Back-of-envelope pricing, employer math, and staffing costs.
Back-of-envelope figures meant to test whether the concept is in the right neighborhood — not a validated financial model. Before capital moves, these need to be rebuilt against a real candidate facility.
National average operating cost per hospital bed is roughly $3,000/night. Ten beds run around the clock at that rate is approximately $11 million per year — the number every pricing scenario below has to cover.
| Nightly rate target | Members needed at $5/mo | at $10/mo | at $20/mo |
|---|---|---|---|
| $3,000/night (full cost) | ~183,000 | ~91,500 | ~46,000 |
| $1,500/night (50% target) | ~90,000 | ~45,000 | ~22,000 |
Note: the $1,500/night (50% target) row above assumes a fully vested member — either 12 months into a monthly membership, or an annual member from day one (see the discount phase-in rule). A member in month one of a monthly plan would still be closer to full cash price than to the 50% target.
For scale: 183,000 members is under half the population of a metro area the size of Wichita, KS.
At $5/month per member:
| Line item | Value |
|---|---|
| 85,000 members × $5/mo | $5.1M / yr in dues |
| ~1% hospitalized annually | ~850 admissions / yr |
| 10 beds × 365 nights × $1,500 | +$5.4M facility fees |
| Total, best case | ~$11M / yr |
At $10/month per member:
| Line item | Value |
|---|---|
| 85,000 members × $10/mo | $10.2M / yr in dues |
| ~1% hospitalized annually | ~850 admissions / yr |
| 10 beds × 365 nights × $1,500 | +$5.4M facility fees |
| Total, best case | ~$15.6M / yr |
The $5/mo scenario splits roughly half-and-half between discounted facility fees and dues; at $10/mo, dues carry a larger share of the total. Neither includes other revenue streams like the surgery center or imaging center. Membership pricing (whether the model ultimately runs at $5, $10, or some other rate) is still an open question — see the pricing scenarios table above for how it affects the break-even membership size.
The first $1,500 of any night's stay could be free, or included in membership, with transparent a-la-carte pricing above that. If a bed is open and a member wants proximity to care — post-op, anxious, monitoring a chronic condition — they can use it at no charge. A genuine differentiator versus any insurance product.
Roughly: one staffed bed ≈ $1 million/year in operating cost at these assumptions. Six beds ≈ $6 million/year. A very rough gut-check: if ~1% of a membership base under 65 is hospitalized in a given year, a 50,000-member base at $10/month ($6M/year in dues) is in the right order of magnitude to cover a handful of beds — this needs real actuarial modeling before it drives any decision.
Leadership and physician roles:
| Role | Count | Annual (each) |
|---|---|---|
| CEO/Administrator | 1 | $145,000 |
| CFO (part-time/contracted) | 1 | $80,000 |
| Director of Nursing | 1 | $125,000 |
| ER Physician | 3 | $400,000 |
| Hospitalist | 2 | $315,000 |
| General Surgeon | 1 | $450,000 |
Nursing, allied health, and facilities staff (97 people, $5,976,000/yr) bring the full team to 106 people. Combined base-salary total over five years: $43,030,000 — before loaded costs (benefits, payroll tax, malpractice), which typically add another 20–30%.
Headcount here is a planning estimate, not a validated staffing model. Real FTE needs depend on actual shift-coverage requirements and patient volume, not just bed count.