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Financial operations

Medical practice overhead: what's normal, what's not

Independent primary care practices run 55%–65% overhead (excluding provider compensation). Procedural specialties run 40%–55%. If you're above the top of the range for your specialty, the top three fixable levers are almost always staffing efficiency, billing cost, and space efficiency.

By Jordan Alderman, MBA, CMPE · Reviewed by Rania Hassan, JD, CHC · Last reviewed · Methodology

Disclosure: Independent editorial. No pay-for-placement, no affiliate rankings. Full editorial standards.

This guide unpacks what typical practice overhead looks like, benchmarks by specialty, and how to identify which lever moves the needle for your practice.

The MGMA-style overhead breakdown

  • Staff (non-provider): 25%–35% of collections
  • Occupancy (rent, utilities, maintenance): 6%–10%
  • Supplies (medical + office): 3%–8% (higher in procedural specialties)
  • Insurance (malpractice + general): 3%–6%
  • Billing / RCM: 4%–8%
  • Technology (EHR, PM, IT): 3%–6%
  • Marketing: 1%–4%
  • Other (professional fees, CME, misc): 3%–5%

Benchmarks by specialty

  • Family medicine / internal medicine: 60%–68%
  • Pediatrics: 58%–66%
  • OB/GYN: 55%–62%
  • Dermatology: 45%–55%
  • Ophthalmology: 45%–55%
  • Orthopedics: 45%–52%
  • Cardiology: 48%–58%
  • Behavioral health: 35%–48%

The three biggest fixable levers

Staffing efficiency: benchmark support staff FTEs per provider against MGMA — 3.5–4.5 for primary care is typical. Above 5 is a red flag.

Billing cost: 4%–8% of collections is normal. Above 10% needs a hard look at outsourcing vs in-house.

Space efficiency: 500–800 sf per provider is efficient primary care. Above 1,000 sf is expensive unless procedural.