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Ask-A-Consultant: Average Overhead Rate

Q:

I was in private practice for 14 years then for the past 8 years worked for and managed by a local hospital. My contract is up and the hospital is getting out of primary care management. What percent does it cost to run and office now and what percent is left for the physician?
Forsyth, GA

A:

Thanks for your question. The answer is not straightforward. However, the average overhead rate for a Family Practioner is the range of 58%. The actual amount can vary, sometimes substantially from practice to practice depending on many factors including, the number of providers, whether you are utilizing mid level providers, the type and volume of ancillary services in the practice, how well your receivables are managed, how good a job you do negotiating or using purchasing groups for variable purchases like office and medical supplies, how effectively you use your staff and a host of other considerations.

We have substantial experience in evaluating overhead and identifying ways to reduce costs. If we can be of further service, please let me know.
 

Russell B. Still
Executive Vice President

MMA does not provide legal, accounting, or tax advice.  If you need assistance in these areas, we recommend that you consult a qualified professional.  In addition, please note that a client relationship with MMA is not established by the submission of a question to this forum or by the publishing of MMA's response.



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Medical Management Associates, Inc.
3330 Cumberland Boulevard Suite 200 Atlanta, GA 30339
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