Medical Billing: Costs vs. Benefits of Outsourcing

Outsourcing medical billing and other medical office business is a decision many physicians face.  Medical professionals have invested years, maybe even decades, learning, practicing, and becoming experts in their specialty. As a physician, your role is to provide quality care to your patients while simultaneously running a profitable practice.  Keeping your business running smoothly while serving patients who need your expertise is an ongoing challenge. Physicians attend medical school, not business school (at least most don’t).  Even those who have a mind for both medicine and business can’t do justice to both. The best professionals, whether they are physicians, business people or baseball players, invest time in doing work they love.

If the struggle of “doing it all” sounds familiar to you, it might be time to evaluate options. There are many alternatives ranging from hiring firms that handle most aspects of medical practice management, or just a piece of it such as medical billing services. Here are a few additional things to consider.

1. Recruiting and screening the right candidate for the job. Finding medical office employees with the right skills and the right fit for the culture of your practice requires a financial commitment.  Recruiting medical staff also takes labor hours to accomplish.  Dunn and Bradstreet notes that a report by the Institute for Research on Labor and Employment at UC, Berkley, suggests that management positions often cost 150% of the individual’s salary.

2. Training and retention. Training your medical staff requires a lot of upfront time. So does training to stay current with the changing regulations. Once you’ve hired a new employee, someone will need to train them on your medical office methods and systems. Those methods and systems likely will involve new technology, such as medical billing software, electronic medical records (EMR), changing health insurance rules and medical coding procedures. The effort and cost in retaining quality employees is also substantial.

3. Cost of providing employee benefits. If you hire a full-time medical billing expert, they will be eligible for benefits that may include insurance, vacation pay, holiday pay, and more. Depending on what benefits you offer, this cost can be 30-40 percent of an employee salary.

4. Find sufficient office space. Adding another person to your staff means you need to find a place for them to work. Finding enough room for additional back office employees can be difficult for a small practice.

These are just a few of the reasons that some physicians entrust the business aspects to medical practice management professionals.  If you are weighing options, evaluate the costs and benefits using a medical billing calculator. Or simply give us a call or send an email to and we’ll run the numbers for you and generate a no cost, no obligation report for you to evaluate.

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