Professional services
Medical Practice Labor Cost Calculator
Works labour cost per visit, which is the figure that connects payroll to reimbursement.
Result
Utilisation is applied to the hourly cost rather than treated separately, because an unfilled slot still costs the provider's time. Dividing compensation by scheduled hours rather than filled hours understates the true cost of every visit, and the gap is exactly the unfilled capacity. This is clinical labour only: it excludes occupancy, administrative and billing staff, supplies, insurance and equipment, so the contribution figure is what remains toward those rather than profit. Provider minutes and support minutes are deliberately separate because they differ per appointment type, and a visit that is short for the provider but long for support staff costs more than the schedule suggests.
Get a Free Business AuditHow the calculation works
Burdened labour cost divided by visits completed gives labour cost per visit, which can be compared directly against the contribution each visit produces. That comparison is what turns a payroll figure into a decision, since labour is the largest controllable cost in most practices and reimbursement per visit is largely fixed by contract.
What moves the number
- Burdened cost across clinical and administrative staff.
- Visits completed, which is the denominator.
- Provider productivity, which the support structure influences.
- Visit mix and durations.
Where this one goes wrong
Because reimbursement per visit is set by payer contracts rather than by the practice, labour cost per visit is one of the few variables the practice genuinely controls, and it improves through throughput more readily than through pay. A practice that fills its schedule and runs rooms efficiently reduces labour cost per visit without reducing anyone's pay. Cutting staff to lower the numerator usually lowers the denominator further and makes the ratio worse.
Before you quote
- Compare labour cost per visit against contribution per visit.
- Improve the ratio through throughput before considering pay.
- Check that staff cuts would not reduce visits more than cost.
Questions
About this calculator
How do I reduce labour cost per visit?
Through throughput rather than pay. Filling the schedule and running rooms efficiently lowers the cost per visit without lowering anyone's pay, and cutting staff usually reduces visits by more than it reduces cost, which makes the ratio worse.
Why does labour cost per visit matter so much?
Because reimbursement per visit is set by payer contracts rather than by the practice, so labour is one of the few genuinely controllable variables. The comparison between the two is what turns a payroll number into an operational decision.
Should providers be in the labour figure?
It is clearer to keep provider compensation separate from support labour, since the two behave differently and are managed differently. What matters more than the choice is consistency, so that comparisons across periods measure the same thing.
The formula
provider cost per hour = compensation x (1 + burden) / (clinical hours x utilisation); labour per visit = cost per hour x minutes in the room / 60
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Please keep the attribution line. It is the only thing we ask in return.
How to use this calculator
- Provider compensation per year ($). Enter your own figure; the page starts at $235,000.
- Provider benefits and burden (%). Enter your own figure; the page starts at 22%.
- Clinical hours per provider per year. Enter your own figure; the page starts at 1,700.
- Clinical support per provider. Enter your own figure; the page starts at 1.5.
- Clinical support salary ($). Enter your own figure; the page starts at $54,000.
- Support benefits and burden (%). Enter your own figure; the page starts at 26%.
The result updates as you type, so you can try a figure, see what it does to clinical labour cost per visit, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Provider compensation per year | $235,000 |
| Provider benefits and burden | 22% |
| Clinical hours per provider per year | 1,700 |
| Clinical support per provider | 1.5 |
| Clinical support salary | $54,000 |
| Support benefits and burden | 26% |
| Scheduled minutes per visit | 20 |
| Provider minutes in the room | 12 |
| Support minutes per visit | 14 |
| Share of clinical hours actually filled | 85% |
| Collected per visit | $128 |
What comes out
| Result | Value |
|---|---|
| Clinical labour cost per visit main result | $56.16 |
| Left after clinical labour | $71.84 |
| Provider cost per clinical hour | $198.41 |
| Provider cost per visit | $39.68 |
| Support cost per visit | $16.48 |
| Clinical labour as a share of collections | 43.9% |
| Visits per provider per day at this length | 20.4 |
| Collection needed to cover clinical labour | $56.16 |
Clinical labour costs $56.16 per visit, $39.68 of provider time and $16.48 of support, which is 43.9% of the 128 collected. That leaves $71.84 toward rent, administration and profit.
How sensitive the answer is
Holding everything else steady and changing only provider compensation per year, this is what happens to clinical labour cost per visit. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Provider compensation per year ($) | Clinical labour cost per visit |
|---|---|
| $117,500 | $36.32 |
| $176,250 | $46.24 |
| $235,000 example above | $56.16 |
| $352,500 | $76.00 |
| $470,000 | $95.84 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Provider compensation per year ($)
- A money amount, between 0 and 5000000, starting at $235,000.
- Provider benefits and burden (%)
- A percentage, between 0 and 80, starting at 22%.
- Clinical hours per provider per year
- A number, between 0 and 4000, starting at 1,700.
- Clinical support per provider
- A number, between 0 and 20, starting at 1.5.
- Clinical support salary ($)
- A money amount, between 0 and 400000, starting at $54,000.
- Support benefits and burden (%)
- A percentage, between 0 and 80, starting at 26%.
- Scheduled minutes per visit
- A number, between 0 and 480, starting at 20.
- Provider minutes in the room
- A number, between 0 and 480, starting at 12.
- Support minutes per visit
- Rooming, vitals, documentation, follow up and callbacks.
- Share of clinical hours actually filled (%)
- A percentage, between 0 and 100, starting at 85%.
- Collected per visit ($)
- A money amount, between 0 and 50000, starting at $128.
What the results tell you
| Result | What it is |
|---|---|
| Clinical labour cost per visit | The headline result. A money figure. |
| Left after clinical labour | A money figure. |
| Provider cost per clinical hour | A money figure. |
| Provider cost per visit | A money figure. |
| Support cost per visit | A money figure. |
| Clinical labour as a share of collections | A percentage. |
| Visits per provider per day at this length | A decimal figure. |
| Collection needed to cover clinical labour | A money figure. |
Keep going
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