09/04/2026
$500 PMPM. If you work with healthcare benefits data, you’ve probably seen a number like that many times. But what does it actually tell you? PMPM stands for per member per month, and healthcare analysts use it for an important reason.
Imagine:
Company A spends $12 million on healthcare.
Company B spends $8 million.
Which company has higher healthcare costs?
We can’t tell from total spending alone. Company A may cover twice as many people. One company may have added members during the year while the other lost them. Total dollars don’t account for those differences. PMPM creates a common denominator by relating costs to the number of months people were actually enrolled. That makes comparisons across populations and time periods more meaningful. But PMPM is not “the cost of the average member.” It is a normalized measure. Like any measure, we need to understand how it was calculated before deciding what it tells us.
Healthcare Analytics Foundations℠ teaches the concepts behind commonly used measures, not simply how to find them in a report. Knowing what PMPM stands for is easy. Understanding what it means is where analysis begins.
Learn more about Healthcare Analytics Foundations℠:
https://www.healthanalyticsconnect.com/healthcare-analytics-foundations-training