Medical Practice Management
Dec 21

Reduce Overhead by Expanding Your Schedule

Many practices look at the cost of rent as a fixed expense, when in fact –in relationship to

income– rent could in fact be a variable expense when compared to production. As with any expense, the cost of a particular item of overhead is not as important as its relationship to the budget and income. For example, a rent of $3,000 per month is 6% of $50,000, but only 3% of $100,000. Splitting the rent between two $50,000 practices reduces the cost by $1,500 each.

Most practices only use their exam rooms 8 hours per day at most, and often 6 hours or less, typically between the hours of 8:00AM and 5:00 PM. A full-time office-visit schedule for most physicians is 36 hours per week, and even less for specialists and surgeons with in-patient schedules.

At the same time, patient demand is highest before their work hours, during lunch, after work, and Saturdays. We find that many patients will accept appointment hours between 7:00 AM and 9:00 PM, a total of 14 hours per day or 70 hours per week. 70 hours per week is almost exactly the schedule of two full time physicians in office visits. Therefore, a physician could cut his or her rent costs in half by alternating their schedule with another physician in the same space.

About Reed Tinsley, CPA

As a top advisor to physicians, I help increase practice profits by delivering hands-on, expert medical accounting/tax support, practice counsel, and revenue-building strategies. Read more →