Determining your cost per client -
or how to determine if you want to
join an insurance network.
Determining your cost per client will help
you decide if you are charging what you need to make a living. Are you
making enough to cover expenses and get ahead? Will you be able to make a
living if you join an HMO or PPO? How much does it cost you to work on
each client?
It will also assist you in determining
if you want to register as a provider with local insurance companies. (As far as
I know only WA and FL massage therapists are allowed to sign up with a
contracted provider at this time.)
If what they pay is less than your cost per client can you afford to sign
up with them. If you want to sign up with them, how can you change
your expenses or change the number of client visits. If your monthly
expenses will remain the same and client volume increases, your cost per
client and profits increase. If you join a HMO/Insurance Co. will
it increase you expenses? If so by how much to reconfigure your cost
per client.
-
Compute your office overhead for a month:
You can take the last 12 months and divide by 12.
| Salary |
|
| Rent |
|
| Other Salaries |
|
| Equipment Leases |
|
| Tables |
|
| Malpractice Insurance |
|
| Licensing Fees |
|
| Lotions/Oils |
|
| Sheets |
|
| Laundry |
|
| Music |
|
| Utilities |
|
| Office Supplies |
|
| Water |
|
| Magazines |
|
| Books |
|
| Copies |
|
| Billing Services |
|
| Association Fees |
|
| Marketing |
|
| Advertising |
|
|
|
|
|
|
|
|
|
|
|
2. Compute the number of patients for the month.
You can use last years patients divided by 12 or estimate the number for
this year.
3. Cost per patient = Total monthly expenses____
divided by Total monthly patient visits
4. Evaluate
f you are planning on joining a HMO or PPO, what
is the expected income per treatment. Is it higher than the cost per
patient or less than the cost per patient?
How much will your cost per patient vary when the
number of clients increases due to becoming a member? Will you have an
increased volume that will make the cost per client less? Will you get too many
clients that you will have to hire office support to do the extra work
involved?
