Medical Practice Human Resource Budgets

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Seeking Optimal FTE-to-Doctor Ratios


The full-time-equivalent (FTE) – to doctor (provider) – ratio of a medical practice is often more useful to know than the total amount of staff salary expense, according to industry experts like Dr. Jon Hultman MBA, of Los Angeles, CA.  

Why? Because comparable salaries have a wide geographic variance; and it is just more expensive to practice in New York City, than it is in Phenix City, Alabama.  


Payroll (human resources) typically is the largest singe expense and cost-driver of most medical practices. So, an optimal staffing ratio must be determined for every practice, considering quality, productivity and patient satisfaction at the lowest possible cost.

Reducing the FTE ratio, and hence overhead salary expenses, is desirable only when it does not lower productivity, quality or patient satisfaction. 

Most FTE ratios are significantly high, with no corresponding benefit to the typical medical practice (if there even is such an entity).

Moreover, this FTE excess establishes an environment for which “idle-time” for any given point is about 30%. And, corresponding redundant or unnecessary “task-time” is about 25%. 

In fact, it is often a management truism that smaller FTE ratios may be consistent with higher levels of productivity. On the other hand, lower FTE ratios may actually be consistent with lower levels of productivity, lower medical care quality and higher costs; all other things being equal. 

 The NAHC Review

The National Association of Healthcare Consultants (NAHC), Statistical Report 2000, is summarized below and was considered reliable at the time because the numbers were reported by accountants, not doctors. More current information is now available.

Nevertheless, these benchmarks may serve as a cogent starting-point for HR budget analysis and FTE evaluation:

Specialty                                FTE Ratio 

  • Ophthalmology                     5.19
  • OB/GYN                                 4.35
  • Dermatology                         4.30
  • Otolaryngology                     4.22
  • Hematology                          4.19
  • Oncology                               4.19
  • Family Practice                      4.18
  • Orthopedic Surgery               4.12
  • Pediatrics                              3.79
  • Gastroenterology                  3.75
  • Internal Medicine                  3.51
  • Dentistry                               3.00
  • Urology                                 2.94
  • Podiatry                                2.94
  • Neurology                             2.70
  • General Surgery                   2.50


Now, consider the specialty FTE-to-physician ratios listed above – index them over time for your medical specialty – and consider that famed investor Warren Buffett once said,

“There is a right size of staff for any business operation. For every dollar of sales (professional service income), there is an appropriate level of expense.”  

And so, how does your medical practice, clinic or healthcare organization stack-up to current NAHC benchmarks and their resulting HR budgets?


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3 Responses

  1. The measurement of staffing levels and productivity are often quoted in the same analysis. These two factors are inter-related, but their relationship is far from clear. It is interesting that decreased staffing levels may indeed be associated with greater efficiency and greater quality of care. I have often wondered why this is not routinely measured on an individual practice level. Why do we quote “FTEs per provider” rather than “revenue generated per FTE” for a given provider or group?

    The goal of any medical practice should be to use staff appropriately and efficiently. Staff should be expected to spend the majority of their work time performing those functions for which they are specifically trained. If this is accomplished, I think that many medical practices could indeed be more productive with higher levels of staffing.

    The list above shows ophthalmologists with the highest average number of FTEs per provider. In my experience, ophthalmologists may be better than other specialists at delegating those tasks which can be performed by someone other than the physician.

    Brian J. Knabe; MD


  2. Dr. Knabe,

    Your point about “revenue generated per FTE” is an excellent one, and a benchmarking issue I have often wondered about myself. Typically, revenue-per-MD is the meter most watched as it goes directly to doctor salary.



  3. Level of employee dissatisfaction with their workplaces or benefits

    According to an online survey done by Unum;

    • 49% rate their employer as an excellent or very good place to work.
    • 47% were offered benefits by their employer, rated their benefits as excellent or very good.
    • 77% of the above employees also rate their employer as an excellent or very good place to work.
    • 33% who were asked to review benefits education in the prior year rated it as excellent or very good.
    • 17% who consider their benefits package to be fair or poor rate their workplace as excellent or very good.
    • 30% of those who said the employee benefits education they received was fair or poor.

    Source: Unum survey conducted by Harris Poll of 1,521 working adults and a total of 3,031 surveyed participants.


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