Pediatric Informatics: Computer Applications in Child Health (Health ...

210 D.E. Lighter
Table 15.1a Pediatric practice abbreviated profit and loss statement
before automation
Income Expenses
Provider services – outpatient $ 1,100,000.00
Provider services – inpatient $ 385,000.00
Office laboratory services $ 480,000.00
Total revenues $ 1,965,000.00
Salaries – providers $ 550,000.00
Salaries – nurses $ 105,000.00
Salaries – medical assistants $ 36,000.00
Salaries – receptionists $ 30,000.00
Salaries – transcriptionists $ 37,500.00
Salaries (subtotal) $ 758,500.00
Benefits $ 242,720.00
Overhead charges $ 884,250.00
Medical malpractice $ 81,000.00
Total expenses $ 1,966,470.00
Net Income $ (1,470.00)
Table 15.1b Assumptions for the pro forma
Item Cost
Provider salaries $140,000 per year
Nurse practitioner salaries $65,000 per year
Nurse salaries $35,000 per year
Medical assistant salaries $18,000 per year
Receptionist salaries $15,000 per year
Transcriptionist salary (1.5 FTE) $25,000 per year
Benefit costs 32% of salaries
Medical malpractice – MDs $19,000 per year
Medical malpractice – NPs $12,000 per year
Overhead charges 45% of gross revenue
Auto checking of notes for spelling and grammar errors using a medical
dictionary
Billing recommendations based on the structured note entered by the clinician
Compliant with malpractice insurer’s requirements for a 10% premium credit
The medical record system costs $175,000, which the practice pays by taking
$35,000 from financial reserves and finances the remaining $140,000 at 5.5% interest
for 48 months. The assumptions made for the calculations take into account the
expected decline in productivity during the first year after implementation, as well
as a number of other practice costs related to the new system:
The time spent by the nurses and medical assistants in managing the paper chart
are consumed with other duties, such as increasing reimbursable lab volumes
done in the office by 10%.