Practice Owners Need to Know the Cost-Per-Patient

Nurse Practitioner business owners need to understand the cost of doing business, especially in terms of reimbursement in order to assess the viability of their practice. One of those metrics is determining what it cost the practice to see each patient.

It is vital for you to know this information so you can assess the cost effectiveness of seeing patients under certain plans (you might find some insurers pay less than the cost of care). In addition, it helps you determine what a fair cash rate is, and helps you set your budget.

In order to figure your cost-per-patient you need to gather some data, including your monthly operating cost. Once you have this information, you will divide this by the number of patients you are seeing each month. From there you will be able to determine your cost per patient.

Monthly operating cost are usually fixed and variable costing items such as: lease or mortgage payments, utilities including water/sewing, phone, fax, internet and cellular service. You will also need to include the cost of any service contracts such as cleaning, medical waste disposal, copier service and shredding services if you use them. Don't forget heating and cooling, ERM, subscriptions, medical supplies, office supplies, staff salaries and taxes and any benefits you are paying as well insurances, licenses, advertising, etc. Depending on your office, you will have more or less cost.

Figuring out your cost per patient is vital. You cannot make intelligent decisions about your operating cost nor can you adequately evaluate a proposed insurance contract. It will help you determine the viability and sustainability of your practice.

Knowledge is not only power, it's business survival.