Malpractice is $130K per physician. Is OB still worth it?
Strategic financial guidance for OB-GYN practice owners making the hardest decisions in medicine: service line strategy, payer mix, and practice sustainability.
A 4-minute test your accountant hopes you skip.
At a glance
Is This Right for You?
This service is for OB-GYN practice owners facing these challenges:
Need accurate books first? Our Accounting service for OB-GYN practices may be a better starting point.
What's Included
How a Fractional CFO Works for OB-GYN Practices
OB-GYN-specific strategic leadership that goes beyond reporting.
Service Line Strategy
- •OB vs GYN profitability analysis and strategic options
- •OB reduction or elimination financial modeling
- •Aesthetic and wellness service feasibility
- •In-office procedure expansion ROI
Payer Mix Management
- •Medicaid profitability analysis and volume strategy
- •Commercial payer contract optimization
- •Self-pay pricing and cash-pay service development
Staffing & Provider Strategy
- •Midwife or NP financial model with credentialing timeline
- •Call coverage cost analysis and optimization
- •Compensation structure design for multi-provider groups
- •Locum tenens vs permanent hire cost comparison
Valuation & Planning
- •Practice valuation with OB-GYN-specific factors
- •Malpractice tail liability planning
- •Succession planning for OB-dependent practices
Results
What OB-GYN Practices Experience
| Metric | Typical Outcome |
|---|---|
| Revenue recognition fix | Stable monthly P&Ls enabling $295K in previously deferred investment decisions |
| In-office procedure capture | $72,000 annual revenue recovered from charge capture corrections |
| Payer strategy | Medicaid volume capped and commercial patient recruitment increased, improving average revenue per visit by 8% |
Case Study
See The System In Action
4-physician OB-GYN practice, two locations, delivering 600 babies per year. Revenue was $3.8M but profit had dropped from 22% to 13% over four years. The physicians blamed declining reimbursements and rising malpractice costs, but the root causes were more varied.
What we found:
- •Global OB revenue recognition was causing monthly P&L swings of $80K to $120K. The accounting methodology had never been updated for the practice's volume, making financial reporting unreliable for management decisions
- •Malpractice costs were $520K annually ($130K per physician) but OB services contributed only 38% of revenue. The GYN side was effectively subsidizing OB's liability costs without any visibility
- •In-office GYN procedures (IUD insertions, colposcopies, biopsies) were performed 1,400 times per year but charges were missed on 18% of procedures. That is $72K in lost annual revenue
- •Medicaid patients (27% of volume) were generating a negative margin after fully loaded costs. The practice was losing $14 per Medicaid visit but had never calculated this
The results
Stable monthly P&Ls enabling $295K in previously deferred investment decisions
Revenue recognition fix
$72,000 annual revenue recovered from charge capture corrections
In-office procedure capture
Medicaid volume capped and commercial patient recruitment increased, improving average revenue per visit by 8%
Payer strategy
“We had no idea our Medicaid patients were costing us money. Not breaking even — actually losing money on every visit. That changed how we think about our schedule.”
— Managing Partner, Southeast
Think your OB-GYN practice has similar potential?
Common Questions About Fractional CFO for OB-GYN Practices
Stop guessing. Start leading your OB-GYN practice with data.
Take the 4-minute financial assessment—and find out if your OB-GYN practice is ready for strategic CFO leadership.
The test your accountant hopes you skip.