How profitable is it to hire an NP

Sheri FNP-C · Jun 24, 2009

Here are a couple links that I had bookmarked. They may be of some assistance to you.

http://medicaleconomics.modernmedicine.com/memag/article/articleDetail.jsp?id=127171

http://www.healthyinfo.com/tips/legal/newlyhirednp.profit.shtml

core0 · Jun 25, 2009

Hello,
I am trying to find out a general or average range of revenue a NP would bring into a Family practice? a specialty practice like GI, cardio, or nephrology? I realize the answers will be general range, and of course we have to account for support staff, overhead, I collections, etc....
I am happy to do the work to find out, but I am not even sure where to look.
Any ideas?
Thanks for your help, it is much appreciated!
Kim

The issue is that the way the revenue is generated is different depending on the specialty.

FP is pretty straightforward. The NP is another provider. Revenue is based on collections, salary and overhead. If the NP is used to staff walkins then there are going to be inefficencies. On the other hand the NP can expand hours and bring in revenue that otherwise would be lost to urgent care or ERs which is an intangible that is hard to measure.

Outside of primary care there are a few other models. For non-procedure based specialties the model is similar to FP in that the income comes from seeing more patients. There are some iffecencies here for example an NP working in nephrology could see PTs in dialysis centers where the overhead is provided by the dialysis center. There is also better reimbursement for essentially the same work. Overall the revenue is collections - salary + overhead.

Procedure based specialties have a different model. The model is primarily based on shifting the physician to doing more procedures and less patient management. Cardiology and GI are the best examples of this. Here the NPPs can do initial consults which are very lucrative. They also can manage chronic long term patient freeing up the physicians to do consults. Finally by having the NPP do more patient management it frees up the physician to do more procedures. I did a study for the Canadian Gastroenterology Association that showed you could substantially reduce wait times (almost eliminate them) by adding roughly one PA for every two gastroenterologist. In my previsous practice adding PAs increased the revenue from colonoscopy by more than 40% in addition to the collections from the PAs patient management.

The last model is used in surgery. In this model the collections are usually from first assist fees. However, the AAPA has a study of an orthopedics that showed the PA revenue was split roughly three ways. 1/3 first assist fees, one third in office procedures and visits, and one third increased production of the physician by allowing the surgeon to do more procedures while the PA covered post op visits (which are not reimbursed). In areas such as CV surgery the revenue from first assist fees and vein harvesting is very substantial with very little procedure shifting necessary.

The other issue is that time off has value to the physicians. The use of an NPP may not bring in additional revenue but might allow the physician to work less. This has value to the physicians and should be considered part of the "profit". In my previous practice we worked one weekend in 4 (with appropriate days off). The physicians worked one in eight. Without the PAs the physicians would either be finishing the workday well after 10pm or need to work one in four. So the value to practice was substantial to them.

Hope this helps.

David Carpenter, PA-C

Trauma Columnist · Jun 25, 2009

I work in nephrology, specifically dialysis. Medicare reimburses nephrology practices for caring for dialysis patients. Per the Medicare guidelines, a dialysis pt should be visited at least once per month by an MD and can have up to three other visits by a mid-level provider (we have FNPs, PAs and me, CNS). The reimbursement is (these amts are approximates):

$185 for the first visit of the month (can be done by mid-level or MD)

$100 for the second visit of the month (mid-level)

$0 for the third visit of the month (mid-level)

$100 for the fourth visit (mid-level)

So...yes, the mid-levels in dialysis units do generate income - making our jobs fairly secure.

MissDoodaw · Jun 25, 2009

Thank you all for your well considered answers.

This is definitely helpful.