How much does it cost to see a patient in your medical office?

If y0u were to ask the average business owner, how much does it cost to make widgets, my guess is that 9 out of 10 would know exactly what that figure is.

On the other hand, if you were to ask a doctor who owns the practice, how much is it costing you to see each patient, I’d argue 9 out of 10 wouldn’t know.

Now, I’m making huge assumptions of course, but I think the point is valid. Doctor’s offices do a very poor job of understanding basic business principles, such as, figuring out their cost.

Figuring out cost can get complicated, and there is certainly a lot of ways of doing it. But I tend to think that there is elegance is simplicity.

Gather the total number of encounters. Next, gather all your expenses. Then, you divide the two:

  • Expenses – 850,000
  • Encounters – 10,000

850,000 / 10,000 = $85

Under this scenario, each encounter is costing the practice $85.

Knowing, measuring and benchmarking this number will put you on the right path to stay ahead of the curve.


  1. I have a very similar message to practices when I help them figure out their costs: it’s their total REVENUE divided by the number of visits. Almost every private practice runs on a cash basis, so revenue=expenses (and the doctors brings home what’s left after ‘expenses’ if there is anything).

    One reason I emphasize this is that most doctors spend waaaaaaay too much time focusing on expenses and not enough time on increasing revenue. I’ve never, EVER, met a practice that didn’t have more opportunity to increase revenue than reducing expenses.


  2. The expenses vs revenue is a valid point. Saving a couple of bucks on paper could save you a few hundred (maybe even a few thousand) dollars. Using the same energy and emphasis on revenue is a much more loftier goal.

    By the way, glad to see you around again. I hope it won’t be long before you add your comments again. Always enjoy your insights.



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