay reliable, build it as a living model: start simple, track the right KPIs, and update assumptions based on what your workflows and patients are actually doing. Platforms like Bask Health help by making those workflows consistent, measurable, and easier to iterate—so your financial plan stays aligned with delivery as you scale.

References

1. AgileTech. (n.d.). The true cost of telehealth implementation and how to lower it. Retrieved from https://agiletech.vn/cost-of-telehealth-implementation/
2. AArete. (2025, July 18). Improving payer member retention with churn analytics. AArete. Retrieved from https://www.aarete.com/insights/improving-payer-member-retention-with-churn-analytics/
3. Outsourcing vs hiring in-house medical staff: Differences. (n.d.). MedicalStaffRelief.com. Retrieved from https://medicalstaffrelief.com/outsourcing-vs-hiring-in-house-medical-staff/
4. Wheel. (n.d.). How to achieve profitability in virtual care: Telehealth cost models. Retrieved from https://www.wheel.com/blog/telehealth-cost-models
5. Telehealth and telemedicine market: challenges and solutions. (n.d.). TelehealthAndMedicineToday.com. Retrieved from https://telehealthandmedicinetoday.com/index.php/journal/article/view/140/164
6. IBISWorld. (n.d.). Telehealth services in the United States industry report 5775. Retrieved from https://www.ibisworld.com/united-states/industry/telehealth-services/5775/
7. DigitalHealth Folio3. (n.d.). Telemedicine startup costs. Retrieved from https://digitalhealth.folio3.com/blog/telemedicine-startup-costs/
8. Medesk. (n.d.). Telemedicine startup cost: What’s the real price tag? (And how to save thousands). Retrieved from https://www.medesk.net/en/blog/telemedicine-startup-costs/