Benchmarking Practice Overhead 

Every profitable healthcare practice maintains a close watch on overhead. Start by calculating your overall overhead ratio to understand how much of your revenue is consumed by operational costs. Separate fixed and variable costs to better predict cash flow and identify potential efficiencies. Reviewing overhead at both the practice and department level helps align spending with your organization’s financial and patient care goals. 

Analyzing Cost Drivers 

Evaluate your largest expense categories regularly to ensure they reflect your practice’s strategic priorities. For example, staff costs, supplies, and occupancy expenses often account for the majority of overhead. Establish a breakeven point to determine how many patients or procedures are needed to cover costs. This clarity helps leaders make informed decisions about pricing, staffing, and service mix. 

Vendor Evaluation and Selection 

Vendor relationships play a major role in cost control and service quality. Conduct price comparisons and competitive bidding to confirm that you are receiving fair market value. Review contract terms and flexibility, weigh quality versus cost trade-offs, and track vendor performance over time. Consider opportunities for volume discounts, consolidation, or selectively bringing services in-house to achieve greater control and savings. 

Maintaining a Financial Check-Up Routine 

Just as patients benefit from regular check-ups, so do healthcare practices. Build an annual process for reviewing overhead and vendor contracts. Continuous monitoring helps protect your profitability as costs and market conditions evolve. YHB’s healthcare advisors can assist your team in benchmarking results, identifying cost-saving measures, and maintaining accountability for financial performance.