Provider & Capacity Economics

“Providers are busy, but you cannot tell which ones earn a return.”

Revenue per provider tells you who produces. It does not tell you who contributes. These articles separate production from profit and look at compensation, utilization, and when another hire actually pays for itself.

Common root causes

Compensation plans that reward revenue rather than contribution
Paid provider hours that go unbooked
Hiring ahead of demand, or before existing capacity is used
Service mix that looks productive but carries thin margins

Metrics that expose it

Provider compensation as % of that provider's revenue: One provider's total compensation (base, commission, bonuses, employer payroll taxes) ÷ Net service revenue produced by that provider (after discounts and refunds; excludes retail)
Provider labor as % of total service revenue: Compensation of all revenue-producing clinical providers, plus employer payroll taxes ÷ Total net service revenue (excludes retail)
Provider utilization: Hours providers spend in booked, completed treatment time ÷ Hours providers are paid to be available for treatment
Revenue per compensated provider hour: Net service revenue produced by a provider ÷ Hours that provider was compensated for (including unbooked time)
Contribution margin per appointment: Average net revenue per appointment minus average variable cost per appointment