Do You Know What Your Average Medical Practice Revenue Should Be?

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Physicians earn some of the highest annual salaries of all workers in the United States. However, this is not the whole picture. They also incur some of the highest costs for education, malpractice insurance, and loans to start a practice. Understanding the average annual salary for different types of physicians and the average medical practice revenue could help you take decisive actions to increase your private medical practice revenue without sacrificing your ethics or the quality of care you provide to your patients.

How Much Money Physicians Earn

The average earnings of physicians play an essential role in total private medical practice revenue. The Bureau of Labor Statistics collects salary information for all occupations, including primary care and specialist physicians. In 2018, the average annual salary for a primary care physician was $223,000. Specialists earned an average of $329,000 per year in 2018. The average 2018 salaries are about 7% higher than what physicians earned in 2017.

There are geographic and specialty differences in the average pay of physicians. Doctors who work in the North-Central United States and the Southeast United States earn about 5 to 10% more per year than the national average.

The highest-paying specialties include plastic surgery with an average annual salary of $505,000; orthopedics with an average annual salary of $497,000; cardiology with an average annual salary of $423,000; gastroenterology with an average annual salary of $408,000; and radiology with an average annual salary of $401,000. Physicians who are part of a private medical practice tend to have higher salaries compared to those who work in academics, public hospitals or other public health care facilities.

Costs of a Private Medical Practice

The increase in physician pay rate is not necessarily consistent with the revenue pulled in by a private medical practice. In order to take a fair look at revenue, the expenses of a private medical practice must also be considered.

The average cost to launch a private medical practice is more than $70,000. These costs include rent, purchasing equipment, setting up internet and website service and marketing the practice. Some of these costs are ongoing while others are one-time events. Other costs include securing a business license, getting malpractice insurance and improving the office space in order to make it suitable for a medical practice.

A private medical practice must also consider their staffing and administrative costs, and they cannot bill the patients specifically for these costs. These expenses include office staff, janitorial services, tax consultants or accountants and lawyers. A medical practice also typically has medical assistants, nurses, certified nursing assistants, phlebotomists and receptionists on their staff. Research suggests that it takes up to two years for a medical practice’s revenue to become positive. This is due to all of the startup costs and the time that it takes to secure patients and become efficient in everyday activities.

Average Medical Practice Revenue

Each physician’s gross professional revenue in private medical practice is an estimated $1,328,625 as of 2018. After subtracting the net costs per physician, the average private medical practice revenue per physician was $681,322. This is an average across all specialties of care, including primary care.

The 2017 average net revenue per physician was $682,735, which demonstrates that the average net revenue per physician in private practice may be decreasing. Fortunately, there are known methods of how to increase medical practice revenue. Our innovative solutions can help you boost revenue and increase the net income of your private medical practice.

Use Reporting Analytics

One important method of increasing medical practice revenue is to look at the income and expense streams for your practice. As a part of our medical practice technology solutions, we offer this type of analytical service. We can show you which services are the most profitable. This allows you to schedule more of those types of office visits or procedures. We can also show you where your expenses are increasing. This allows you to take decisive action in order to lower those costs.

Get a Handle on Coding

As much as 20% of your medical practice’s revenue could be lost due to coding errors. A simple ICD-10 coding error for a patient with diabetes mellitus with complications related to retinopathy could result in an insurer denying the claim for their eye testing and care. We offer medical coding auditing for the detection of these errors. Our auditing service provides your medical practice with a clear demonstration of the most common types of errors your billing team makes and how much those errors are costing your practice.

Set Up a Denial Management System

We offer denial management services in order to get at the heart of why claims that your medical practice submits to insurers get denied. Even with careful medical coding, it is still possible to have some claims denied. We take a close look at each denied claim and act as an intermediary in order to find out the cause for the denial.

Many claims are denied due to a simple error, such as inverted Social Security numbers or dates of birth. Claims may also be denied due to insufficient evidence to support the diagnosis. Using our denial management services is one of the best ways of how to increase medical practice revenue.

Improve Scheduling Practices

Patients get frustrated when they have to wait for more than 30 minutes to see their doctor. Irate patients often take their frustration out on the office staff, which can lead to your administrative team’s costly turnover. Using computerized systems for scheduling could reduce the wait time and help your practice generate more revenue.

Consider extending the hours of your practice. Offering evening or weekend appointments could send more patients your way instead of to the urgent care or retail clinic down the road. Patients are happier and tend to have better health outcomes when they have a medical home in which they receive all or most of their health care.

Embrace Technology

By embracing technology, your medical practice can get a revenue boost. Our electronic medical records reduce the amount of time that it takes to document each visit and a patient’s incoming laboratory results. An online payment portal allows your patients to submit their co-pays and co-insurance online instead of tying up your staff with phone calls.

Online scheduling also reduces the amount of time that your staff has to spend on the phone, and patients often like being able to see the range of appointment times and select one that meets their needs. An online portal for patients to ask non-emergency questions could also boost your revenue.

Knowing the average medical practice revenue is important, and our services can help you increase your private medical practice’s net income.

Contact us today to learn more of our innovative strategies and how they can help your medical practice.

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