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The Rising Cost of Operating a Medical Practice

The Rising Cost of Operating a Medical Practice

In most industries, if the cost of raw materials goes up, the price of the end product goes up.  If the cost of doing business goes up, the company passes that cost onto the consumer. That's not the case in medicine. 

How much does it cost do get a new patient even before that person walks in the door?  When you exclude things like salary, rent, utilities, how much do practices spend on each new patient?  Well, if you have forms for them to fill out, then depending on number of pages and how and where you have them printed, it can cost 25 cents to a dollar.  Then there is the cost of postage, which can be 47 cents or 70 cents if it weighs 2 ounces.  Since I have started practice seven years ago, the cost of a 2 ounce stamp has gone up about 10 cents.  What is ten cents, you say? Well, if you mail 1000 forms out a year, it’s $100.  No it won’t break the bank, but it is the equivalent of an office visit, and that is just the tip of the iceberg.

Once the patient does come in, what other expenses are there?  There is the thermometer cover and the table paper.  A trip to the bathroom means toilet paper and paper towels.  A lab slip and the visit summary must be printed, so that's paper and toner.  Patients often request a copy of their labs, so this means more paper and toner.  While many prescriptions are sent electronically, some patients want or need hard copies, and prescription pads are surprisingly expensive. 

And then of course there are utilities.  Gas, electricity, phone, cell phones for staff members, and internet.  None of these are getting any cheaper. And every year it costs me more to offer medical benefits to the staff.  My accountant raised his rates. Our office condo association raised its dues.

So, year after year, expenses go up.  Can I pass this on to the patients or insurance companies?  No.  Unlike any other business, I have no power over what I am paid for my time and effort, regardless of how much I spend to keep the business running.  As a matter of fact, I am asked to work harder, produce more paperwork, document more under threat of earning less.  Many small practices are having to close because it just isn’t feasible to stay in private practice under these circumstances. No, we’re not in this for the money, but money is necessary to keep the lights on.

 
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