TL;DR
Set the budget from observed membership receipts, delivery costs, enrollment work and remaining obligations. Keep cash collected separate from contribution earned during the review period. Use cohort records and explicit future assumptions rather than multiplying the current fee by an assumed membership duration.
The budget needs a time boundary
A founder can collect an advance payment while still owing services. Another member can pay periodically and leave before the period used in a sales forecast ends. Neither arrangement lets an agency treat the advertised fee as immediate acquisition profit.
The AAFP defines DPC around periodic payments and a defined service scope. The contract supplies the actual obligations. AAFP policy. This worksheet is an original management model, not an accounting standard or evidence of typical retention.
Ask the financial owner to choose the cohort entry event and review cutoff. A suitable internal definition might use the effective membership date confirmed under the agreement. Do not mix signed-but-not-effective agreements with active memberships merely because both appear in the sales system.
Build the cohort contribution worksheet
Use internal records within approved access controls. Give the marketing partner only the summary approved for its task. Keep clinical histories and identifiable payment details out of the agency brief.
| Variable | Supply the practice's evidence | Boundary to preserve |
|---|---|---|
| R | Membership revenue recognized for the cohort during the review period | Have the accountant define recognition; do not substitute advance cash |
| F | Refunds or credits affecting that revenue, if not already reflected | Avoid subtracting the same adjustment again |
| D | Delivery and membership-administration costs allocated to the cohort | Include the agreed treatment of clinician and staff resources |
| O | Onboarding and enrollment handling costs | Distinguish them from ongoing delivery |
| A | Acquisition spend allocated to the cohort | Include media, agency, creative and agreed internal acquisition labor |
| K | Cash collected and cash refunded during the period | Report separately from contribution |
| U | Unfulfilled obligations and related reserves or commitments | Financial owner determines the appropriate treatment |
Under a consistent definition, management contribution after acquisition = R − F − D − O − A. This identity describes the chosen inputs; it does not prove incremental profit or predict ROI. If recognized revenue already includes refunds, remove F from the separate subtraction. Document that choice beside the formula.
Keep D, O and A mutually exclusive under the chosen allocation. Enrollment handling included in onboarding must not also appear as acquisition labor; ongoing member administration belongs with delivery. Have the financial owner reconcile the categories to the underlying records before using the result.
Complete the accompanying fields: cohort entry rule ___; review cutoff ___; allocation method ___; shared-cost treatment ___; missing costs ___; financial owner ___. An unknown delivery cost should remain unknown, not become an implied free service.
Add a cash view before releasing spending
Record available cash, payments due, reserve policy and outstanding membership obligations under the practice's actual financial process. Do not authorize advertising solely because cash arrived in advance. Ask whether the planned spending leaves the practice able to honor its commitments.
Separate acquisition labor from delivery labor. A physician may spend time answering introductory questions and later provide care. Record each task under the agreed model without assigning the same time to both categories. When time records are incomplete, state the limitation instead of inventing a standard cost per call.
Keep startup infrastructure visible as well. A website foundation serving future cohorts may need a different allocation from a campaign purchased for a defined intake period. The scope budgeting guide helps identify contracted work; the cohort worksheet tests how that cost meets actual membership activity.
Test future assumptions without calling them evidence
Create separate assumption columns for future collected fees, future delivery workload, cancellations, refunds and enrollment timing. Leave values blank until the practice supplies them. Identify which inputs come from observed cohorts and which are owner assumptions.
Compare a shorter membership duration assumption with a longer assumption chosen by the financial owner. Also vary delivery workload: a membership can continue while the resources needed to serve it change. Do not choose a favorable retention figure from another practice's story to make the budget fit.
If the budget is only affordable under an unsupported assumption, narrow the campaign or gather the missing evidence. Forecasts should show what must be true for the spending decision, rather than imply that the marketing provider can cause those conditions.
Make a budget-release decision
Write a decision note: proposed acquisition commitment ___; cash check ___; observed cohort contribution ___; unresolved cost ___; assumption sensitivity ___; next review trigger ___. Choose whether to release the defined spend, reduce its scope or pause expansion while costs are clarified.
GetPatients has a commercial interest in healthcare visibility services. Apply the same evidence requirements to its proposals. A lower inquiry price is not enough if onboarding work consumes the available operating capacity or the membership obligation is poorly understood.
Frequently asked questions
Can we use revenue divided by ad spend as ROI?
That ratio omits delivery and other costs and does not establish incrementality. Label any revenue-to-spend ratio accurately and keep the financial owner's contribution and cash views alongside it.
Do cancellations make a cohort worthless?
No. Assess the actual receipts, adjustments, costs and obligations during the defined period. A cancellation changes the evidence; it does not supply its financial meaning by itself.
Should the agency choose our retention assumption?
The practice should own financial assumptions. Ask the agency to state how its proposed spend changes under the practice's assumptions and what work it can actually control.