What It Really Costs to Keep a Neighborhood Pediatric Clinic Open

Although a child’s checkup can last only 20 minutes, a lot of work goes into preparing for that visit. Someone schedules the appointment, verifies the child’s insurance, prepares the exam room, and enters information into the child’s medical record. After the visit, the office can also handle billing and follow-up work.

A busy appointment schedule might make a pediatric clinic appear financially successful, but patient volume doesn’t tell the whole story. Whether owned by one doctor or several, pediatric practices depend on staff, equipment, and systems that generate ongoing expenses.

What Does a Pediatric Clinic Spend Money On?

On an ongoing basis, pediatric clinics need staff, systems, and tools to serve children and families. Although a practice may block time for appointments, each visit to a privately owned pediatric practice includes billing and follow-up after a family leaves the office.

One of a practice’s highest ongoing costs is its staff. A practice hires pediatricians, nurses, medical assistants, front desk workers, billers, and others. No matter how often doctors see patients, the practice must pay their salaries, plus taxes and perks.

In addition to the revenue a practice expects to receive for services rendered, it needs accurate records of what it spends on staff, medical supplies, and daily operations. An independent pediatric clinic may use healthcare accounting services to track these expenses alongside payments received from insurers. This helps the clinic determine whether income covers operating costs and whether it has enough cash to pay bills on time.

Beyond the vaccine cost, the practice must pay to keep them safe once it receives them.  Typically, the practice pays for temperature monitoring and administration, as well as staff time to give the vaccines. Under the federal Vaccines for Children program, eligible children receive vaccines at no charge through participating practices. However, the practice still incurs costs for storage, temperature monitoring, administration, and staff time. According to the American Academy of Pediatrics, practices must cover these expenses through administration fees or other payment arrangements.

Some long-term expenditures are worth it because they last longer than an appointment. Examples include exam tables, scales, and refrigerators. Some of these will require repair or even replacement from time to time.

Why More Patients Don’t Always Mean More Money

A busy clinic doesn’t necessarily have enough cash on hand to cover current expenses. Even if a pediatric practice sees a high volume of patients, it may not receive payment for covered services in a timely manner. In addition to billing and following up with families, the office must collect copays and deductibles.

For example, a practice could have a very busy week of exams and immunizations and see many sick visits. The office may have just ordered a supply that was just received, and the staff (nurses and front office) are due to be paid in a few days. Unfortunately, the insurance company may not reimburse some claims for services rendered during that very busy week. Even though the pediatrician and staff provided care and treated the children’s illnesses, the practice cannot count on those unpaid balances to pay its current expenses.

Cash flow differs from a practice’s revenue. Although a practice may record a service in anticipation of payment, the practice typically does not have access to that money until later. Looking at a practice’s performance only by patient volume does not provide a complete picture of its financial situation.

While it is often difficult to predict when a child will fall ill and require same-day pediatric care, the clinic can count on a flood of school physicals in the late summer. Although increasing staff during these periods could provide better care, the cost of higher pay for only a short time may not be offset by the increase in patient volume.

How Financial Decisions Affect Patient Care

Patient input rarely shapes decisions about keeping hours for working parents, replacing 20-year-old equipment, or adding staff to a pediatric office. Each of these decisions costs money, and a single doctor’s office must decide how to spend it in its patients’ best interests.

Sometimes parents call to request a same-day appointment for a child who has come down with a sudden illness, such as a fever. The office needs schedule flexibility to accommodate these situations. In many cases, the office adds these appointments to the end of the doctor’s schedule for routine care.

Preparing a pediatric practice for unknown costs does not necessarily mean cutting back on patient services. A pediatric practice can review overdue insurance payments, set aside money for major expenses such as equipment failures, and evaluate how staffing changes will affect operating costs.

When a family brings their children to a pediatric office for medical care, they expect doctors and staff who know them. To make that possible, a pediatric practice needs sufficient financial resources to pay its staff, replace worn-out equipment, and remain available for future appointments.