Physician offices are poised to achieve double-digit net profit margins in 2013, according to a preliminary analysis of privately held companies. Physician offices ranked among the most profitable and general medical and surgical hospitals among the least profitable healthcare-related industries.
Sageworks, a financial information company, conducts a quarterly analysis of financial statements to calculate estimated rates of growth. The company claims it receives approximately 1,000 statements daily from accounting firms and financial institutions, which are aggregated in a proprietary database.
In its Private Company Report, Sageworks projected that privately held doctors’ offices would chalk up net profit margins in 2013 of 12.7 percent, beating the 9.1 percent predicted for all private companies. Privately held general medical and surgical hospitals, on the other hand, posted an estimated net profit margin of 4.7 percent.
Private outpatient care centers and dentist practices also fared well, with projected margins of 14.1 percent and 13.3 percent, respectively. Private continuing care retirement communities and assisted living facilities barely scraped through, at 0.3 percent.
In calculating net profit margins, Sageworks excludes taxes and includes owner compensation that exceeds market-rate salaries.
Raleigh, N.C.-based Sageworks cautioned that its 2013 estimates are preliminary. In November, it revised its projection for private physician offices upward to 13 percent.
“Looking at average ratios for statements ended in the past 12 months, the vital signs for physician offices appear to be very strong,” the company wrote in a data release. “Offices of Physicians (NAICS 6211) have been growing revenue at a steady pace of 5 percent.”
It added that liquidity and cash flow also were strong.