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Patient Payments Blog

Retirement Math For Doctors

Posted by Jim Turner

Apr 26, 2018 8:37:00 AM

Doctors spend a decade (some more, some less) learning to be doctors. They may spend another decade (or more) paying off the loans they took out to learn to become doctors. The investment they make to become doctors is in truth, a life investment. For most, everything in their life revolves around patients and how better to treat them. In return, they often treat patients who will never pay them for their work. That’s tragic, and avoidable.

The fact that non-payment is avoidable has been the subject of this blog for more than three years now. For those who have put tools and policies in place to avoid past-due and non-paying patients, we salute you. For those who haven’t been able to convince your doctors to make a change – we encourage you to share this link with them. A little motivation goes a long way to accelerating improvements. Take a look at the numbers below.

 Retirement Math for Doctors

These are the best ‘average’ numbers we could discover from the sources out there. The best thing for you to do is to consider your own numbers. Find out how much you send to collections annually and how much you write off annually. Your collection agency will know what your recovery rate is. By the way, they should be sharing that will you or you should be doing the calculations! Then take your numbers and enter them into the calculator here at NerdWallet. Much like I did in the illustration below. (One thing to note – 8% is a low figure for annual earnings. The earnings for the S&P 500 is 10% on average.)

 Retirement Math

Now, take these numbers to your doctor or doctors. Even if you think you could only reduce the collection percentage by 5% and the write-off percentage by 2%, it will still mean millions in earnings over the course of the doctors’ career. It would be hard to imagine a doctor not being motivated by numbers in the millions. If you can’t get your doctor motivated, try showing the numbers to his or her spouse! (Just kidding, a little)

The bottom line is, literally, the bottom line. More money collected means more for the doctor’s retirement, or salary increases for the staff, or improvements for the practice, or a thousand other things the doctor could choose to invest in. It’s time to make improvements, maybe a million dollars or more will be enough motivation to start.

Topics: Patient Payment Policies, practice management, Lost Revenue, physician vacation, Doctor Retirement, Physician Retirement

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