What are considered variable expenses in a medical practice?

Variable expenses in a medical practice are those that fluctuate in direct relation to the number of patients seen. This means that as the volume of patients increases, these expenses will also rise, and conversely, if the patient count decreases, these costs will drop accordingly. Examples of variable expenses include costs related to consumable medical supplies, hourly wages for staff employed on a per-shift basis, and other costs directly tied to patient services.

Understanding this concept is essential for managing the financial health of a practice. Variable expenses contrast with fixed costs, which remain constant regardless of patient volume, such as rent or salaries of permanent staff. By identifying and managing these variable expenses, a medical practice can better align its budget with expected revenues, particularly in situations where patient volume may fluctuate.