Once a direct care doctor is up and running with a full roster, the salary possibilities look really good. We are of the opinion that if a doctor has good standing in his community, a decent advertising budget, and a willingness to take on multiple roles within the office, then he or she can make MORE than their current salary within the insurance-based model. Of course, exactly how much and how much more will depend on their specialty and factors like patient number, monthly fee, and cost differentiation.
Here are examples of cost breakdowns to get you thinking about how you can make your own direct care medicine practice profitable and successful, for you and your patients.
Family medicine – all ages
Assume 600 patients, average $50 per member times 600 members times 12 months equals $360,000 per year less 30% overhead equals $240,000 salary pre-benefits and pre-taxes. This is over 50% more than the 2012 median salary of a family doctor according to a 2012 report from Medscape News.
Pediatrics – infant/juvenile/adolescent
Assume 1,200 patients averaging $25 per month per child times 1200 patients times 12 months equals $360,000, less the 30% overhead equals $240,000 salary pre-benefits and pre-taxes, the same as a family medicine doctor. Most pediatricians are accustomed to making more than this per year so there’s room to be flexible on the cost for membership or the number of members.
Geriatrics/internal medicine
Because they tend to take care of older and sicker patients, they can likely charge more per patient but each patient may require more time. This will require a modification to our model. Assume 400 patients, averaging $100 per month per patient times 400 patients times 12 months equals 480,000-150,000 for overhead equals $320 K per year. This comes out to practically twice what geriatric/internal medicine doctors are used to making.
Obstetrics/gynecology
Perhaps you can charge $1000 per pregnancy times hundred pregnancies per year = $100,000 of revenue. Add also yearly memberships for women’s health at $50 per month times 400 patients equals $240,000 + $100,000 = $340,000.
Cardiologist
Assuming 1000 patients, averaging $25 per month times 1000 patients times 12 months equals $300,000. You could earn additional revenue from procedures like echocardiograms, stress treadmills, etc. You’d likely see more than 1000 patients because they are only caring for the cardiovascular concerns. Depending on the model that overhead could be less if they contracted out with other insurance-free family doctors.
Neurology
This is for patients with seizures, migraines, tremors etc. Again, because this is not full scope family medicine, you can see a larger number of patients for a smaller number of specific diagnoses. Try perhaps $25 per patient times 1000 patients.
Psychiatrists/therapists
Assuming a mix of short 30-minute appointments and long 60-minute appointments. For rough math that equals an average of 45-minute appointments, that equals 10.6 appointments per eight our office day. Round down to 10 visits per day equals 40 visits per week times 50 weeks equals 2,000 appointments per year. Assuming a projected gross income of $300,000 with an overhead of $100,000, means $300,000 ÷ 2,000 visits per year equals $150 per 45-minute visit. This is likely overshooting the needed salary and overhead.
Do you specialize in another branch of medicine? Send us an email and let us know how you’re modeling your practice. We’re happy to provide counsel and/or opinion!