I’m going to give you a number that might ruin your day: 24%.
That’s roughly what your non-doctor payroll should be as a percentage of total revenue. Industry benchmarks. Not my opinion—actual data from thousands of practices.
Now pull up your own numbers. What’s your percentage?
If you just winced, keep reading. Because you’re probably not alone, and there’s a path out of this.
Where The Money Actually Goes
Most practice owners I talk to know they’re spending too much on admin. They just don’t know where exactly. It feels like a blob of overhead that’s impossible to untangle.
Let me untangle it.
Staffing bloat happens gradually. You hired someone for insurance billing because it got overwhelming. Then you needed another person to handle phones because the first person was too busy billing. Then you brought on a part-timer to help with recalls because nobody had time for outbound calls.
Each hire made sense in isolation. Together, they create a payroll that’s eating your margins.
Underutilization is the hidden killer. That person you hired for billing—are they billing eight hours a day? Or are they billing for three hours and filling time with tasks that don’t really need doing? Most practices have significant slack in their staffing. Not because employees are lazy, but because workflows are designed inefficiently.
Cost of goods creeps up too. Are you getting the best prices on frames? Contact lenses? When’s the last time you actually negotiated with your vendors? Many practices are overpaying simply because they’ve always used the same suppliers.
Here’s the rule of thumb: your combined cost of labor and goods should stay below 60% of revenue. Labor alone shouldn’t exceed about 35-40% when you include doctors. If you’re north of those numbers, something’s off.
The 60/40 Reality Check
Pull your P&L. Do the math. Seriously, do it now.
Take your total labor cost (all salaries, benefits, payroll taxes—everyone). Add your cost of goods (frames, lenses, contacts, supplies). Divide by total revenue.
What did you get?
If you’re under 60%, nice work. You’re running a tight ship.
If you’re between 60-70%, you’ve got some fat to trim but you’re not in crisis.
If you’re over 70%, we need to talk. You’re working way too hard for margins that thin.
Three Levers You Can Actually Pull
Assuming you want to fix this, you’ve got three main options. Most practices need some combination of all three.
1. Right-size your team
This doesn’t necessarily mean firing people. It might mean not replacing someone when they leave. It might mean cross-training so people can flex between roles. It might mean shifting hours based on actual demand instead of “this is how we’ve always scheduled.”
Ask yourself:
- Are there times during the day when staff are clearly idle?
- Are there tasks that take way longer than they should?
- Could two people do what three people are doing if workflows were better?
Sometimes the answer is yes. Sometimes it’s not. But you won’t know until you actually look.
2. Negotiate harder on supplies
Join a buying group if you haven’t already. Seriously. The discounts are real. We’re talking 10-30% on frames and lenses depending on volume.
Review your vendor contracts annually. Get competitive quotes. Most suppliers will match pricing if they think you’re actually willing to switch.
And track your ordering. Are you over-ordering certain products that sit in inventory? Are you under-ordering popular items and missing sales? Your EHR probably has reports for this. Use them.
3. Outsource what doesn’t need to be done on-site
This is the big one. And it’s where most practices have the largest opportunity through front desk outsourcing and medical virtual assistants.
Think about everything your staff does. Now ask: does this task physically need to happen in my office?
Answering phones? No. Scheduling appointments? No. Insurance verification? No. Patient recalls? No. Billing follow-ups? No. Chart prep? No.
The list goes on. A huge percentage of administrative work can be done remotely. And when you outsource to the right partner, you’re typically paying 40-60% less than equivalent in-house labor.
How Global Staffing Actually Works
Let me be specific, because “outsourcing” is a loaded word.
I’m not talking about sending work overseas and hoping for the best. I’m talking about bringing trained remote workers into your team. They use your systems. They follow your protocols. They’re on your schedule. The only difference is they’re not physically sitting in your office.
At Classic Vision Care—the practice my wife and I own—we’ve used remote staff for years. They handle our inbound calls, schedule appointments, verify insurance, and follow up on recalls. They’re trained specifically on our systems (we use RevolutionEHR) and they know our patients. This is what sets us apart from competitors like Hello Rache.
From the patient’s perspective, they’re just talking to someone at our practice. Because they are.
The result? We cut our non-doctor payroll by 30%. And our revenue went up 33% because we weren’t dropping balls on recalls and follow-ups anymore.
Those aren’t typos. Costs down 30%, revenue up 33%. That’s what happens when you stop paying premium prices for tasks that don’t require premium resources.
What’s Actually Worth Outsourcing
Not everything should be outsourced. I’d never outsource clinical support roles—techs and opticians need to be there with the patient. And I’d always keep some in-office admin capacity for situations that require a physical presence.
But these tasks? These can absolutely be handled remotely:
Phone calls and scheduling. This is the big one. Missed calls are a massive revenue leak—and even answered calls are expensive if you’re paying an in-office person $18-22/hour to do what a trained remote worker does for less.
Insurance verification. Tedious, time-consuming, and doesn’t require physical presence. Perfect for outsourcing.
Patient recalls and reactivation. These outbound campaigns are where most practices drop the ball. A dedicated remote team can run recalls consistently, turning dormant patients into appointments.
Billing follow-ups. Chasing insurance payments and patient balances. Again, tedious but necessary, and doesn’t need to happen on-site.
After-hours coverage. Instead of paying on-call premiums to your staff, have a remote team handle evening and weekend calls.
The Numbers That Matter
Once you start making changes, track these:
- Calls answered vs. calls missed
- Appointment conversion rate (calls that turn into bookings)
- Insurance verification completion rate
- Patient recall success rate
- Payroll as a percentage of revenue
If those metrics are improving while payroll percentage is dropping, you’re doing it right.
Stop Overpaying For Admin Work
Look, I get it. Changing how you staff your practice is scary. You’ve got relationships with your team. You’re worried about quality. You’re not sure where to start.
But the math doesn’t lie. If your admin costs are eating your margins, you can’t fix it by working harder or seeing more patients. You have to fix the structural problem.
Outsourcing isn’t about cutting corners. It’s about putting the right resources on the right tasks. Your skilled in-office staff should be doing work that requires their physical presence and expertise. Everything else? That can be done better and cheaper by people whose whole job is doing it well.
If you’re curious what this might look like for your practice, let’s talk. I’ll walk you through exactly how we’d handle your workflows and what the numbers might look like.
Need help managing your practice’s calls and scheduling? Book a discovery call to learn how MyBCAT can help.
