Each part of this formula could easily change. And, using those numbers, the nurse practitioner’s annual salary should be anywhere from $130,000 to $160,000. This includes physicians, who in addition to providing clinically effective care for patients, must also serve as the financial revenue generator for the facility. The state and local tax income generated by physicians annually is $65.2 billion. Maybe only 80 percent of patients at a given clinic pay their bills. Since you’re reading this, you’ve likely made the decision to take on debt. “Congress must take rapid and decisive action with the fourth stimulus bill to make sure that the U.S.’s primary care practices remain viable, including investing in a Medicare and Medicaid per patient monthly payment for the balance of 2020,“ said Ann Greiner, president and CEO of the Primary Care … While automating some aspects of prescription refills is possible, certain costs remain. In this scenario, nurse practitioners share in the company profits, and none of the revenue is given to a supervising physician. Primary care accounts for nearly $250 billion of annual industry revenue and over 55% of total office-based physician visits 1,2 However, the systematic under-investment of this integral component of the healthcare system has created a So interesting! All rights reserved. average revenue generated by physicians in various specialties. This makes primary care providers both highly coveted and highly recruited by healthcare organizations. transforming primary care practices to such models can be significant. The average doctor meets with 4 to 5 patients per hour, and can meet with patients 7 hours a day, 4 days a week. Both Dr. Buppert and Dr. Van Leuven encourage nurse practitioners to use this information when they are negotiating their salary and benefits. The Royal College of General Practitioners, among others, run one- and two-day training courses for GPs which open up plenty of additional revenue streams. One full-time orthopedist can generate $2.7 million annually for their affiliated service provider. Let’s consider a typical private medical practice with the following financials: Annual net sales: $600,000; Gross profit: $585,000; Net income: $80,000; EBIT: $82,500 This approach gives primary care practices steady revenue while offering more flexibility in how they provide care. These expenses include rent, benefits, continuing education stipend, supplies, malpractice insurance, and depreciation of medical equipment. The report makes interesting reading, detailing a primary care service facing significant challenges 5-7. Medical practice characteristics differed from physician characteristics. Also, this formula is based on a fee-for-service model, which is slowly being phased out by the Affordable Care Act. To calculate the amount of revenue a primary care nurse practitioner can generate, I used the formula provided by Dr. Carolyn Buppert in Chapter 10 of her textbook, Nurse Practitioner’s Business Practice and Legal Guide, Fifth Edition: According to Dr. Buppert, primary care nurse practitioners see an average of 24 patients per day and are reimbursed an average of $70 per patient. The purpose of this post is to discuss the monetary value of nurse practitioners and what it means for hospitals and clinics who hire them. But how much revenue can physicians generate, particularly for FQHCs? Although these are modest dollar amounts to entities with many millions or billions in revenue, to an average independent primary care practice that is … A team of researchers has published an “ahead of print” article online in Health Affairs, one whose analysis confirms other analyses and data so far available, which have found that the COVID-19 pandemic has had a massive financial impact on primary care practices in the United States, with anticipated average 2020 calendar-year losses of $67,774 in gross revenue per full-time physician, … Example: using valuation multiples to value a primary care medical practice. Sounds like a dream job, right? © 2021 UHC Solutions. Primary care providers generate extensive ROI via patient referrals, hospital admissions, tests and inpatient treatments. One Centerpointe Drive, Suite 580 In 2016, primary-care physicians fielded 54% of all patient visits to doctors' offices. To calculate the nurse practitioner’s deserved salary, Dr. Buppert deducts the following amounts from nurse practitioner–generated revenue: The cost of practice expenses or hospital overhead per nurse practitioner varies widely, from 20 percent in large practices to 50 percent in very small practices. Using these formulas, the revenue generated by a primary care nurse practitioner ranges from around $217,000 to $350,000. In her book, Dr. Buppert explains that employers often displace this cost, which is usually around 15 percent of their generated revenue, onto nurse practitioners. With this estimate our doctor is bringing in a gross revenue per month = $41,666. She allots only four weeks of time off, resulting in annual revenue of $216,960. If the nurse practitioner does not receive health insurance benefits or paid time off, which may be the case for NPs working in some part-time or locum tenens roles, this percentage would be lower. In this scenario using Dr. Buppert’s formula, the nurse practitioner brings in $1,680 per day. Primary care receives less than 7% of total U.S. health-care expenditures. Practices in the high-value cohort spent 34 percent less. How Much Revenue Does a Primary Care Nurse Practitioner Generate? One of the most important considerations dec... © Copyright 2021 Barton Associates All Rights Reserved, American Association of Nurse Practitioners (AANP), hospital or practice at which you’re interviewing. To make numbers simple, lets say that the average primary care doctor bills for about $500,000 in insurance reimbursements per year. 4.5 patients x 7 hours x 4 days per week x 4 weeks per month x $35 per hour = $17,640 in revenue per month x 12 months = $211,680. Adjusting revenue for the salary a practice much pay each respective provider narrows the gap in revenue generating potential between nurse practitioners and physicians. In 2016, the average cost per visit to a primary care physician was $106 compared to $103 for an office visit to a NP or PA. Every state saw declines in office visits to PCPs and an increase in office visits to NPs and PAs between 2012 and 2016. A specialist, on average, generates around $1.6 million each year. Average Revenue Generated by Primary Care Physicians and Specialists Dawn Pascale Primary care — defined as family practice, general internal medicine and pediatrics – providers draw in their fair share of revenue for the organizations that employ them, averaging nearly $1.5 million for the practices and health systems they serve. Her background is in child and adolescent psychiatry as well as psychosomatic medicine, and she currently works as a researcher Microsoft. Downstream analysis enabled them to rank their primary care groups based on productivity and profit margins generated to measure and quantify the true value of their employed physician groups. When it comes time to value a practice, many rely solely on their accountant to tell them the value of their practice. The data comes from a 2016 Merritt-Hawkins report on physician salary surveys. Today, about 75 percent of nurse practitioners practice in primary care, compared with about 33 percent of physicians. Healthcare providers note this as “downstream revenue,” which is particularly important to healthcare providers and their long-term fiscal solvency. Dollar for dollar, the primary care provider is both a cost-effective clinician by salary output as well as a revenue generator for the healthcare system as a whole. Results—During 2003–04, an average of 311,200 office-based physicians practiced in an estimated 161,200 medical practices in the United States. Neurosurgeons followed cardiologists and general surgeons, generating $2.2 million on average for their facilities. Although 35.8 percent of office-based physicians were in solo practice, 69.2 percent of medical practices They found that: Above all, this data goes to show that physicians of all specialties are a value to the healthcare society and play an important role in the economy. Results of the survey also may be of interest to physicians, policy makers, journalists and others who follow physician staffing, compensation, and related trends. Nationally, GP practices were paid an average of £152.04 per patient in 2017-18 – a marginal increase of 0.4 from the year before. Nurse practitioners who are knowledgeable about billing transactions, company profits, and financial transactions can become better partners in healthcare practices. Assuming a 90 percent collection rate and six weeks of time off, the primary care nurse practitioner brings in $347,760 per year. ) Meanwhile, the income gap between primary care and non-primary-care physicians has decreased from 44.6 percent in 2011 to 41 percent in 2015, according to AAFP data. opportunity@UHCsolutions.com. Fax: 503.388.7598 They found that, under a variety of scenarios, primary care practices would lose a significant amount of revenue (an average of $325,000 per typical five-person practice) from fee-for-service payments, even under the relatively optimistic assumption that practices quickly pivoted to virtual care to recoup revenue from lost in-person visits. Website by Veritas Web Design. Let’s say you can meet with 4.5 patients per hour. Deducting these percentages from the primary care nurse practitioner who generates $347,760 per year leads to a salary of $159,621. She is a strong advocate for empowering nurses, and she fiercely believes that nurses should play a pivotal role in shaping modern healthcare. And, using those numbers, the nurse practitioner’s annual salary should be anywhere from $130,000 to $160,000. A specialist, on average, generates around $1.6 million each year. The highest producing physicians today are orthopedic surgeons. These high-value primary care practices notably reduced healthcare spending significantly more than average-value sites. Maybe the practice owner wants to collect a 15 percent profit rather than 10 percent. Nationally, the average primary care doctor generates approximately $1.4 million in revenue for their organization annually. NPs come out on top when salary enters the equation making them a more profitable hire for this practice scenario. Coming in second is cardiology, whose clinicians generate the second-highest amount each year, at $2.4 million. Connect with our health center recruiting experts today about finding the right revenue generators for your team. This article would not be possible without two of my favorite nurse practitioner textbooks: Dr. Melissa DeCapua is a board-certified psychiatric nurse practitioner who graduated from Vanderbilt University. Each year physicians generate $1.6 trillion for their healthcare system and the American economy. “FQHCs must evolve from their roots as “mission-first, margin-maybe” to organizations with a foundation of “no margin, no mission in order to be successful.” Introduction 121181_2019-Revenue-Survey.indd 3 2/22/19 7:08 AM Meanwhile, although payment systems are moving to outcome and value measures, the revenue for most primary care practices continues to be fee-for-serviced based, and alternate payment models (APM) are built on top of fee-for-service. The primary care clinician is the entry point for most patients into the healthcare service delivery mechanism. In contrast, the average primary care physician earns $160,000, which is 48 percent more. The highest producing physicians today are orthopedic surgeons. 47 The hypothetical practice assumes 25 patients per day per provider, 220 clinical days annually, and $100.00 average payment per visit. The 2015 compensation survey conducted by the American Association of Nurse Practitioners (AANP) found that the average total income for a primary care nurse practitioner was around $108,000. Any FQHC leadership team will tell you there is no mission without margin. Extend Practice Hours: Offering evening and weekend office appointments will likely heighten … Furthermore, practice profit is the amount the employer wishes to keep for themselves, which is usually around 10 percent. Healthcare organizations of all types must pay close attention to the revenue-generating engines of their facilities. That’s why it’s important to do your own calculations based on your individual situation, or the situation you expect at the hospital or practice at which you’re interviewing. 8 Things You Should Know About Nurse Practitioners and Physician Assistants. While the MGMA report does point to greater overall revenues when NPs are used, the benefit of using NPs varies by practice. With 40 percent overhead, this leaves the primary care nurse practitioner with a salary of around $130,000. It’s the headline figure from the annual NHS Payments to General Practice report, published in December, that collects data on all payments made to primary care. The average family physician salary is $189,000. Lake Oswego, OR 97035 However, primary care providers offer healthcare organizations great ROI. Specialties for Physician Assistants: What’s the Cost to Primary Care? 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