Splitting Overhead

November 1, 2008

Do you have a “norm” for how multi-physician practices typically split overhead? I know most practices set compensation as the amount docs earn, less overhead. But how do some practices come up with the percentage of overhead for each doc, if some are more or less productive than others?

 

Question: Do you have a “norm” for how multi-physician practices typically split overhead? I know most practices set compensation as the amount docs earn, less overhead. But how do some practices come up with the percentage of overhead for each doc, if some are more or less productive than others?

Answer: Yes, overhead allocation can be a burden for multi-specialty groups as the primary-care docs generally can’t carry an equal burden of overhead relative to surgical or procedural specialists.

And, yes, compensation and overhead need to be looked at as a whole. There is no norm, per se. It’s more like negotiation for temporary truces that work for each practice.