Administrative cost averages $29.30 for every hour a physician spends with patients, according to the American Medical Association's 2024 Physician Practice Information Survey. That is 21.9% of the $133.61 total practice expense per patient care hour, and 32.2% of the $91.04 indirect portion.
The average hides a wide range. Psychiatry reports $14.05 per hour and ophthalmology reports $77.30, a gap of 5.5 times.
What the AMA counted as administrative cost
The AMA's Table 1 reports practice expense per hour of direct patient care. The table covers 831 practices and departments that together represent 18,086 physicians across 18 broad specialty groups. Direct patient care hours average 1,936 per physician per year.
The AMA splits indirect expense into four lines: administrative, overhead, information technology and other. Administrative is the line for billing, front desk and management labor. Total indirect cost is $91.04 per hour, and administrative cost is the second largest piece of it. The "other" line is larger at $30.91.
The table gives each figure per hour of care, not per hour worked. A practice with many administrative hours but few patient hours shows a higher number.
Administrative cost by specialty
The table below lists seven specialty groups and the all-specialty average. Each row shows the AMA's hourly figure and two shares worked out from it.
Twelve of the 18 specialty groups report administrative cost above the $29.30 average. Ophthalmology leads at $77.30 per hour. Hematology/oncology follows at $53.82, then dermatology at $44.23 and orthopaedic surgery at $41.59. Office-based proceduralists report $40.14, otolaryngology $37.88, obstetrics/gynecology $33.84 and gastroenterology $32.56. Vascular surgery sits just above the line at $30.14.
| Specialty group | Administrative cost per hour | Share of indirect cost | Share of total practice expense | Total practice expense per hour |
|---|---|---|---|---|
| Ophthalmology | $77.30 | 38.6% | 26.0% | $297.19 |
| Hematology/Oncology | $53.82 | 40.7% | 22.2% | $242.00 |
| Dermatology | $44.23 | 30.2% | 17.7% | $250.46 |
| Orthopaedic Surgery | $41.59 | 36.6% | 26.8% | $155.15 |
| Cardiology | $40.02 | 30.3% | 19.1% | $209.55 |
| Radiology | $37.29 | 31.6% | 21.1% | $176.91 |
| Primary Care | $31.32 | 32.2% | 21.5% | $145.70 |
| Psychiatry | $14.05 | 48.7% | 36.9% | $38.10 |
| All specialties | $29.30 | 32.2% | 21.9% | $133.61 |
Source: American Medical Association, Table 1, Results from the 2024 Physician Practice Information Survey (831 practices and departments, 18,086 physicians). Shares are calculated from the AMA's dollar figures.
Psychiatry shows the highest administrative share of its own cost, 36.9% of total expense, because its other costs are small. Its $14.05 is the lowest in the table above. Orthopaedic surgery follows at 26.8% and ophthalmology at 26.0%.
Three groups sit below the average on administrative cost without being outliers: pulmonary disease at $28.52, office-based medicine at $28.72 and pathology at $18.24. Hospital-based medicine reports $10.72, the lowest of all 18 groups.
Administrative cost next to overhead and technology
Across all specialties, overhead is $24.29 per hour, information technology is $6.55 and other indirect cost is $30.91. Administrative cost is 4.5 times the information technology line.
Technology is a small line everywhere. It reaches 4.9% of total practice expense for the all-specialty average. Among the groups in the table above, the hourly figure runs from $2.03 in psychiatry to $14.07 in ophthalmology.
Ophthalmology pairs the highest administrative cost with the highest overhead, $73.59 per hour. Pulmonary disease shows an uneven mix. Its overhead of $46.28 is 1.6 times its administrative cost of $28.52.
Nurse practitioners and physician assistants
Nurse practitioner and physician assistant costs sit in separate rows of the same table. The AMA also collected cost data for nurse practitioners and physician assistants. Nurse practitioners report $15.75 of administrative cost per hour across 2,774 clinicians, and physician assistants report $10.42 across 2,184. Their direct patient care averages 1,509 and 1,583 hours a year.
Indirect cost per hour is $41.94 for nurse practitioners and $49.59 for physician assistants, against $91.04 for physicians. Administrative cost is 37.6% of nurse practitioner indirect cost and 21.0% of physician assistant indirect cost. Physician assistants carry $29.88 of overhead per hour, more than their administrative figure.
The AMA noted that about 10% of responding practices supplied these data, and most could not assign costs directly to these clinicians. Read the numbers as less certain than the physician figures.
Administrative cost compared with clinical labor
Clinical labor is the largest direct cost line, at $33.02 per hour for all specialties. Administrative cost is $29.30, so the two are within $3.72 of each other on average.
The gap differs by specialty. Primary care reports $38.85 of clinical labor against $31.32 of administrative cost. Dermatology reports $80.52 against $44.23, and hematology/oncology reports $92.73 against $53.82.
Two groups spend more on administration than on clinical labor. Psychiatry reports $14.05 of administrative cost against $8.57 of clinical labor. Ophthalmology reports $77.30 against $70.32.
What the hourly figure adds up to in a year
Multiplying the AMA's hours by its administrative cost gives a rough annual figure per physician. This is arithmetic on the AMA's table, not a number the AMA published.
- All specialties: 1,936 hours at $29.30 is about $56,725 a year.
- Primary care: 1,851 hours at $31.32 is about $57,973.
- Cardiology: 2,265 hours at $40.02 is about $90,645.
- Ophthalmology: 1,812 hours at $77.30 is about $140,068.
- Psychiatry: 1,407 hours at $14.05 is about $19,768.
A primary care physician who sees patients 100 hours more per year adds about $3,132 in administrative cost at the AMA rate. The AMA table does not say whether that cost rises with hours or stays fixed.
Administrators can compare their own figures against this table. Divide the year's administrative payroll by the hours clinicians spent with patients, then compare the result to the line for the specialty.
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