pracTice managemenT | fInAnCIAlMAnAGEMEnT | focused on high dollar surgical


procedures saw a decline in revenue in 2009. Practices that had a balanced portfolio of cosmetic services were able to weather the storm a little better and in some cases, actually increased their revenue over 2008.


Revenue rate per hour per FTE physician The revenue rate per hour per fTE physician is another important number to monitor. The pertinence of this metric is that it helps physicians to understand the value of their time. This measurement also helps to achieve perspective with regard to the physician’s daily activities. The revenue rate per hour per fTE


Benchmark mean Net collected revenue per FTE physiciana ($) Revenue rate per hour per FTE physicianb ($) Net Collected revenue per FTE non-physician providerc Collected revenue by cosmetic providersd ($) Net collected revenue per FTE aestheticiane Revenue rate per hour per FTE aestheticianf Net collected revenue per FTE support staffg Operating expense ratioh (%) Non-provider payroll ratioi Rent expense ratioj (%) Marketing and advertising ratiok (%) Number of FTE support staff per FTE providerl KEY:


a Net collected revenue per FTE physician—the total physician-collected revenue divided by total FTE physicians. A full-time physician is assumed to work 1600 hours or more per year.


b Revenue rate per hour per FTE physician—the total physician collected revenue divided by the total hours worked by the physician. This measure provides an evaluation of physician productivity in relation to hours worked during the measured period.


c Net collected revenue per FTE non-physician provider—the total non-physician provider collected revenue divided by total FTE non-physician providers. Non-physician providers include physician assistants and nurse practitioners and full time is calculated at 2080 hours per year.


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d Net collected revenue by cosmetic providers—the total revenue collected for services performed by cosmetic providers. A cosmetic provider includes registered nurses, licensed practical nurses, medical assistants, and others who are performing injections, laser procedures, and other cosmetic services. This excludes licensed aestheticians, physician assistants, nurse practitioners, and other service providers performing non-medical procedures, i.e. massage therapists.


e Net collected revenue per aesthetician—total aesthetician-collected revenue divided by total FTE aestheticians (FTEs calculated at 2080 hours per year).


f Revenue rate per hour per FTE aesthetician—the total aesthetician-collected revenue divided by the total hours worked by the aestheticians employed by the practice.


(%) ($) ($) ($) ($) 1 395 469 872 399 385 283 482 145 675 70 345 545 62.8 15.3 5.1 4.4 4.82


physician is calculated by dividing the actual net collected revenue of all physicians in the practice by the total number of physician hours worked. The hours worked assumes 1600 hours for an fTE physician and is adjusted for part-time physicians working less than 1600 hours. The median revenue rate per hour per fTE physician for 2008 was $866 per hour, and the healthy benchmark ranged from $625 to $1000 per hour. The percentage growth over previous years is similar to the growth seen in the net collected revenue perfTE provider. The percentage growth over 2007 ($817 per hour) was 6%, and the percentage growth of 2007 over 2006 ($778 per hour) was 5.01%.


2006 median 1 244 391 778 349 450 209 281 122 026 59 313 716 62.8 14.9 4.5 3.2 4.33 mean 1 467 812 917 453 016 308 870 141 701 68 365 020 63.0 15.0 5.2 4.5 4.95


g Net collections per FTE support staff—the practice’s total collected revenue divided by the sum of FTEt support staff employees. A support staff employee includes cosmetic providers, licensed aestheticians, and non-physician providers working in a support capacity, i.e. those not producing revenues independently. A full-time support staff employee is assumed to work 2080 hours per annum.


h Operating expense ratio—total expenses (cost of goods sold and operating expenses) divided by the total net collected revenue as reported on the practice’s financial statements or tax return. Operating expenses exclude provider compensation, bonuses, retirement contributions, automobile expenses, as well as depreciation.


Net collected revenue per FTE non-physician provider Physician assistants and nurse practitioners continue to make a significant contribution to the profitability and quality of patient care in the aesthetic medical practice. The median net collected revenue value for 2008 was $426 468, which was an 8.89% growth over 2007. The 2008 growth percentage was lower than the 2007 versus 2006 growth percentage of 12.08%. The median value for 2007 was $391 667 and for 2006 it was $349 450. The number of physician assistants


and nurse practitioners continues to increase as more physicians understand the positive impact achieved by


2007 median 1 306 776 817 391 667 199 840 125 799 61 322 991 62.2 14.3 4.7 3.4 4.46 2008 mean 1478829 924 485 360 300 421 152 412 73 337 748 65.3 15.7 5.7 4.7 5.40 median 1 385 389 866 426 768 207 636 132 281 64 304 497 66.0 15.6 5.0 3.7 4.99


i Non-provider payroll ratio—gross non-provider payroll divided by the total net collected revenue as reported on the practice’s financial statements or tax return.


j Rent expense ratio—total rent expense or occupancy costs divided by the total net collected revenue as reported on the practice’s financial statements or tax return.


k Marketing and advertising ratio—total marketing and advertising costs divided by the total net collected revenue as reported on the practice’s financial statements or tax return.


l Support staff per FTE provider—total FTE support staff divided by the sum of FTE physicians and non-physician providers.


May 2011 | prime-journal.com


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