Every physician walks a tightrope between scheduling enough patients to cover costs and overbooking to the point of burnout.
On one hand, running a medical practice is expensive. When you consider all of the various expenses related to running a medical practice—rent, insurance, employee salaries, software, equipment etc.—you understand why it’s imperative to get enough paying patients walking through your doors.
On the other hand, overbooking patients can very quickly lead to physicians feeling overworked and burned out, which is a serious problem. In 2017, 42 percent of physicians said they experienced burnout—and that number was the same for both self-employed physicians and physicians working at larger practices.
So the problem you face is one of balance:
- Lean too far one way and you’ll be facing overwhelming costs and the threat of closing your practice.
- Lean too far the other way and you’ll soon find yourself too tired to get through your days and serve your patients.
What you need is a tool to help you examine the specific details of your practice and financial needs, in order to determine exactly how many patients you need to see every day to walk that tightrope.
Fortunately, that’s exactly what you’ll find right here.
Understanding Elements of the Patient Load Equation
Now that you’ve seen the tool, you might be curious about the different elements that go into the equation.
The truth is, every physician’s ideal patient load is different because it depends on specific numbers that are unique to individual practices. Each of those numbers—which we’ll cover in-depth—all add up to one question: How much money do you need to bring in?
The three factors in the patient load equation are:
How Much Does Your Practice Cost?
This is a broad element of the equation, but it’s the best place to start figuring out how much money you need to bring in. To find this number, add up any expense related to running your practice, including things such as:
- Building costs, e.g., rent, utilities and property insurance.
- Medical supplies and equipment (including software, such as EHRs or practice management systems).
- Office supplies.
- Salaries and benefits for you and your employees.
- Liability insurance.
Essentially, what you need for this step is an annual expense report. Here’s an example:
Once you find the grand total of all your business expenses, you’ll move on to the next part of the patient volume calculator.
How Much Does Each Appointment Bring In?
The next step is to figure out how much you bring in after every individual patient encounter. Because this varies depending on things like patient insurance coverage or treatments, it’s best to find an average amount instead of trying to pinpoint it exactly.
The process for finding this number will vary depending on the type of practice—specifically, inpatient versus outpatient.
- For inpatient practices, you’ll want to find your net receivables for the year, then divide by the total number of appointments you saw in the same year.
So, let’s say our example physician from above had 10,000 patient encounters in 2017 and their total net receivables amounted to $1,000,000. Their revenue per patient encounter would be:
- For outpatient practices, you’re looking for the amount your practice billed for and collected, less any payer adjustments.
After that, there’s one more piece of information to collect.
How Much Do You Work in a Year?
Finally, in order to calculate your breakeven point and determine how many patients you need to see per day in order to make a certain amount of money, you have to know how many days you’re going to work.
This, just like every other aspect of this equation, differs widely from physician to physician. You’ll need to take into consideration the holidays on which your practice is closed, weekends, business trips (such as continuing education or conferences) and personal vacations.
For our example, let’s assume the physician takes weekends off and only observes Federal holidays. That means out of 365 days in a year, they’ll see patients on about 250 days.
Putting It All Together
So now that we know all three factors of the equation for our example physician, here’s what the calculation looks like:
Practice cost = $500,000
Patient value = $100
Days worked = 250
Step 1: Divide practice cost by the average amount of money each patient encounter brings in. This will tell you how many patients you need to see in a year.
Next Steps: How to Manage Your Patient Volume
Once you’ve answered the question of how many patients you should be seeing, you’ll be looking at one of three scenarios:
- You’re seeing more patients than you need to
- You’re not seeing enough patients to cover costs
- You’re right on track
If you find yourself in category number one, you’re probably feeling overworked and overwhelmed. To help alleviate some of the stress of dealing with too many patients, we suggest you consider either a dedicated patient scheduling system or a broad-featured practice management solution. Both can help provide additional control over scheduling and communication so that your patients arrive more prepared and your appointments go by quicker.
If you find yourself in category number two, you have two options.
- You can cut costs in order to stay within your budget. Medical accounting software can provide more insight and control over your expenses should you decide to go that route.
- You can try to attract more patients to your practice. A customer relationship management (CRM) system that’s specific to the medical industry is a great way to go. Also, tools such as patient engagement software and patient portals can help improve existing patient experiences, which could result in a better online reputation for your practice and an influx of new patients.
If you find yourself in category number three, you’re doing great—don’t change a thing! Unless, of course, you want to grow your practice or streamline your processes. In which case, you may find our Medical Needs Cycle particularly helpful.
And of course, if you have any other questions about medical software to help your practice thrive, you can reach out to our team of advisors for customized recommendations to fit your exact needs.