The Completed Cost Worksheet For A Diabetes Management Clinic: Cost Worksheet Table 1. Staffing and Salaries
The Completed Cost Worksheet For A Diabetes Management Clinic:
Cost Worksheet
Table 1. Staffing and Salaries
Complete Table 1 by adding the staff positions including physician specialty, nurses and support staff, and the number of positions in your clinic. Multiply the number of positions by the average salary for those positions to obtain total salaries.
| Staff Position | Number of Positions | Average Salary | Total Salaries |
| Primary Care Physician | 2 | $200,000 | $400,000 |
| Nurse | 2 | $100,000 | $200,000 |
| Support Staff | 2 | $50,000 | $100,000 |
Total Salary: $700,000
Table 2. Fringe Benefits Expense and Total Salary Expense
These expenses have been established by the hospital system at 25% of salaries and added to salaries for Total Salary Expense.
| Cost Factors | Dollar Amount |
| Total Salaries | $700,000 |
| Fringe Benefit Expense 25% of Salaries | $175,000 |
Total Salary Expense w/ Fringe Benefits: $875,000
Table 3. Overhead (Indirect) Costs and Total Fixed Practice Costs
Begin with total salaries including fringe benefits. Multiply that amount by 40% (0.40) and combine the 2 numbers for total fixed practice costs. These costs do not vary based on the number of patients.
| Cost Factors | Dollar Amount |
| Total Salary Expense w/ Fringe Benefits | $875,000 |
| Overhead Costs 40% of Total Salary Expense | $350,000 |
Total Overhead and Fixed Costs: $1,225,000
Table 4. Equipment Costs
These items will be used by the clinic for 5 years so the costs will be divided equally over 5 years (depreciation).
| Cost Factors | Dollar Amount |
| Total Equipment Cost | $100,000 |
| Depreciated Equipment Cost (cost for year one) | $20,000 |
Total Clinic Costs (for year one including salaries, overhead, and equipment costs): $1,205,000
Table 5. RVU and Reimbursement Calculation
The cost of physician care varies in different locations, as do the cost of operating a practice and the rates of physician malpractice claims. In addition, each year Medicare adjusts the conversion rate either up or down.
| Category | RVU | GCI | Total RVU |
| Work RVU | 1.5 | 1.12 | 1.68 |
| Practice Expense RVU | 0.5 | 1.12 | 0.56 |
| Malpractice RVU | 0.25 | 1.12 | 0.28 |
| TOTALS | 2.25 | 3.36 | 2.52 |
Totals:
RVU:2.25
GCI:3.36
Total RVU:2.52
Table 6. Variable Costs and Net Reimbursement
To complete Table 5, multiply reimbursement per visit by 10% (0.10) and subtract this number from reimbursement to obtain net reimbursement per patient.
| Cost Factors | Dollar Amount |
| Reimbursement per visit | $100 |
| Variable cost per patient 10% | $10 |
Net Reimbursement per patient: $90
Table 7. Breakeven Analysis
To calculate the number of patients needed to break even, divide total practice costs by net reimbursement. To calculate the number of pat