Calculating the Right Number of Staff for Your Medical Practice

As a business owner, you are always looking for ways to keep costs under control. There are multiple ways to manage this, and one very important area is maintaining an appropriate staffing level. How many support staff - who contribute to the profitability and productivity of the practice - do you need for each physician? How about billing staff? Your first step is finding a way to measure staff utilization.

First you will need to calculate your full-time equivalent (FTE) staff. An FTE is the equivalent of one person working full time:

• 8 hours/day;
• 5 days/week;
• 52 weeks/year; and
• 2,080 hours/year.

Examples:

• One person working 8 hours per day, 5 days per week = 1 FTE
• Two people each working 4 hours per day, 5 days per week = 1 FTE

Just know your total number of labor hours for one year, then divide by 2,080. This is the number of FTEs in your practice.

One recent benchmark study shows the average ratio at 0.75 administrative staff to one physician. This of course, might change based upon extenuating circumstances, so use this only as a yard-stick approach.

To calculate the number of billing staff you'll need, generally speaking, one medical biller can process and follow up on approximately 10,000 claims per year. Therefore, you can approximate the number of billing staff needed by the overall number of claims you process, per year. For instance, if your practice processes 40,500 claims per year, you would need to have 4.5 staff members for your billing department. Again, this may vary with the type of practice you have and your overall payer mix.

Knowing how slowly and disjointed the Worker's Compensation programs work, and if 50 percent of your payer mix is Worker's Comp claims, you may need more support staff to follow up on these claims. If you have a mostly Medicare and private payer mix, this should be spot-on for you.

Overall, I believe a lot of factors need to be considered, and a good practice manager will know the strengths and area of opportunities for all of the staff members. Once you have determined the number of support staff you may need, it's a good idea to sit down and evaluate everyone to see if this is an area that can be managed even better. Would it be less expensive for you to terminate that one employee whose performance has not been up to par, divvy up her responsibilities among the other workers, and provide a small raise in compensation for their efforts? It's something to think about.