Healthcare Provider - Cost of Sales?

COGS is generally related to variable costs, Laboratory Fees, Supplies, Vaccines and Medicines etc... can be found as sub-accounts in COGS, therefore absence of cost of sales sounds unrealistic for medical service producing companies.

Typically practices show zero COGS because they account for physician salaries somewhere in SG&A, so below the gross profit line. In that case sure gross profit would be 100%, but it doesn't tell you anything.. You'd have to look at the financials line items. It's kindof irrelevant because you would subtract OPEX from gross profit to get operating income. Gross profit with no expense baked in doesn't tell you anything. 30% margin on a physician practice is a decent ballpark. Figure $1.1mm per provider for partner physician revenue earned, but can range from $600k to $2.2mm. Lower for a part-time partner physician or new hire, higher for a well-established doc with a larger practice. Most smaller practices, the physicians are partners, negotiate reasonable salaries, and then share in the year end distribution of profits. You can judge physicians by their annual number of procedures. Be cautious of AR in specialty practices subject to litigation, for instance, orthopedics with a component of revenue generated by car accidents. Insurance payments may be contingent on outcome of accident litigation so the AR might look high, but could be drawn out by 9-12 months before a settlement. Beware of Corporate Practice in Medicine laws...Restrictions on how you have to structure the business if you're a non-physician purchasing a healthcare provider.