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Can you describe the two or three most important benchmarks for a family medicine practice and the ideal target ranges for each one?
Q: I've read a lot about the value of benchmarking. Can you describe the two or three most important benchmarks for a family medicine practice and the ideal target ranges for each one?
A: The three most important benchmarks for a family practice are hours worked, collections, and earnings. Hours worked defines full-time equivalence. You wouldn't expect a half-time physician to have full-time collections or earnings. Median full-time hours in clinical activities, excluding on-call and administration, is around 36 to 38 per week. Collections reflects many variables that charges don't, including level of fee schedule, coding, billing competence, professional courtesy, charity, use of midlevels, etc. The best data for big groups comes from the Medical Group Management Association, and the best data for solo and small practices comes from the National Society of Certified Healthcare Business Consultants. Median collections for a full-time family practitioner is around $360,000 to $400,000, depending on location, whether you offer ancillary services, etc.
Earnings can have many definitions, but the preferred measure is to look at the total "benefit stream," including salary, profits, bonuses, retirement plan contributions, personal insurance, and all the other deductions of personal benefit. Median annual family practitioner earnings are about $160,000.
Send your practice management questions to email@example.com (please include your regular postal address). Answers to our readers' questions were provided by Michael D. Brown, CHBC, Health Care Economics, Indianapolis; Keith Borglum, Professional Management and Marketing, Santa Rosa, California; and Lee J. Johnson, JD, Mount Kisco, New York.