Specialty: 1 of 12 specialties shown here Region: National or 1 of 4 regions shown here

CHARGES

Annual Gross Charges $454,878 – 597,028 Medicare 18 – 28% Medicaid 2 – 8% Other Insurance 58 – 68% Self Pay 3 – 7% Lab Charges Percentage 12 – 13% X-ray Charges Percentage 2 – 6% Adjustments Percentage 28 – 32% COLLECTIONS

Annual Collections $360,722 – 473,447 Gross Collection Percentage 72 – 76% Net Collection Percentage 96 – 98% Accounts Receivable Ratio 1.1 – 2.1 Days Gross Charges in A/R 42 – 52 A/R Percentage 0 – 30 days 58 – 62% A/R Percentage over 90 days 21 – 25% Bad Debt Percentage 1.2 – 2.2% EXPENSES

Total Practice Expenses $215,992 – 283,490 Overhead Percentage 58 – 62% Payroll 24 – 28% Medical Supplies & Drugs 3.6 – 4.6% Business Supplies 2 – 3% Office Space 6.4 – 7.4% Laboratory 1.4 – 2.4% Professional Liability 1.8 – 2.8% Employee Benefits 3.6 – 5.6% Equipment & Furnishings 1.2 – 2.2% Outside Professional Services 1.1 – 1.5% Promotion/Marketing .3 – .5%

© 2007 Practice Support Resources, Inc. 2

Specialty: 1 of 12 specialties shown here Region: National or 1 of 4 regions shown here

PHYSICIAN COMPENSATION & BENEFITS Established Physician $152,968 – 169,069 New Physician $115,050 – 140,617 Compensation as % of Gross Charges 34 – 38% Compensation as % of Collections 51 – 55% Physician Benefits as % of Collections 5 – 7% FINANCIAL RATIOS Operating Margin 38 – 42% Liabilities Percentage 3.4 – 4.4% Current Ratio 2.0 – 3.0 EMPLOYEE STAFFING & SALARIES Staff Ratio – Total Employees 3.3 – 4.3 Staff Ratio – Billing & Collecting .6 – 1.0 Staff Ratio – Nursing 1.1 – 1.5 Receptionist $22,280 – 26,250 RN $38,550 – 44,120 Medical Assistant $23,600 – 27,725 LPN $29,860 – 31,815 Lab Technician $29,450 – 37,850 Insurance Secretary $24,250 – 28,050 Billing Clerk $26,820 – 31,680 Medical Secretary/Transcriptionist $25,720 – 28,810 Office Manager $43,646 – 47,646 Administrator $68,003 – 73,003 Physician Assistant $72,922 – 80,598 Nurse Practitioner $71,529 – 79,059 OTHER Total Active Patients 1,931 – 2,574 Ambulatory Patient Visits per week 98 – 118 Hospital Inpatient Visits per week 7 – 13 New Patients per week 10 – 15 Surgery Procedures per week 6 – 10 Office Hours per week 36 – 40 Physician to Population Ratio 1:4,000

© 2008 Practice Support Resources, Inc. 25

DEFINITIONS

Figures shown are per physician (one full time practicing physician by specialty).

Accounts Receivable Ratio: Total accounts receivable divided by average monthly gross fee for service charges; also referred to as number of months of receivables outstanding. Adjustments Percentage: The amount not collected on fees for services due to contractual write-offs, charitable adjustments, free services and other discounts divided by gross charges. Administrator: Is responsible for daily operations of a large group medical practice without clerical duties. Evaluates and makes decisions on marketing, financial planning, budgeting, capital and equipment needs; goals of the practice, accounting policies, physician compensation and reimbursement; planning and implementing computer information system; oversees other managers, department heads or supervisory personnel; manages quality control standards established by physicians; works with attorney, accountant and other professional services; managed care and third party payor contracting and negotiations; and usually reports to CEO, governing body or corporate directors. Salary ranges do not include administrators of groups with 35 or more FTE physicians. Ambulatory Patient Visits per Week: Number of total contacts between physician and patient where service or treatment is given. Includes mostly office visits but also emergency room, nursing care facility and patient home visits. It does not include in-hospital visits or surgery. Based upon average number of work weeks in a year for physician at 47 - 48. Annual Collections: The total receipts (collections) for patient services per physician. Does not include other practice income received. Annual Gross Charges: Charges billed by the physician practice for professional services including non-physician provider and ancillary services. Includes charges for technical components, drugs, injections, lab, radiology and diagnostic procedures. A/R Percentage 0 – 30 Days: Percent of total accounts receivable that are 30 days or less. This is determined from a practice’s accounts receivable aging report. A/R Percentage Over 90 Days: Percent of total accounts receivable that are past due by 90 days and over. Bad Debt Percentage: Bad debts (amounts written off as not collectible, turned over to collection agency, and amounts that represent losses from receiving less than was billed) divided by total adjusted charges (gross charges minus contractuals, professional, charity and other discounts). Business Supplies: Percentage representing the amount of expense for clerical and administrative supplies, books, subscriptions, forms, computer supplies, stationary & printing costs divided by total practice collections. Compensation as % of Collections (for physician’s services): The annual physician compensation amount divided by the total collections for the physician’s professional services (excluding collections for ancillary services, technical and other provider services). Note: This is not the same as Annual Collections.

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Compensation as % of Gross Charges (for physician services): The annual physician compensation amount divided by the gross charges for the physician’s professional services (excluding charges for ancillary, technical and other provider services). Note: This is not the same as annual gross charges.

Compensation Established Physician: The amount of profit, or collections minus operating expenses. This equates to the gross take home pay for one FTE physicians. Ranges represent mostly physicians in practice over two years.

Compensation New Physician: This is an average range of compensation received for 1 FTE physician during his/her first year in practice. This does not include other additional production bonuses or compensation enhancements that may be offered. It should be noted that there are many practice situations (solo or group versus hospital based) which can vary the amount earned by new physicians. Current Ratio: Current assets amount as shown on balance statement of practice divided by current liabilities. Measures how cash received by practice covers cash needs of practice. Days Gross Charges in A/R: This is the number of days of charges that are in A/R.

Total Account Receivable Annual Gross Charges ÷ by 365.

Employee Benefits: Percentage representing the amount of expense for employee payroll taxes, FICA, health and life insurance premiums, retirement or profit sharing divided by total practice collections. Employee Salaries: Average salaries and wages by position title. Equipment & Furnishings: Percentage representing the amount of expense for equipment rental, depreciation costs and maintenance of equipment and furniture divided by collections. Gross Collection Percentage: Annual collections (receipts minus refunds) on fees for services divided by annual gross charges. Note: The specific figures shown for annual collections and annual gross charges are overall ranges. Thus, dividing these exact figures do not calculate the range of collection percentages shown. Hospital Inpatient Visits per Week: Weekly visits made by physician to patients for history, exam or consultation as an inpatient. Lab Charges Percentage: Total charges for lab procedures in the physician practice (both professional & technical components) divided by the total gross charges for all services in the physician practice. Laboratory: Percentage representing the amount of expense for in-office lab supplies, minor equipment and outside service fees divided by total practice collections. Liabilities Percentage: Current liabilities (as shown on the balance sheet for a practice) such as payroll and payables that will be due and require payment from the practice assets within one year, divided by the total practice collections.

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STATS Comparison Worksheet - Sample

_____________________________ _____________________________ Physician Medical Specialty

Indicator PSR Benchmark Range

Actual Practice Figures

Variance Comments

Example One: Annual Gross

Charges $300,000-400,000 $250,000 -$50,000

Example Two: Annual Gross

Charges $300,000-400,000 $410,000 +$10,000

How to use... 1. Choose which indicators you wish to measure 2. Insert the practice’s actual figures 3. Under the variance column, if the actual figures fall within the PSR benchmark

range no variance is recorded. If the actual figures are below or above the range, then calculate the + or – difference and enter. Add comments regarding variance.

4. Very important: PSR benchmark ranges with asterisks * are for one full time physician in the specialty. Thus, your actual figures should be for 1 Dr.

This example shows a PSR Benchmark range of $300,000-400,000. The actual practice figure is $250,000. The variance calculates at $300,000 (the left side lower figure of the range) minus $250,000 (actual figure) = -$50,000 Variance This means the annual gross charges are below the range of all practices surveyed.

This example shows the same PSR benchmark range of $300,000-400,000 with an actual practice figure of $410,000. The variance calculates at $410,000-400,000 (the right side higher figure of range) = +$10,000 Variance. This means the annual gross charges are above the average range of all practices surveyed.

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STATS Comparison Worksheet

_____________________________ _____________________________ Physician Medical Specialty

Indicator PSR Benchmark Range

Actual Practice Figures

Variance Comments

Annual Gross Charges *

Medicare

Medicaid

Other Insurance

Self Pay

Lab Charges Percentage

X-ray Charges Percentage

Adjustments Percentage

Annual Collections *

Gross Collection Percentage

Net Collection Percentage

Accounts Receivable Ratio

Days Gross Charges in A/R

A/R Percentage 0-30 days

A/R Percentage over 90 days

Bad Debt Percentage

Total Practice Expenses *

Overhead Percentage

Payroll

How to use... 5. Choose which indicators you wish to measure 6. Insert the practice’s actual figures 7. Under the variance column, if the actual figures fall within the PSR benchmark

range no variance is recorded. If the actual figures are below or above the range, then calculate the + or – difference and enter. Add comments regarding variance.

8. Very important: PSR benchmark ranges with asterisks * are for one full time physician in the specialty. Thus, your actual figures should be for 1 Dr.

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STATS Comparison Worksheet

_____________________________ _____________________________

Physician Medical Specialty

Indicator PSR Benchmark Range

Actual Practice Figures

Variance Comments

Medical Supplies & Drugs

Business Supplies

Office Space Laboratory

Professional Liability Employee Benefits

Equipment & Furnishings

Outside Professional

Services

Promotion/Marketing Compensation Est.

Physician *

Compensation New Physician *

Compensation as %

of Gross Charges

Compensation as % of Collections

Physician Benefits as

% of Collections

Operating Margin Liabilities Percentage

Current Ratio

Staff Ratio – Total Employees *

Staff Ratio – Billing

& Collecting *

Staff Ratio – Nursing *

Receptionist

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STATS Comparison Worksheet

_____________________________ _____________________________

Physician Medical Specialty

Indicator PSR Benchmark Range

Actual Practice Figures

Variance Comments

RN Medical Assistant

LPN Lab Technician

Insurance Secretary

Billing Clerk

Medical Secretary/

Transcriptionist

Office Manager Administrator

Physician Assistant

Nurse

Practitioner

Total Active Patients *

Ambulatory *

Patient Visits per week

Hospital Inpatient Visits per week *

New Patients per

week *

Surgery Procedures per

week *

Patient Visit Hours per week*