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Is Outsourcing Affordable?

is outsourcing affordable

Of all the years I have encountered decision makers at Medical Practices, one important question always comes up: How much do you charge? When I share with them our rates, it is usually greeted with:

“Oh that’s too much” or “I don’t think we could afford that”

My only rebuttal is that we are at the industry average but we carry a higher level of quality to the table. I share one or two of our numerous success stories with clients that we partner with and increased their collections by great numbers, as a good medical billing sales rep should, but I have always had in the back of my mind “Are we too much?” and “Are we affordable?”

So I did some research.

I found some answers.

According to Glassdoor.sg as of Feb 10, 2024, the average salary for a medical biller in St. Louis, MO (which is the major city located near us) is $45594 per year and according to Payscale.com the average industry hourly rate for an in-house medical biller is $19/hr ($15-$25) as of April 10,2024 with 21,672 individuals reporting.

With the fact that many offices are struggling to not only find adequate staff to have billing done inhouse, I knew to gauge my findings a little higher than the average. So here is how I broke it down using Payscale.coms numbers (plus $1/hr):

To calculate the average total payroll cost to hire an in-office medical insurance biller for a medical practice in Missouri at a rate of $20 per hour, we’ll consider the various components involved. Let’s break it down:

  1. Hourly Wage: $20 per hour.
  2. Annual Salary: Assuming a full-time position with 40 hours per week and 52 weeks per year, the annual salary would be: $20/hour * 40 hours/week * 52 weeks/year = $41,600.
  3. Benefits: Benefits can vary, but let’s estimate them at around 30% of the annual salary: 30% * $41,600 = $12,480.
  4. Taxes: Employer-paid taxes typically amount to around 15% to 20% of the employee’s salary. Let’s use 17.5% for this calculation: 17.5% * $41,600 = $7,270.
  5. Recruitment and Onboarding Expenses: These expenses can vary widely, but let’s estimate them at around $1,000 for this calculation.

Adding these components together:

  • Annual Salary: $41,600
  • Benefits: $12,480
  • Taxes: $7,270
  • Recruitment and Onboarding Expenses: $1,000

Total Payroll Cost = Annual Salary + Benefits + Taxes + Recruitment/Onboarding Expenses Total Payroll Cost = $41,600 + $12,480 + $7,270 + $1,000 Total Payroll Cost = $62,350

So, the average total payroll cost to hire an in-office medical insurance biller for a medical practice in Missouri at a rate of $20 per hour would be approximately $62,350 per year. Keep in mind that these are estimates and actual costs may vary based on specific circumstances and factors.

 

So if payroll is @ $20/hr. the yearly would be $62,350 averaging $5,200 in costs per month

                          @ $25/hr. the yearly would be $77,700 averaging $6,475 in costs per month

 

The Industry average charge for Insurance Billing is 6% so if monthly collections are:

$25,000 per month, 6% would be $1500/month

$35,000 per month, 6% would be $2100/month

$40,000 per month, 6% would be $2400/month

$50,000 per month, 6% would be $3000/month

$85,000 per month, 6% would be $5100/month

$100,000 per month, 6% would be $6000/month

 

These numbers aren’t even considering costly factors that have a direct effect on a practices costs like  possible internal staff issues, which can create employee turn-overs within practices, and trust in the staff that they are working diligently to keep reimbursement collections maximized. When you try to add these into the original question, one can easily yes to the affordability question. If you would like more information on how we can bring trusted, qualified and affordable billing to your practice, call us at 1-800-596-5387 or call me, Allen Billings directly at 618-719-1140 to find confidence in saying “YES” to affordability.

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