Medical Billing Profit Margins
- This is a call to all owners/executives of medical billing companies.
I currently own and operate my own medical billing company. We are a
small company. (We have less than 10 employees.) My question is this:
What kind of profit margins should we be shooting for? As a rule of
thumb, having worked in other service-sector industries, we shoot for
each employee to generate 3x the revenue of his or her income. I've
been told by peers in the accounting industry that they shoot for
50% - 70% profit margins. I think this is rather high for medical
billing, but again, all I have is my own experience to go by.
So what do other medical billing companies consider to be a good
profit margin? Also, any other "rules of thumb" anyone can provide
would be greatly appreciated. (For example, what percentage of
revenues should be spent/allocated to marketing? sales? labor? fixed
expenses? variable expenses? postage? etc...)
Any help would be greatly appreciated. I am not looking for
confidential financial information, only approximate percentages and
Jonty Yamisha, CEO
Medical Partners Group, Inc.
PO Box 8088, Haledon, NJ 07538
(t) 973-238-1390 (f) 973-238-1391