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 the Author

Reed Tinsley CPA

This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on accounting & tax, practice management, and financial planning. Schedule a Free Consultation.