Can you afford a second provider? Run the panel math first

You can afford a second provider when you have the cash to carry their cost until their panel pays for them, and you know roughly how long that will take.

Start with what the provider costs you each month

Add up everything. Salary, benefits, malpractice coverage, payroll costs, licensing, a laptop, added software seats and extra supplies. If you'll need more space, put the rent increase in too. That total is the fully loaded monthly cost, and it's the number the new panel has to cover.

Count the time before they see anyone, too. Getting licensed in your state, onboarding and training can mean a month or more of full cost with no new members. If that applies to you, add those months on top of the ramp numbers below.

Whether they're an employee or a contractor, and how that's taxed, is a question for your CPA and attorney. For the cash math, use the total you'll pay out each month.

Find the break-even panel

Divide the monthly cost by your average revenue per member. That's how many members the new provider needs before they cover themselves.

Example, made-up numbers: say the provider costs $15,000 a month all in and your average member pays $75. $15,000 divided by $75 is 200 members. Until their panel reaches 200, the practice pays the difference out of cash. You can run your own numbers in the panel break-even calculator.

Use your real revenue per member from your books, not your list price. Family plans, employer rates and comped members pull the average down, and the break-even panel goes up with it.

Ramp time is where the cash goes

A new provider starts with an empty or small panel. Some of your members may move over to them. That frees up your schedule, but it doesn't add revenue. Only new members add revenue.

Keep going with the example. Say the new provider adds 25 new members a month. In month one they bring in $1,875 against a $15,000 cost, so the gap is $13,125. The gap shrinks each month and closes in month eight, when they reach 200 members. Add up the monthly gaps and you need $52,500 in cash to get there.

Now test a slower ramp, because that's the one that hurts. At 15 new members a month, they don't pass 200 until month 14. Add up those gaps and the cash you need is $92,625. Same provider, same cost, about $40,000 more.

Check your runway before you make an offer

Compare the slow-ramp number to the cash you have after your own reserve. If paying for the ramp would drain your cushion, you're not ready yet. A part-time provider who grows into full time is one way to shrink the gap. The cash runway calculator will show you how many months your cash covers.

Here's what I'd have on one page before deciding:

• Fully loaded monthly cost of the new provider
• Your average revenue per member from the last three months
• The break-even panel for the new provider
• A realistic ramp and a slow ramp, each with total cash needed
• Cash in the bank after your reserve
• Signs of demand, like a waitlist or a full schedule

If the slow ramp still fits inside your cash with room to spare, the hire looks affordable. If only the fast ramp fits, wait or build more cash first. It's your call, and that's how I'd look at it.

Common questions

How do I know there's enough demand for a second provider?
Look for signs you already have, like a waitlist, a full schedule, or people you've turned away. If you aren't turning anyone away yet, plan on the slow ramp.

Should I count members who move from my panel to theirs?
Count them for workload, not revenue. Moving a member between providers doesn't change what the practice collects.

Can a part-time hire lower the risk?
Often, yes. A lower monthly cost means a smaller break-even panel and less cash at risk while the panel builds.