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Determining net collections and overhead

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  • Determining net collections and overhead

    Any advice for figuring out what the typical net collections and overhead might be for a small (1 or 2) person ENT group?

  • #2
    are you saying that you want to know those numbers for your own group or for a group that you are trying join?

    In our group, the overhead is calculated on our profit and loss statement every month. I have heard of some people who don't know this number and say they have to wait until the end of the year to know what their overhead is.  I think most well run practices know what their overhead percentage is.

    As per the net collections, this has been harder to nail down as some payors or patients can take multiple months to pay.  What I have done is taken my charges from 4 months prior (give everyone time to pay), subtract out the negotiated adjustments, and calculate the collection percentage that way.  I find mine can varying, but really this should be in the high 90s.  Your billing or collection people should be able to run those numbers.


    • #3
      Thanks.  I was actually interested in the real numbers.  Looking at joining a practice and wanted to compare.  Specifically, I'm wondering what the net collections (prior to paying overhead) is after 1 year for a single general ENT surgeon.  Would you say $1 million, $1.5 million, $2 million?  I'm sure it's a bell curve but wondering what you think the median value might be.


      • #4
        The Academy put out this information in the socioeconomic survey a year or so ago.


        • #5
          Thanks.  I found the page here  Of course the links are all broken so the data is not available. I'll contract them to see if they can update it.

          Do you have any insight off hand on what some of those numbers might be nowdays?


          • #6
            No. But you need to be logged into the Academy’s website to see it. Maybe that was the problem.


            • #7
              Ya, I am logged in.  Still doesn't work.  Thanks though.


              • #8
                For the most part, I never understood why overhead was relayed as a %.  Would it not be a moving target based on revenues/net collections and also any increase or decreasing expenses?  Unless the OH % that is being used is based on historical numbers or a trend, which is hopefully what it is.  I would think that economies of scale would come in to play as a new doctor is being added to the practice (depending on efficiency) that the OH as a % would decrease as the additional revenues would outweigh any associated expenses.  I believe I may be in the minority here because it seems that a lot of practices speak of overhead as a percentage rather than a estimated dollar amount.