What is a Primary Care Nurse Practitioner Worth?

Have you ever wondered how much a nurse practitioner is worth? How much revenue do they generate every year, and how does this compare with their salary? The purpose of this post is to discuss the monetary value of nurse practitioners and what it means for hospitals and clinics who hire them.

I originally wrote and published this article on The Barton Blog. Read the entire article on their website, and check out their open nurse practitioner positions while you’re at it! 

Because most nurse practitioners specialize and practice in primary care, we’ll focus on this specialty. Today, about 75 percent of nurse practitioners practice in primary care, compared with about 33 percent of physicians. The most recent compensation survey conducted by the American Association of Nurse Practitioners (AANP) found that the average total income for a primary care nurse practitioner was around $108,000. In contrast, the average primary care physician earns $160,000, which is 48 percent more.

Let’s Figure It Out

To calculate the amount of revenue a primary care nurse practitioner can generate, I used the formula provided by Dr. Carolyn Buppert in Chapter 10 of her textbook, Nurse Practitioner’s Business Practice and Legal Guide, Fifth Edition.

1. Add up the number of patients seen per day
2. Multiply this number by the average reimbursement amount per patient visit
3. Allow 6 weeks time off (e.g. continuing education, sick time, vacation).
4. Assume 90% collection rate (i.e. 10% of patient bills go unpaid).

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According to Dr. Buppert, primary care nurse practitioners see an average of 24 patients per day and are reimbursed an average of $70 per patient. In this scenario using Dr. Buppert’s formula, the nurse practitioner brings in $1,680 per day. Assuming a 90 percent collection rate and six weeks of time off, the primary care nurse practitioner brings in $347,760 per year.

To calculate the nurse practitioner’s deserved salary, Dr. Buppert deducts the following amounts from nurse practitioner–generated revenue:

1. Practice Expenses or Hospital Overhead (40 Percent)
2. Physician Consultation in States Without Full Practice Authority (15 Percent)
3. Practice Profit (10 Percent)

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The cost of practice expenses or hospital overhead per nurse practitioner varies widely, from 20 percent in large practices to 50 percent in very small practices. These expenses include rent, benefits, continuing education stipend, supplies, malpractice insurance, and depreciation of medical equipment. If the nurse practitioner does not receive health insurance benefits or paid time off, which may be the case for NPs working in some part-time or locum tenens roles, this percentage would be lower.

Physician consultation costs refer to the supervisory agreements that some states require. In her book, Dr. Buppert explains that employers often displace this cost, which is usually around 15 percent of their generated revenue, onto nurse practitioners. Furthermore, practice profit is the amount the employer wishes to keep for themselves, which is usually around 10 percent.

Deducting these percentages from the primary care nurse practitioner who generates $347,760 per year leads to a salary of $159,621. In a state without mandated physician consultation requirements, this same nurse practitioner would ideally earn a 15 percent higher salary (i.e., $177,357).

Finish reading this awesome article on The Barton Blog, and check out their open NP positions! ​