Problem:
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
Required:
Question 1: What is the group's revenue per physician?
Question 2: What is the group's operating cost per physician?
Question 3: What is the group's total operating profit?
Question 4: What is the group's profit per physician? Per patient? Per visit? Per procedure?
Question 5: Assume that the group plans to reinvest $50,000 of its profits in the practice. (It plans to buy a new EKG [electrocardiogram] 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?
Note: Be sure to show how you arrived at your answer.