What is the average cost per patient encounter?
Cost per patient encounter is the fully loaded operating cost of delivering one visit, calculated by dividing total operating expense by total encounters.
Quick answer
Average cost per patient encounter ranges from $80 to $250 for primary care, $150 to $400 for specialty care, and $30 to $90 for physical therapy visits, depending on payer mix and overhead structure.
The detail
Cost per encounter varies dramatically by specialty because of staffing intensity, supply consumption, and visit length. MGMA Cost Survey data shows primary care operating cost per visit typically runs $80 to $200, with overhead at 55 to 65 percent of revenue. Specialty care like dermatology and orthopedics runs $150 to $400 per visit, with overhead at 45 to 55 percent of revenue. Physical therapy runs $30 to $90 per visit because most of the work is licensed-but-not-physician labor. Mental health runs $50 to $130 per visit. Med spa visits run $80 to $200 in operating cost but generate $300 to $1,500 in revenue, which is why margins are higher. To calculate your own number, sum total operating expense (excluding owner comp) for the trailing 12 months and divide by total billable encounters.
MGMA Cost Survey reports primary care total operating cost typically runs 55 to 65 percent of medical revenue.
Source: MGMA Cost and Revenue Data
Specialty care overhead runs 45 to 55 percent because procedure-based revenue scales faster than staffing cost.
Source: MGMA Cost Survey
AMA Physician Practice Benchmark Survey tracks practice expense per physician across specialties annually.
Source: AMA Physician Practice Benchmark
What this means for clinic owners
From Sorso
If your cost per encounter is rising faster than your revenue per encounter, you have a problem that no amount of patient volume will fix. Track this metric monthly. It is the cleanest signal of whether your operating model is healthy.
Related questions
What is a good overhead ratio for medical practices?
A good overhead ratio is 55 to 65 percent of collections for primary care, 50 to 60 percent for most specialties, and 60 to 72 percent for general dentistry, per MGMA Cost Survey data.
What is the average revenue per provider?
Average revenue per provider ranges from $400,000 to $1.2M annually depending on specialty, with primary care typically $500K to $750K, specialty care $700K to $1.5M, and procedural specialties exceeding $2M.
What is a good staff-to-provider ratio?
A good staff-to-provider ratio is 3.5 to 5.5 FTE staff per FTE provider for most outpatient specialties, with primary care typically 4 to 5, specialty care 3.5 to 4.5, and procedural specialties 5 to 7.
What financial KPIs should I track for my clinic?
The core 8 financial KPIs every clinic should track monthly are revenue, EBITDA, net collection rate, days in AR, denial rate, revenue per provider, overhead ratio, and rolling 13-week cash forecast.
Founder of Sorso. 19 years in corporate finance. Managed a $450M loan portfolio before building a fractional CFO firm exclusively for healthcare clinics.
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