Northeast Medical Group, a family practice, has the following financial data and operational metrics:
Number of physicians 5
Total revenue $2,748,360
Total operating costs $1,557,615
Total procedures per physician 12,353
Patients per physician 1,941
Visits per physician 5,333
A. What is the group's revenue per physician?
$2,748,360 / 5 = $549,672 is the revenue per physician
B. What is the group's operating cost per physician?
$1,557,615 / 5 = $311,523 is the operating cost per physician
C. What is the group's total operating profit?
$2,748,360 - $1,557,615 = 1,190,745 total operating profit
D. What is the group's profit per physician?
$1,190,145 / 5 = $238,029 profit per physician
Profit per patient?
$238,029 / 1,941 =$122.63 profit per patient
Profit per visit?
$238,029 / 5,333 = $44.63
Profit per procedure?
$238,029 / 12,353 = 19.26
E. Assume that the group plans to reinvest $50, 000 of its profits in the practice.
(It plans to buy a new EKG machine.) Also, assume that the remainder of profits will be distributed equally to the group's physicians as salary. What compensation will each physician receive?