What is a good overhead ratio for medical practices?
A good overhead ratio depends on the specialty: 55 to 65 percent of collections in general dentistry, with a national median near 62 percent (ZenOne, citing Overjet's 2025 data), 72.9 percent of net revenue in medical dermatology and 75.1 percent in cosmetic (FTI Consulting), and 80.8 percent in outpatient physical therapy (U.S. Physical Therapy's FY2025 10-K). An 80.8 percent ratio is normal in physical therapy and would be far too high in dentistry, which is why a single cross-specialty target is worse than none.
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Definition
Overhead ratio is total operating expenses (excluding owner compensation) divided by collections, expressed as a percentage.
The detail
Overhead ratios vary by specialty because of staffing intensity, supply consumption and procedure mix, and the specialty-by-specialty tables circulating online mostly trace back to nothing you can open. We publish only what we could verify on a page carrying the digits. General dentistry: ZenOne, citing Overjet's 2025 data, puts total overhead at 55 to 65 percent of collections with a national median of about 62 percent, and breaks it down as staff 25 to 30 percent, clinical supplies 4 to 6 percent, facility 6 to 10 percent and marketing 4 to 7 percent. Dermatology: FTI Consulting estimates operating expenses at 72.9 percent of net revenue for medical dermatology and 75.1 percent for cosmetic, from 2019 benchmarks, so adding an aesthetics line does not by itself lower the ratio. Physical therapy: U.S. Physical Therapy reports operating costs of 80.8 percent of net revenue for FY2025. In its company-wide table, salaries and related costs are 59.1 percent, rent, supplies, contract labour and other 18.0 percent, depreciation and amortization 2.7 percent and credit losses 1.0 percent, leaving 19.2 percent gross profit. USPH owned or managed 780 clinics in 44 states at the end of 2025, so read this as the cost structure of PT delivery at scale. Its corporate office costs add another 8.9 percent of net revenue, and a single-site owner carries that kind of admin inside the clinic, so compare your total against both lines, not the 80.8 percent alone. Public-company filings are an under-used free benchmark in outpatient healthcare: a listed pure-play has to publish its cost structure by line, audited, every year. For primary care, internal medicine, orthopedics, cardiology and OB/GYN there is no listed pure-play and MGMA's survey sits behind DataDive, so we will not restate figures we cannot link you to. What still works without a benchmark is the direction of travel: your own ratio measured the same way every month, broken down by category. A 5 percentage point reduction in overhead on a $5M practice is $250K of additional owner profit, and that arithmetic holds whatever your specialty median turns out to be.
ZenOne, citing Overjet's 2025 data, puts general dental overhead at 55 to 65 percent of collections, with a national median of about 62 percent.
FTI Consulting reports dermatology operating costs at 72.9% of net revenue for medical and 75.1% for cosmetic.
Source: FTI Consulting
U.S. Physical Therapy reports FY2025 operating costs at 80.8% of net revenue: salaries 59.1%, rent, supplies, contract labour and other 18.0%, depreciation and amortization 2.7% and credit losses 1.0%, for 19.2% gross profit before 8.9% of corporate office costs.
Source: U.S. Physical Therapy Inc. (NYSE: USPH), FY2025 Form 10-K
What this means for clinic owners
From Sorso
Compare your overhead category by category rather than in total. A total can mask the fact that your staff cost is fine but your supplies are out of control — the line-item view is where the actionable findings live. And where no published median exists for your specialty, track your own ratio over time instead. Your trend is a better signal than someone else's average.
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What is the average cost per patient encounter?
The clearest published figure comes from U.S. Physical Therapy: $86.15 of adjusted clinic operating cost per visit in 2025, of which $61.93 is salaries and related costs, so labor is 72% of the cost of a PT visit. On the revenue side, Concentra reports $147.42 of revenue per visit at its occupational health centers. Both are large multi-site operators, so read them as the economics of delivery at scale, then run the same arithmetic on your own trailing twelve months.
How much should I pay my practice manager?
BLS reports a median annual wage of $123,860 for medical and health services managers (May 2025), with the bottom 10 percent under $73,390 and the top 10 percent above $224,340. Outpatient settings sit below that headline median: BLS puts offices of physicians at $105,770 and outpatient care centers at $116,060, so budget from those rather than from the all-industry figure.
What is a good profit margin for a dental practice?
A healthy general dental practice keeps 35 to 45 percent of collections for the owner (pre-tax profit plus owner pay). That is a Sorso estimate: it is what remains after the 55 to 65 percent overhead range ZenOne cites from Overjet's 2025 data, and Overjet's national median overhead of about 62 percent leaves about 38 percent. Pay the owner a market salary for the dentistry and the normalized EBITDA margin is lower, and it rises with practice size.
What is the average revenue per provider?
There is no single average: revenue per provider depends on specialty, and the one broad survey that reports it, MGMA's, is a paid product. The published figures you can check are narrower. FTI Consulting's 2019 benchmarks put median revenue per FTE physician at $1.3 million in medical dermatology and $1.8 million in cosmetic dermatology, and in a Sorso calculation from CMS's 2024 provider-level data the median ophthalmologist received $167,145 in Medicare payments and the median orthopedic surgeon $96,684, from Medicare alone.
What is a good staff-to-provider ratio?
There is no single good ratio, because the published benchmarks count staff differently. AMGA's 2024 staffing survey of medical groups puts the median at 2.15 clinic staff FTEs per provider FTE, counting physicians and advanced practice clinicians as providers. MGMA counts total support staff per FTE physician instead: its analysis of 141 multispecialty groups found a median of 5.0, and physician-owned groups staff more heavily than hospital-owned ones.
When should I add a second clinic location?
Add a second location when the first one is full, profitable on normalized numbers and able to run without you every day, and when you can pay for the build-out and the months before the new site collects cash without touching your operating reserve.
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.
What is a typical EBITDA margin for a chiropractic practice in 2026?
No public survey publishes a chiropractic EBITDA margin, so any figure you see is an estimate. A Sorso estimate from the 2025 Chiropractic Economics survey puts the average DC-only practice at roughly 23 percent: the DC's average total compensation of $140,640, less the $79,200 BLS median wage for a chiropractor in May 2025, leaves about $61,000 above a market wage on $269,303 of average collections. Cash-pay and insurance-heavy practices spread widely around that, and a buyer will recompute the figure after normalizing owner pay, personal expenses and rent.
How much does a dental practice owner make?
A general dentist who owns a practice earned $228,980 on average in 2025 and $199,140 at the median, according to the ADA Health Policy Institute's Survey of Dental Practice. Specialist owners averaged $372,460 (median $259,550). Employed general dentists averaged $164,510, so on these figures owning a practice added about $64,000 a year on average and about $34,000 at the median.
Founder of Sorso and a CFA charterholder. Before Sorso, Stan spent 19 years in corporate finance at institutions including UniCredit and Société Générale — managing a $450M loan portfolio and making senior partner at a major mezzanine lender by 29 — then built a fractional CFO firm exclusively for outpatient healthcare clinics.
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