Thanks for your responses, Ibn and tkim. (MultiQ would not cooporate) I was doing a back of the envelope calculation based on averages. Can you tell me if it makes sense.
FOR A PCP:
Time per patient visit = 15 minutes.
Patients per day = 40 (8h / 15 min)
Reimbursement per patient = $42.50 (based on copay of $20 and insurance/medicare of $22.50)
Revenue per year = $42.50 x 40 patients per day x 250 working days per year (based on 50 weeks and 5 days a week)
Revenue per year = $425,000
Overhead = $212,500 (Based on 50% of revenue, which is what my uncle who is a PCP esmitated)
Therefore PCP's annual income = $212,500
Does this make sense (on average)?
Close - that's assuming that you get reimbursed for every visit (and none of your visits are downcoded or rejected when you submit your claims).
Some insurance will pay more. Others less. That's why your payor-mix is important in determining income. But that 8 hr day is without lunch, and you usually spend a few extra hours catching up on your charts/paperwork, as well as returning phone calls from patients who call the office, filing out forms (prior authorizations, social security disability forms, workman comps forms, etc), signing off on prescription refills request from patients/pharmacies, etc.
To make it more interesting since a lot of you guys have heard doctors complain about how a medicare cut (that is averted every year by congress) is bad for private small family practice. Let's use the above numbers, but with the 27.4% cut in medicare (that is proposed unless congress halts it)
FOR A PCP:
Time per patient visit = 15 minutes.
Patients per day = 40 (8h / 15 min)
Reimbursement per patient =
$42.50 $30.85 (27.4% cut)
Revenue per year =
$30.85 x 40 patients per day x 250 working days per year (based on 50 weeks and 5 days a week)
Revenue per year =
$308,500
Overhead = $212,500 (this doesn't change - with rent, insurnace premiums, utilities, staff salaries - more than likely this will go up but assume that your overhead didn't go up)
Therefore PCP's NEW annual income after 27.4% Medicare cut =
$96,000
So even though medicare cut 27.4%, your income certainly didn't drop by 27.4%. And that is why the AMA, the AOA, all the specialty colleges, and even the AARP lobbies congress every year to either delay, or fix the flawed Medicare Sustained Grown Rate Formula (and why physicians threaten to drop medicare if the cut goes through)
