Should You Hire a Physician Extender?

Yesterday I had a meeting with doctor a who asked about the economics behind hiring a Nurse Practitioner and I set up the answer in a way he hadn’t thought of before. IT helped him make an immediate decision, so I thought I would share my thoughts with you.

Providers are the only staff members you can hire who are revenue-generating members of your team. Adding another receptionist or nurse/MA may make your office a better place for patients and help with patient satisfaction, but they are not revenue-generating in the work that they do.

Nurse practitioners and Physician Assistants are great ways to add people to your team who can help you generate more revenue.

Start with a break-even analysis. How many well checks do you do in an hour? How many sick visits? In pediatrics, depending on your practice and the ratio of Medicaid to commercial insurance, your average reimbursement for a sick visit ranges from $36-90 and your average reimbursement for well checks is $79-120. So, if you do 2 well checks and 2 sick visits in an hour, you generate $230 - $420 per hour for your practice.

Another way to look at it is that you make between $57 and $105 per patient you see (this is actually conservative because it is only your E&M codes and does not include anything else you get paid for).

Now look at the costs. What is the hourly rate for a Nurse Practitioner in your area? Let’s say you hire a seasoned nurse practitioner for $50/hour and you need an additional MA to help and you pay that person $15/hour. At about 10% to that to cover employment taxes and health insurance and your true hourly costs is about $55/hour for the NP and $16.50/hour for the MA, for a total hourly cost of $71.5 per hour.

We established above that you are collecting $57-105 off of a single patient visit so, therefore, even in a clinic that is 100% Medicaid, your new Nurse Practitioner would need to see 1.5 patients per hour or roughly 12 patients a day to pay for herself and be no financial risk to your practice.

In a practice that doesn’t accept Medicaid, 1 patient per hour more than covers the cost.

You can see that it is pretty easy to cover the cost of adding a Nurse Practitioner. What is the upside? Evaluate how many more patients you think you could add if you had additional provider coverage. Is it 10/day? 20/day? In a private practice that doesn’t accept Medicaid, the math looks like this:

**Note: this is based on a Pediatric Practice


$71.5/hour*8 hours/day * 4 days per week * 48 weeks = $109,824


10 patients/day * 4 days in a week *48 weeks*105 average reimbursement = $201,600

15 patients/day* 4 days in a week * 48 weeks * 105 average reimbursement = $302.400

20 patients/day * 4 days in a week * 48 weeks * 105 average reimbursement = $403,200

25 patients/day * 4 days in a week * 48 weeks * 105 average reimbursement = $504,000

Adjust for your own average reimbursement, the rates in your area and how many days/week you would like the extra help and you can do your own math to find your own break-even point and what your potential upside could be.

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