Healthcare and pharma
PMPM (per member per month)
A cost or revenue figure divided by the number of members and months, used by health plans.
Facts checked against sources onWhat does PMPM (per member per month) mean?
PMPM stands for per member per month. Health insurers and providers express premiums, costs and payments this way so that plans of different sizes can be compared. PMPM = total amount for the period / (average members x months). Example: a plan with 50,000 members that spends 180 million on claims in a year has claims of 180 million / (50,000 x 12) = 300 PMPM. If premiums are 350 PMPM, the medical loss ratio is about 86 percent.
Where does it come up in case interview prep?
Related terms
- Medical loss ratio (MLR)The share of health insurance premiums spent on medical care and quality improvement.
- CapitationPaying a provider a fixed amount per person per period, whatever care they use.
- ARPU (average revenue per user)Revenue divided by the average number of users.
- Loss of exclusivity (LOE)When a drug's patents and other protections end and cheaper copies can launch.
- BiosimilarA near copy of a biologic medicine, approved as having no meaningful clinical difference.
- DRG (diagnosis-related group)A system that pays hospitals a fixed amount per admission, based on the diagnosis and treatment.
- ARPOB (average revenue per occupied bed)Hospital revenue divided by occupied bed days, a key measure for Indian hospital chains.
- Average length of stay (ALOS)The average number of days patients stay in hospital per admission.
Learn it in context
See PMPM (per member per month) at work in a lesson from Healthcare providers and payers, with checks as you go.
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